SB3444 100TH GENERAL ASSEMBLY

LRB100 16910 RPS 32051 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB3444

Introduced 2/16/2018, by Sen. Pamela J. Althoff

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Pension Code. On January 1, 2021, merges all Article 3 police pension funds into a single Downstate Police Officers Pension Fund and all Article 4 firefighters' pension funds into a single Downstate Firefighters Pension Fund. Creates Transition Boards, which are responsible for planning, overseeing, and administering the consolidation. Authorizes the Transition Boards to undertake numerous activities necessary for the consolidation, including making arrangements for staff, investments, transfer of assets and liabilities, acquisition of property, establishment of municipal accounts, and the adoption of rules and procedures. Authorizes each Transition Board to enter into contracts and to obligate and expend the assets of each Fund. Creates a new Board of Trustees for each Fund, and provides for administration of each Fund by the Transition Board until the new Board assumes its duties on January 1, 2022. Converts the board of trustees of each consolidated pension fund into a pension benefit determination and payment board. Provides for investment of the Funds' assets by custodians chosen by the Boards of Trustees. Makes conforming and other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that certain changes to the Illinois Pension Code take effect January 1, 2021.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning public employee benefits.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Pension Code is amended by changing Sections 3-101 and 4-101 and by adding Sections 3-101.1, 3-101.2, 4-101.1, 4-101.2, 7-199.5, and 7-199.6 as follows:

(40 ILCS 5/3-101) (from Ch. 108 1/2, par. 3-101)

Sec. 3-101. Creation of Fund fund.

(a) Until January 1, 2021, in In each municipality, as defined in Section 3-103, the city council or the board of trustees, as the case may be, shall establish and administer a police pension fund, as prescribed in this Article, for the benefit of its police officers and of their surviving spouses, children, and certain other dependents. The duty of the corporate authorities of a municipality to establish and administer a police pension fund shall be suspended during any period during which the fund is dissolved under Section 3-144.6 of this Code.

(b) On January 1, 2021, all of the individual police pension funds then existing under this Article are merged and consolidated into a single pension fund, to be known as the Downstate Police Officers Pension Fund, which shall be established and administered as prescribed in this Article.

On January 1, 2021, the board of trustees of each individual police pension fund is converted to a pension benefit determination and payment board, which shall be established and administered as prescribed in this Article. Members of a pension benefit determination and payment board are fiduciaries of the Fund.

(c) Beginning January 1, 2021, each municipality, as defined in Section 3-103, shall participate in the Downstate Police Officers Pension Fund for the benefit of its police officers and of their surviving spouses, children, and certain other dependents.

(d) It is the purpose of this consolidation to continue the role of local pension boards in determining, approving, and paying retirement, survivor, and disability benefits while providing the advantages of (i) centralized custody and investment of pension fund assets, (ii) consistent interpretation and application of this Article by local boards acting in accordance with a single set of rules and procedures adopted by the consolidated pension fund, and (iii) securing the future funding of pension benefits through an independent determination of each municipality's required annual contribution rate.

(Source: P.A. 97-99, eff. 1-1-12.)

(40 ILCS 5/3-101.1 new)

Sec. 3-101.1. Transition Board.

(a) There is hereby created a Downstate Police Officers Pension Fund Transition Board, which may be referred to as the "Transition Board". The Transition Board shall consist of 9 members as follows:

(1) The Director of Insurance, or his or her designee.

(2) Three persons with experience in managing or administering an Illinois public employee pension fund or retirement system, appointed by the Governor.

(3) One person with experience in providing actuarial services to an Illinois public employee pension fund or retirement system, appointed by the Governor.

(4) One person with experience in auditing Illinois public employee pension funds or retirement systems, appointed by the Governor.

(5) One member of the labor organization representing the largest number of police officers participating in Article 3 pension funds, appointed by the President of that organization.

(6) One person who is the mayor or chief elected officer of a municipality that maintains an Article 3 pension fund, appointed by the Governor.

(7) One person familiar with the operation and administration of the Illinois Municipal Retirement Fund, appointed by the Executive Director of that Fund.

All such appointments and designations shall be made by filing a written notice thereof with the Secretary of State no later than 30 days after the effective date of this amendatory Act of the 100th General Assembly.

(b) The Transition Board shall be responsible for planning, overseeing, and administering the consolidation and merger of all existing Article 3 pension funds into a single Downstate Police Officers Pension Fund.

Members of the Transition Board shall act at all times in a manner appropriate for fiduciaries of the Fund and fiduciaries of the pension funds being consolidated.

The Transition Board's powers and duties include, but are not limited to, the following:

(1) Providing for the establishment of offices, infrastructure, and personnel necessary for the operation of the Downstate Police Officers Pension Fund.

(2) Providing for the preservation and consolidation of membership, beneficiary, financial, and other records relating to the Article 3 pension funds to be merged.

(3) Obtaining all necessary Internal Revenue Service and any other necessary approval or review.

(4) Providing for the final auditing of existing Article 3 pension funds, including a final accounting of their respective assets and liabilities.

(5) Providing for the custody and transfer of the assets and liabilities of the existing Article 3 pension funds to the Downstate Police Officers Pension Fund (except for any assets determined by the Transition Board to be properly retained for the short-term payment of benefits and expenses by a pension fund prior to the consolidation date or related to the defined contribution plan under Section 3-109.4), on a schedule to be determined by the Transition Board.

(6) Providing for the long-term investment of the assets of the Downstate Police Officers Pension Fund that are not required for the short-term payment of benefits and expenses.

(7) Providing an appropriate system of accounting for the assets and liabilities attributable to the existing Article 3 pension funds, and establishing separate reserves and accounts for each municipality participating in the Downstate Police Officers Pension Fund in accordance with this Article. In so doing, the Transition Board shall be guided by the methods and experience of the Illinois Municipal Retirement Fund.

(8) Providing an appropriate system of determining, administering, receiving, and enforcing the required municipal contributions to the Fund. In so doing, the Transition Board shall be guided by the methods and experience of the Illinois Municipal Retirement Fund. The municipal contribution rate shall be determined separately for each municipality, on an annual basis, in accordance with the requirements of this Article, based on the municipality's separate reserves and accounts within the Fund. The Transition Board shall endeavor to determine the required municipal contributions to the Fund and to notify and provide reasonable guidance to municipalities in a manner that ensures uninterrupted contributions during the transition period.

(9) Ensuring the uninterrupted payment and administration of benefits.

(10) Adopting rules or procedures necessary or useful for the efficient consolidation of the existing Article 3 pension funds and the efficient operation and administration of the Downstate Police Officers Pension Fund, including rules and procedures relating to the operation of pension benefit determination and payment boards. In adopting rules and procedures for the operation of benefit boards, the Transition Board shall review the existing rules and procedures of representative examples of existing Article 3 pension funds and take into consideration the methods and experience of the Illinois Municipal Retirement Fund. Members of a pension benefit determination and payment board are fiduciaries of the Fund.

(11) Considering the consequences of the consolidation on any Qualified Illinois Domestic Relations Orders filed with the pension funds being consolidated, and providing for appropriate notice and advice to be given to persons who may be affected by those Qualified Illinois Domestic Relations Orders concerning the possible effects of consolidation.

(12) Administering the Downstate Police Officers Pension Fund and exercising and performing all of the powers and duties of its Board of Trustees from the time of the Fund's inception until the new Board of Trustees under subsection (f) of Section 3-128 has assumed its duties.

(13) Making recommendations to the Governor and the General Assembly with respect to legislation necessary or useful for the implementation of this consolidation or for the successful operation of the Downstate Police Officers Pension Fund and the pension benefit determination and payment boards.

(c) The Public Pension Division of the Department of Insurance shall provide all reasonably necessary and available temporary office space and technical and clerical support and monetary or other assistance at the request of the Transition Board.

For the purpose of implementing the consolidation, the Transition Board may direct the Public Pension Division to accelerate, expand, or enhance its examination under Section 1A-104 of all or specific Article 3 pension funds or to conduct a particular study or investigation thereof. The expenses of such examinations and investigations, to the extent not paid by the Division, shall be charged to the applicable pension fund.

(d) The Illinois Municipal Retirement Fund is authorized to provide any reasonable managerial, professional, clerical, or other assistance to the Transition Board that is consistent with its fiduciary and other obligations.

The Transition Board is authorized to enter into reasonable contracts or other agreements not exceeding 3 years in duration with the Illinois Municipal Retirement Fund without public bidding or procurement procedures to provide administrative, investment, professional, technical, or other services or facilities for the Downstate Police Officers Pension Fund.

(e) In preparation for the inception of the Downstate Police Officers Pension Fund on January 1, 2021, and during the period of its administration of that Fund, the Transition Board is authorized to expend or obligate the assets of the Fund for any of the reasonable expenses of the Fund, including the payment of benefits and reasonable administrative expenses. The term "reasonable administrative expenses" includes, but is not limited to, the cost of hiring personnel and obtaining professional services, the cost of leases or purchases of property or services for the Fund, the cost of insurance, and the cost of indemnifying members of the Transition Board and its employees, advisors, and agents.

(f) In preparation for the inception of the Downstate Police Officers Pension Fund on January 1, 2021, the Transition Board is specifically authorized to retain for the Fund, during the period before its inception, an executive director and an actuary with the powers and duties described in Sections 3-140.6 and 3-140.7.

(g) Members of the Transition Board, other than State officials and employees, may be compensated for their service, and all members may be reimbursed for their reasonable expenses, out of any moneys available for that purpose.

(h) Sixty days after the new Board of Trustees under Section 3-128 assumes its duties, the Transition Board is abolished.

(40 ILCS 5/3-101.2 new)

Sec. 3-101.2. Consolidation of pension funds.

(a) On January 1, 2021, all of the individual police pension funds then established under this Article are merged and consolidated into a single pension fund, to be known as the Downstate Police Officers Pension Fund, which shall be established and administered as prescribed in this Article.

In preparation for that consolidation, all pension funds established under this Article, and the municipalities that established them, shall cooperate with the Transition Board.

(b) The Downstate Police Officers Pension Fund shall be the legal successor to each of the pension funds that are consolidated within it, and it may exercise any of the rights and powers and perform any of the duties of those pension funds.

At the time of consolidation, or as otherwise directed by the Transition Board, all assets and liabilities belonging to or arising from the trust of an existing pension fund shall become the assets and liabilities of the Downstate Police Officers Pension Fund.

As and when directed by the Transition Board, the trustees of the pension funds established under Article 3 of this Code shall transfer to the Downstate Police Officers Pension Fund, for management and investment as assets of the Downstate Police Officers Pension Fund, all of their securities and other investments.

(c) At the time of consolidation or as otherwise directed by the Transition Board, assets not belonging to or arising from the trust that are incidentally owned by a pension fund, and any incidental liabilities of a pension fund not relating to or arising from the trust, shall become the assets and liabilities of the pension benefit determination and payment board of the municipality.

Assets not belonging to or arising from the trust that are owned by a municipality and incidentally used by a pension fund, and any associated liabilities, are not affected by the consolidation and shall continue to be managed as assets and liabilities of that municipality.

As necessary or useful to effectuate the consolidation, the board of trustees of a pension fund to be consolidated, the pension benefit determination and payment board of a municipality whose pension fund has been consolidated, and the applicable municipality may each, in its discretion, continue or renegotiate any employment or service contract, lease, or other contract to which it is a party that relates to the operation of the consolidated pension fund, and it may take appropriate action to terminate any such contract as necessary to terminate or avoid unnecessary or duplicative personnel, facilities, or services.

(d) Beginning on January 1, 2021, all benefits payable under this Article shall be payable from the Downstate Police Officers Pension Fund and charged to the appropriate accounts and reserves of the applicable municipalities. Except as otherwise provided for certain benefits based on service under more than one municipality, benefits shall be paid by the applicable pension benefit determination and payment board, acting as payment agent for the Fund.

(e) The consolidation of pension funds under this Article shall not diminish or impair the benefits of any current or former police officer who participated in one of those pension funds or of any such police officer's surviving spouse, children, or other dependents.

The consolidation of pension funds under this Article does not entitle any person to a recalculation or combination of any benefit or benefits previously granted or to a refund of any contribution previously paid.

The consolidation of pension funds under this Article is not intended to increase the benefits provided under this Article, except insofar as the consolidation of pension funds into a single Fund will allow police officers in active service on or after the consolidation date to have their benefit calculations (and those of their qualifying survivors) include consideration of all of the police officer's service, salary, and credits in the Fund as though arising under that single Fund, rather than as arising under more than one participating municipality or more than one Article 3 pension fund. Such benefits based on service under more than one participating municipality shall be determined, granted, and paid directly by the Board of the Fund in the manner prescribed in the applicable portions of Sections 3-110.05, 3-124.1, and 3-130.5.

(40 ILCS 5/4-101) (from Ch. 108 1/2, par. 4-101)

Sec. 4-101. Creation of Fund fund.

(a) Until January 1, 2021, in In each municipality as defined in Section 4-103, the city council or the board of trustees, as the case may be, shall establish and administer a firefighters' pension fund as prescribed in this Article, for the benefit of its firefighters and of their surviving spouses, children and certain other dependents. The duty of the corporate authorities of a municipality to establish and administer a firefighters' pension fund shall be suspended during any period during which the fund is dissolved under subsection (c) of Section 4-106.1 of this Code.

(b) On January 1, 2021, all of the individual firefighters' pension funds then existing under this Article are merged and consolidated into a single pension fund, to be known as the Downstate Firefighters Pension Fund, which shall be established and administered as prescribed in this Article.

On January 1, 2021, the board of trustees of each individual firefighters' pension fund is converted to a pension benefit determination and payment board, which shall be established and administered as prescribed in this Article. Members of a pension benefit determination and payment board are fiduciaries of the Fund.

(c) Beginning January 1, 2021, each municipality, as defined in Section 4-103, shall participate in the Downstate Firefighters Pension Fund for the benefit of its firefighters and of their surviving spouses, children, and certain other dependents.

(d) It is the purpose of this consolidation to continue the role of local pension boards in determining, approving, and paying retirement, survivor, and disability benefits while providing the advantages of (i) centralized custody and investment of pension fund assets, (ii) consistent interpretation and application of this Article by local boards acting in accordance with a single set of rules and procedures adopted by the consolidated pension fund, and (iii) securing the future funding of pension benefits through an independent determination of each municipality's required annual contribution rate.

(Source: P.A. 97-99, eff. 1-1-12.)

(40 ILCS 5/4-101.1 new)

Sec. 4-101.1. Transition Board.

(a) There is hereby created a Downstate Firefighters Pension Fund Transition Board, which may be referred to as the "Transition Board". The Transition Board shall consist of 9 members as follows:

(1) The Director of Insurance, or his or her designee.

(2) Three persons with experience in managing or administering an Illinois public employee pension fund or retirement system, appointed by the Governor.

(3) One person with experience in providing actuarial services to an Illinois public employee pension fund or retirement system, appointed by the Governor.

(4) One person with experience in auditing Illinois public employee pension funds or retirement systems, appointed by the Governor.

(5) One member of the labor organization representing the largest number of firefighters participating in Article 4 pension funds, appointed by the President of that organization.

(6) One person who is the mayor or chief elected officer of a municipality that maintains an Article 4 pension fund, appointed by the Governor.

(7) One person familiar with the operation and administration of the Illinois Municipal Retirement Fund, appointed by the Executive Director of that Fund.

All such appointments and designations shall be made by filing a written notice thereof with the Secretary of State no later than 30 days after the effective date of this amendatory Act of the 100th General Assembly.

(b) The Transition Board shall be responsible for planning, overseeing, and administering the consolidation and merger of all existing Article 4 pension funds into a single Downstate Firefighters Pension Fund.

Members of the Transition Board shall act at all times in a manner appropriate for fiduciaries of the Fund and fiduciaries of the pension funds being consolidated.

The Transition Board's powers and duties include, but are not limited to, the following:

(1) Providing for the establishment of offices, infrastructure, and personnel necessary for the operation of the Downstate Firefighters Pension Fund.

(2) Providing for the preservation and consolidation of membership, beneficiary, financial, and other records relating to the Article 4 pension funds to be merged.

(3) Obtaining all necessary Internal Revenue Service and any other necessary approval or review.

(4) Providing for the final auditing of existing Article 4 pension funds, including a final accounting of their respective assets and liabilities.

(5) Providing for the custody and transfer of the assets and liabilities of the existing Article 4 pension funds to the Downstate Firefighters Pension Fund (except for any assets determined by the Transition Board to be properly retained for the short-term payment of benefits and expenses by a pension fund prior to the consolidation date), on a schedule to be determined by the Transition Board.

(6) Providing for the long-term investment of the assets of the Downstate Firefighters Pension Fund that are not required for the short-term payment of benefits and expenses.

(7) Providing an appropriate system of accounting for the assets and liabilities attributable to the existing Article 4 pension funds, and establishing separate reserves and accounts for each municipality participating in the Downstate Firefighters Pension Fund in accordance with this Article. In so doing, the Transition Board shall be guided by the methods and experience of the Illinois Municipal Retirement Fund.

(8) Providing an appropriate system of determining, administering, receiving, and enforcing the required municipal contributions to the Fund. In so doing, the Transition Board shall be guided by the methods and experience of the Illinois Municipal Retirement Fund. The municipal contribution rate shall be determined separately for each municipality, on an annual basis, in accordance with the requirements of this Article, based on the municipality's separate reserves and accounts within the Fund. The Transition Board shall endeavor to determine the required municipal contributions to the Fund and to notify and provide reasonable guidance to municipalities in a manner that ensures uninterrupted contributions during the transition period.

(9) Ensuring the uninterrupted payment and administration of benefits.

(10) Adopting rules or procedures necessary or useful for the efficient consolidation of the existing Article 4 pension funds and the efficient operation and administration of the Downstate Firefighters Pension Fund, including rules and procedures relating to the operation of pension benefit determination and payment boards. In adopting rules and procedures for the operation of benefit boards, the Transition Board shall review the existing rules and procedures of representative examples of existing Article 4 pension funds and take into consideration the methods and experience of the Illinois Municipal Retirement Fund. Members of a pension benefit determination and payment board are fiduciaries of the Fund.

(11) Considering the consequences of the consolidation on any Qualified Illinois Domestic Relations Orders filed with the pension funds being consolidated, and providing for appropriate notice and advice to be given to persons who may be affected by those Qualified Illinois Domestic Relations Orders concerning the possible effects of consolidation.

(12) Administering the Downstate Firefighters Pension Fund and exercising and performing all of the powers and duties of its Board of Trustees from the time of the Fund's inception until the new Board of Trustees under subsection (d) of Section 4-121 has assumed its duties.

(13) Making recommendations to the Governor and the General Assembly with respect to legislation necessary or useful for the implementation of this consolidation or for the successful operation of the Downstate Firefighters Pension Fund and the pension benefit determination and payment boards.

(c) The Public Pension Division of the Department of Insurance shall provide all reasonably necessary and available temporary office space and technical and clerical support and monetary or other assistance at the request of the Transition Board.

For the purpose of implementing the consolidation, the Transition Board may direct the Public Pension Division to accelerate, expand, or enhance its examination under Section 1A-104 of all or specific Article 4 pension funds or to conduct a particular study or investigation thereof. The expenses of such examinations and investigations, to the extent not paid by the Division, shall be charged to the applicable pension fund.

(d) The Illinois Municipal Retirement Fund is authorized to provide any reasonable managerial, professional, clerical, or other assistance to the Transition Board that is consistent with its fiduciary and other obligations.

The Transition Board is authorized to enter into reasonable contracts or other agreements not exceeding 3 years in duration with the Illinois Municipal Retirement Fund without public bidding or procurement procedures to provide administrative, investment, professional, technical, or other services or facilities for the Downstate Firefighters Pension Fund.

(e) In preparation for the inception of the Downstate Firefighters Pension Fund on January 1, 2021, and during the period of its administration of that Fund, the Transition Board is authorized to expend or obligate the assets of the Fund for any of the reasonable expenses of the Fund, including the payment of benefits and reasonable administrative expenses. The term "reasonable administrative expenses" includes, but is not limited to, the cost of hiring personnel and obtaining professional services, the cost of leases or purchases of property or services for the Fund, the cost of insurance, and the cost of indemnifying members of the Transition Board and its employees, advisors, and agents.

(f) In preparation for the inception of the Downstate Firefighters Pension Fund on January 1, 2021, the Transition Board is specifically authorized to retain for the Fund, during the period before its inception, an executive director and an actuary with the powers and duties described in Sections 4-130.4 and 4-130.5.

(g) Members of the Transition Board, other than State officials and employees, may be compensated for their service, and all members may be reimbursed for their reasonable expenses, out of any moneys available for that purpose.

(h) Sixty days after the new Board of Trustees under Section 4-121 assumes its duties, the Transition Board is abolished.

(40 ILCS 5/4-101.2 new)

Sec. 4-101.2. Consolidation of pension funds.

(a) On January 1, 2021, all of the individual firefighters' pension funds then established under this Article are merged and consolidated into a single pension fund, to be known as the Downstate Firefighters Pension Fund, which shall be established and administered as prescribed in this Article.

In preparation for that consolidation, all pension funds established under this Article, and the municipalities that established them, shall cooperate with the Transition Board.

(b) The Downstate Firefighters Pension Fund shall be the legal successor to each of the pension funds that are consolidated within it, and it may exercise any of the rights and powers and perform any of the duties of those pension funds.

At the time of consolidation, or as otherwise directed by the Transition Board, all assets and liabilities belonging to or arising from the trust of an existing pension fund shall become the assets and liabilities of the Downstate Firefighters Pension Fund.

As and when directed by the Transition Board, the trustees of the pension funds established under Article 4 of this Code shall transfer to the Downstate Firefighters Pension Fund, for management and investment as assets of the Downstate Firefighters Pension Fund, all of their securities and other investments.

(c) At the time of consolidation or as otherwise directed by the Transition Board, assets not belonging to or arising from the trust that are incidentally owned by a pension fund, and any incidental liabilities of a pension fund not relating to or arising from the trust, shall become the assets and liabilities of the pension benefit determination and payment board of the municipality.

Assets not belonging to or arising from the trust that are owned by a municipality and incidentally used by a pension fund, and any associated liabilities, are not affected by the consolidation and shall continue to be managed as assets and liabilities of that municipality.

As necessary or useful to effectuate the consolidation, the board of trustees of a pension fund to be consolidated, the pension benefit determination and payment board of a municipality whose pension fund has been consolidated, and the applicable municipality may each, in its discretion, continue or renegotiate any employment or service contract, lease, or other contract to which it is a party that relates to the operation of the consolidated pension fund, and it may take appropriate action to terminate any such contract as necessary to terminate or avoid unnecessary or duplicative personnel, facilities, or services.

(d) Beginning on January 1, 2021, all benefits payable under this Article shall be payable from the Downstate Firefighters Pension Fund and charged to the appropriate accounts and reserves of the applicable municipalities. Except as otherwise provided for certain benefits based on service under more than one municipality, benefits shall be paid by the applicable pension benefit determination and payment board, acting as payment agent for the Fund.

(e) The consolidation of pension funds under this Article shall not diminish or impair the benefits of any current or former firefighter who participated in one of those pension funds or of any such firefighter's surviving spouse, children, or other dependents.

The consolidation of pension funds under this Article does not entitle any person to a recalculation or combination of any benefit or benefits previously granted or to a refund of any contribution previously paid.

The consolidation of pension funds under this Article is not intended to increase the benefits provided under this Article, except insofar as the consolidation of pension funds into a single Fund will allow firefighters in active service on or after the consolidation date to have their benefit calculations (and those of their qualifying survivors) include consideration of all of the firefighter's service, salary, and credits in the Fund as though arising under that single Fund, rather than as arising under more than one participating municipality or more than one Article 4 pension fund. Such benefits based on service under more than one participating municipality shall be determined, granted, and paid directly by the Board of the Fund in the manner prescribed in the applicable portions of Sections 4-109.3, 4-109.4, 4-117, and 4-121.5.

(40 ILCS 5/7-199.5 new)

Sec. 7-199.5. To assist in the creation and administration of the Downstate Police Officers Pension Fund. To assist in the creation and administration of the Downstate Police Officers Pension Fund under Article 3 of this Code, including assisting the Downstate Police Officers Pension Fund Transition Board, created under Section 3-101.1 of this Code; and pursuant to any contract or other agreement it may enter into with the Transition Board or the Board of Trustees of the Downstate Police Officers Pension Fund, to provide for the administrative staff of one Fund to provide assistance to or consolidate particular services or operations with that of the other Fund, to the extent consistent with their respective fiduciary and other responsibilities.

(40 ILCS 5/7-199.6 new)

Sec. 7-199.6. To assist in the creation and administration of the Downstate Firefighters Pension Fund. To assist in the creation and administration of the Downstate Firefighters Pension Fund under Article 4 of this Code, including assisting the Downstate Firefighters Pension Fund Transition Board, created under Section 4-101.1 of this Code; and pursuant to any contract or other agreement it may enter into with the Transition Board or the Board of Trustees of the Downstate Firefighters Pension Fund, to provide for the administrative staff of one Fund to provide assistance to or consolidate particular services or operations with that of the other Fund, to the extent consistent with their respective fiduciary and other responsibilities.

Section 10. The Illinois Pension Code is amended by changing 1-109.1, 1-109.3, 1-110, 1-113, 1-113.14, 1-113.16, 1-113.20, 1-150, 1A-103, 1A-104, 1A-108, 1A-108.5, 1A-110, 1A-112, 3-102, 3-103, 3-105, 3-108.2, 3-108.3, 3-109.4, 3-110, 3-110.2, 3-110.4, 3-110.6, 3-110.7, 3-111, 3-111.1, 3-112, 3-114.1, 3-115, 3-116.1, 3-124, 3-124.1, 3-125, 3-125.1, 3-127, 3-128, 3-130, 3-131, 3-132, 3-133, 3-134, 3-135, 3-140, 3-141, 3-141.1, 3-143, 3-144.2, 3-144.5, 3-144.6, 3-145, 3-148, 3-150, 4-103, 4-105, 4-105c, 4-105d, 4-106.1, 4-108, 4-108.1, 4-108.2, 4-108.4, 4-108.5, 4-109, 4-109.3, 4-110, 4-110.1, 4-111, 4-112, 4-113, 4-114, 4-116, 4-117, 4-118, 4-118.1, 4-120, 4-121, 4-122, 4-123, 4-124, 4-125, 4-128, 4-130, 4-131, 4-132, 4-133, 4-134, 4-135, 4-138.5, 4-138.10, 4-139, 4-141, 4-142, 7-109, and 7-139.10 and by adding Sections 3-102.1, 3-104.5, 3-108.4, 3-110.05, 3-125.3, 3-128.1, 3-128.2, 3-130.5, 3-130.8, 3-138.1, 3-138.2, 3-138.3, 3-138.4, 3-138.5, 3-138.6, 3-138.7, 3-138.8, 3-138.9, 3-138.10, 3-140.2, 3-140.3, 3-140.4, 3-140.5, 3-140.6, 3-140.7, 3-140.8, 3-140.9, 3-140.10, 3-144.7, 3-144.8, 3-146.05, 3-146.1, 3-146.2, 3-146.3, 3-146.4, 3-146.5, 3-146.6, 4-102.1, 4-104.5, 4-104.9, 4-106.2, 4-106.5, 4-109.4, 4-118.3, 4-121.1, 4-121.2, 4-121.3, 4-121.5, 4-121.6, 4-127.1, 4-127.2, 4-127.3, 4-127.4, 4-127.5, 4-127.6, 4-127.7, 4-127.8, 4-127.9, 4-127.10, 4-130.1, 4-130.2, 4-130.3, 4-130.4, 4-130.5, 4-136.05, 4-136.1, 4-136.2, 4-136.3, 4-136.4, 4-136.5, and 4-136.6 as follows:

(40 ILCS 5/1-109.1) (from Ch. 108 1/2, par. 1-109.1)

Sec. 1-109.1. Allocation and delegation of fiduciary duties.

(1) Subject to the provisions of Section 22A-113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may:

(a) Appoint one or more investment managers as fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and

(b) Allocate duties among themselves and designate others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.

(2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code may not transfer its investment authority, nor transfer the assets of the fund to any other person or entity for the purpose of consolidating or merging its assets and management with any other pension fund or public investment authority, unless the board resolution authorizing such transfer is submitted for approval to the contributors and pensioners of the fund at elections held not less than 30 days after the adoption of such resolution by the board, and such resolution is approved by a majority of the votes cast on the question in both the contributors election and the pensioners election. The election procedures and qualifications governing the election of trustees shall govern the submission of resolutions for approval under this paragraph, insofar as they may be made applicable.

(3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted.

(4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $10,000,000,000 and is a "minority-owned business", "women-owned business" or "business owned by a person with a disability" as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.

It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use emerging investment managers in managing their system's assets, encompassing all asset classes, and increase the racial, ethnic, and gender diversity of its fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards.

A On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for utilization of emerging investment managers. This policy shall include quantifiable goals for the management of assets in specific asset classes by emerging investment managers. The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) emerging investment managers that are minority-owned businesses; (ii) emerging investment managers that are women-owned businesses; and (iii) emerging investment managers that are businesses owned by a person with a disability. The goals established shall be based on the percentage of total dollar amount of investment service contracts let to minority-owned businesses, women-owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection.

If in any case an emerging investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that emerging investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple emerging investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board.

The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section.

(5) Each retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall establish a policy that sets forth goals for increasing the racial, ethnic, and gender diversity of its fiduciaries, including its consultants and senior staff. Each system, fund, and investment board shall annually review the goals established under this subsection.

(6) A On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for utilization of businesses owned by minorities, women, and persons with disabilities for all contracts and services. The goals established shall be based on the percentage of total dollar amount of all contracts let to minority-owned businesses, women-owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection.

(7) A On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority broker-dealers. For the purposes of this Code, "minority broker-dealer" means a qualified broker-dealer who meets the definition of "minority-owned business", "women-owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this Section.

(8) Each retirement system, pension fund, and investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall submit a report to the Governor and the General Assembly by January 1 of each year that includes the following: (i) the policy adopted under subsection (4) of this Section, including the names and addresses of the emerging investment managers used, percentage of the assets under the investment control of emerging investment managers for the 3 separate goals, and the actions it has undertaken to increase the use of emerging investment managers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises; (ii) the policy adopted under subsection (5) of this Section; (iii) the policy adopted under subsection (6) of this Section; (iv) the policy adopted under subsection (7) of this Section, including specific actions undertaken to increase the use of minority broker-dealers; and (v) the policy adopted under subsection (9) of this Section.

(9) A On or before February 1, 2015, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority investment managers. For the purposes of this Code, "minority investment manager" means a qualified investment manager that manages an investment portfolio and meets the definition of "minority-owned business", "women-owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.

It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use minority investment managers in managing their systems' assets, encompassing all asset classes, and to increase the racial, ethnic, and gender diversity of their fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards.

The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) minority investment managers that are minority-owned businesses; (ii) minority investment managers that are women-owned businesses; and (iii) minority investment managers that are businesses owned by a person with a disability. The retirement system, pension fund, or investment board shall annually review the goals established under this Section.

If in any case a minority investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that minority investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple minority investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board.

The use of a minority investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section.

(10) Beginning January 1, 2016, it shall be the aspirational goal for a retirement system, pension fund, or investment board subject to this Code to use emerging investment managers for not less than 20% of the total funds under management. Furthermore, it shall be the aspirational goal that not less than 20% of investment advisors be minorities, women, and persons with disabilities as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. It shall be the aspirational goal to utilize businesses owned by minorities, women, and persons with disabilities for not less than 20% of contracts awarded for "information technology services", "accounting services", "insurance brokers", "architectural and engineering services", and "legal services" as those terms are defined in the Act.

(11) The Downstate Firefighters Pension Fund shall become subject to the requirements of this Section and the policies adopted under this Section by its Board of Trustees upon the transfer to that Fund of any assets of the pension funds being consolidated into that Fund for investment purposes.

(12) The Downstate Police Officers Pension Fund shall become subject to the requirements of this Section and the policies adopted under this Section by its Board of Trustees upon the transfer to that Fund of any assets of the pension funds being consolidated into that Fund for investment purposes.

(Source: P.A. 99-462, eff. 8-25-15; 100-391, eff. 8-25-17.)

(40 ILCS 5/1-109.3)

Sec. 1-109.3. Training requirement for pension trustees.

(a) All elected and appointed trustees under Articles Article 3 and 4 of this Code and all members of a pension benefit determination and payment board (benefit board) under Articles 3 and 4 of this Code must participate in a mandatory trustee certification training seminar that consists of at least 32 hours of initial trustee certification at a training facility that is accredited and affiliated with a State of Illinois certified college or university. This training must include without limitation all of the following:

(1) Duties and liabilities of a fiduciary under Article 1 of the Illinois Pension Code.

(2) Adjudication of pension claims.

(3) Basic accounting and actuarial training.

(4) Trustee and benefit board member ethics.

(5) The Illinois Open Meetings Act.

(6) The Illinois Freedom of Information Act.

The training required under this subsection (a) must be completed within the first year that the a trustee or benefit board member is elected or appointed under an Article 3 or 4 pension fund. The elected and appointed trustees of an Article 3 or 4 pension fund and the members of a benefit board created under Article 3 or 4 of this Code who are police officers (as defined in Section 3-106 of this Code) or firefighters (as defined in Section 4-106 of this Code) or are employed by the municipality shall be permitted time away from their duties to attend such training without reduction of accrued leave or benefit time.

Active or appointed trustees serving on August 13, 2009 (the effective date of Public Act 96-429) this amendatory Act of the 96th General Assembly shall not be required to attend the trustee training required under this subsection (a), but this exemption does not include any training required for members of a benefit board created under Article 3 or 4 of this Code.

(b) In addition to the initial trustee and benefit board member certification training required under subsection (a), all elected and appointed trustees under Article 3 or and 4 of this Code, including trustees serving on August 13, 2009 (the effective date of Public Act 96-429) this amendatory Act of the 96th General Assembly, and all members of a benefit board under Article 3 or 4 of this Code shall also participate in a minimum of 16 hours of continuing trustee education each year after the first year that the trustee or benefit board member is elected or appointed.

(c) The training required under this Section shall be paid for by the pension fund.

(d) Any trustee or benefit board member who does not timely complete the training required under this Section is not eligible to serve on the board of trustees of an Article 3 or 4 pension fund or a pension benefit determination and payment board created under Article 3 or 4 of this Code, unless the trustee or benefit board member completes the missed training within 6 months after the date the member failed to complete the required training. In the event of a trustee or benefit board member's failure to complete the required training, a successor shall be appointed or elected, as applicable, for the unexpired term. A successor who is elected under such circumstances must be elected at a special election called by the board of trustees or benefit board and conducted in the same manner as a regular election under Article 3 or 4, as applicable.

(Source: P.A. 96-429, eff. 8-13-09.)

(40 ILCS 5/1-110) (from Ch. 108 1/2, par. 1-110)

Sec. 1-110. Prohibited Transactions.

(a) A fiduciary with respect to a retirement system, pension fund, or investment board shall not cause the retirement system or pension fund to engage in a transaction if he or she knows or should know that such transaction constitutes a direct or indirect:

(1) Sale or exchange, or leasing of any property from the retirement system or pension fund to a party in interest for less than adequate consideration, or from a party in interest to a retirement system or pension fund for more than adequate consideration.

(2) Lending of money or other extension of credit from the retirement system or pension fund to a party in interest without the receipt of adequate security and a reasonable rate of interest, or from a party in interest to a retirement system or pension fund with the provision of excessive security or an unreasonably high rate of interest.

(3) Furnishing of goods, services or facilities from the retirement system or pension fund to a party in interest for less than adequate consideration, or from a party in interest to a retirement system or pension fund for more than adequate consideration.

(4) Transfer to, or use by or for the benefit of, a party in interest of any assets of a retirement system or pension fund for less than adequate consideration.

(b) A fiduciary with respect to a retirement system or pension fund established under this Code shall not:

(1) Deal with the assets of the retirement system or pension fund in his own interest or for his own account;

(2) In his individual or any other capacity act in any transaction involving the retirement system or pension fund on behalf of a party whose interests are adverse to the interests of the retirement system or pension fund or the interests of its participants or beneficiaries; or

(3) Receive any consideration for his own personal account from any party dealing with the retirement system or pension fund in connection with a transaction involving the assets of the retirement system or pension fund.

(c) Nothing in this Section shall be construed to prohibit any trustee from:

(1) Receiving any benefit to which he may be entitled as a participant or beneficiary in the retirement system or pension fund.

(2) Receiving any reimbursement of expenses properly and actually incurred in the performance of his duties with the retirement system or pension fund.

(3) Serving as a trustee in addition to being an officer, employee, agent or other representative of a party in interest.

(d) (Blank). A fiduciary of a pension fund established under Article 3 or 4 shall not knowingly cause or advise the pension fund to engage in an investment transaction when the fiduciary (i) has any direct interest in the income, gains, or profits of the investment adviser through which the investment transaction is made or (ii) has a business relationship with that investment adviser that would result in a pecuniary benefit to the fiduciary as a result of the investment transaction.

Violation of this subsection (d) is a Class 4 felony.

(e) A board member, employee, or consultant with respect to a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2, shall not knowingly cause or advise the retirement system, pension fund, or investment board to engage in an investment transaction with an investment adviser when the board member, employee, consultant, or their spouse (i) has any direct interest in the income, gains, or profits of the investment adviser through which the investment transaction is made or (ii) has a relationship with that investment adviser that would result in a pecuniary benefit to the board member, employee, or consultant or spouse of such board member, employee, or consultant as a result of the investment transaction. For purposes of this subsection (e), a consultant includes an employee or agent of a consulting firm who has greater than 7.5% ownership of the consulting firm.

Violation of this subsection (e) is a Class 4 felony.

(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)

(40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113)

Sec. 1-113. Investment authority of certain pension funds, not including those established under Article 3 or 4. The investment authority of a board of trustees of a retirement system or pension fund established under this Code shall, if so provided in the Article establishing such retirement system or pension fund, embrace the following investments:

(1) Bonds, notes and other direct obligations of the United States Government; bonds, notes and other obligations of any United States Government agency or instrumentality, whether or not guaranteed; and obligations the principal and interest of which are guaranteed unconditionally by the United States Government or by an agency or instrumentality thereof.

(2) Obligations of the Inter-American Development Bank, the International Bank for Reconstruction and Development, the African Development Bank, the International Finance Corporation, and the Asian Development Bank.

(3) Obligations of any state, or of any political subdivision in Illinois, or of any county or city in any other state having a population as shown by the last federal census of not less than 30,000 inhabitants provided that such political subdivision is not permitted by law to become indebted in excess of 10% of the assessed valuation of property therein and has not defaulted for a period longer than 30 days in the payment of interest and principal on any of its general obligations or indebtedness during a period of 10 calendar years immediately preceding such investment.

(4) Nonconvertible bonds, debentures, notes and other corporate obligations of any corporation created or existing under the laws of the United States or any state, district or territory thereof, provided there has been no default on the obligations of the corporation or its predecessor(s) during the 5 calendar years immediately preceding the purchase. Up to 5% of the assets of a pension fund established under Article 9 of this Code may be invested in nonconvertible bonds, debentures, notes, and other corporate obligations of corporations created or existing under the laws of a foreign country, provided there has been no default on the obligations of the corporation or its predecessors during the 5 calendar years immediately preceding the date of purchase.

(5) Obligations guaranteed by the Government of Canada, or by any Province of Canada, or by any Canadian city with a population of not less than 150,000 inhabitants, provided (a) they are payable in United States currency and are exempt from any Canadian withholding tax; (b) the investment in any one issue of bonds shall not exceed 10% of the amount outstanding; and (c) the total investments at book value in Canadian securities shall be limited to 5% of the total investment account of the board at book value.

(5.1) Direct obligations of the State of Israel for the payment of money, or obligations for the payment of money which are guaranteed as to the payment of principal and interest by the State of Israel, or common or preferred stock or notes issued by a bank owned or controlled in whole or in part by the State of Israel, on the following conditions:

(a) The total investments in such obligations shall not exceed 5% of the book value of the aggregate investments owned by the board;

(b) The State of Israel shall not be in default in the payment of principal or interest on any of its direct general obligations on the date of such investment;

(c) The bonds, stock or notes, and interest thereon shall be payable in currency of the United States;

(d) The bonds shall (1) contain an option for the redemption thereof after 90 days from date of purchase or (2) either become due 5 years from the date of their purchase or be subject to redemption 120 days after the date of notice for redemption;

(e) The investment in these obligations has been approved in writing by investment counsel employed by the board, which counsel shall be a national or state bank or trust company authorized to do a trust business in the State of Illinois, or an investment advisor qualified under the federal Investment Advisers Act of 1940 and registered under the Illinois Securities Law of 1953;

(f) The fund or system making the investment shall have at least $5,000,000 of net present assets.

(6) Notes secured by mortgages under Sections 203, 207, 220 and 221 of the National Housing Act which are insured by the Federal Housing Commissioner, or his successor assigns, or debentures issued by such Commissioner, which are guaranteed as to principal and interest by the Federal Housing Administration, or agency of the United States Government, provided the aggregate investment shall not exceed 20% of the total investment account of the board at book value, and provided further that the investment in such notes under Sections 220 and 221 shall in no event exceed one-half of the maximum investment in notes under this paragraph.

(7) Loans to veterans guaranteed in whole or part by the United States Government pursuant to Title III of the Act of Congress known as the Servicemen's Readjustment Act of 1944, 58 Stat. 284, 38 U.S.C. 693, as amended or supplemented from time to time, provided such guaranteed loans are liens upon real estate.

(8) Common and preferred stocks and convertible debt securities authorized for investment of trust funds under the laws of the State of Illinois, provided:

(a) the common stocks, except as provided in subparagraph (g), are listed on a national securities exchange or board of trade, as defined in the federal Securities Exchange Act of 1934, or quoted in the National Association of Securities Dealers Automated Quotation System (NASDAQ);

(b) the securities are of a corporation created or existing under the laws of the United States or any state, district or territory thereof, except that up to 5% of the assets of a pension fund established under Article 9 of this Code may be invested in securities issued by corporations created or existing under the laws of a foreign country, if those securities are otherwise in conformance with this paragraph (8);

(c) the corporation is not in arrears on payment of dividends on its preferred stock;

(d) the total book value of all stocks and convertible debt owned by any pension fund or retirement system shall not exceed 40% of the aggregate book value of all investments of such pension fund or retirement system, except for a pension fund or retirement system governed by Article 9 or 17, where the total of all stocks and convertible debt shall not exceed 50% of the aggregate book value of all fund investments, and except for a pension fund or retirement system governed by Article 13, where the total market value of all stocks and convertible debt shall not exceed 65% of the aggregate market value of all fund investments;

(e) the book value of stock and convertible debt investments in any one corporation shall not exceed 5% of the total investment account at book value in which such securities are held, determined as of the date of the investment, and the investments in the stock of any one corporation shall not exceed 5% of the total outstanding stock of such corporation, and the investments in the convertible debt of any one corporation shall not exceed 5% of the total amount of such debt that may be outstanding;

(f) the straight preferred stocks or convertible preferred stocks and convertible debt securities are issued or guaranteed by a corporation whose common stock qualifies for investment by the board; and

(g) that any common stocks not listed or quoted as provided in subdivision (8)(a) be limited to the following types of institutions: (a) any bank which is a member of the Federal Deposit Insurance Corporation having capital funds represented by capital stock, surplus and undivided profits of at least $20,000,000; (b) any life insurance company having capital funds represented by capital stock, special surplus funds and unassigned surplus totalling at least $50,000,000; and (c) any fire or casualty insurance company, or a combination thereof, having capital funds represented by capital stock, net surplus and voluntary reserves of at least $50,000,000.

(9) Withdrawable accounts of State chartered and federal chartered savings and loan associations insured by the Federal Savings and Loan Insurance Corporation; deposits or certificates of deposit in State and national banks insured by the Federal Deposit Insurance Corporation; and share accounts or share certificate accounts in a State or federal credit union, the accounts of which are insured as required by the Illinois Credit Union Act or the Federal Credit Union Act, as applicable.

No bank or savings and loan association shall receive investment funds as permitted by this subsection (9), unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act.

(10) Trading, purchase or sale of listed options on underlying securities owned by the board.

(11) Contracts and agreements supplemental thereto providing for investments in the general account of a life insurance company authorized to do business in Illinois.

(12) Conventional mortgage pass-through securities which are evidenced by interests in Illinois owner-occupied residential mortgages, having not less than an "A" rating from at least one national securities rating service. Such mortgages may have loan-to-value ratios up to 95%, provided that any amount over 80% is insured by private mortgage insurance. The pool of such mortgages shall be insured by mortgage guaranty or equivalent insurance, in accordance with industry standards.

(13) Pooled or commingled funds managed by a national or State bank which is authorized to do a trust business in the State of Illinois, shares of registered investment companies as defined in the federal Investment Company Act of 1940 which are registered under that Act, and separate accounts of a life insurance company authorized to do business in Illinois, where such pooled or commingled funds, shares, or separate accounts are comprised of common or preferred stocks, bonds, or money market instruments.

(14) Pooled or commingled funds managed by a national or state bank which is authorized to do a trust business in the State of Illinois, separate accounts managed by a life insurance company authorized to do business in Illinois, and commingled group trusts managed by an investment adviser registered under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) and under the Illinois Securities Law of 1953, where such pooled or commingled funds, separate accounts or commingled group trusts are comprised of real estate or loans upon real estate secured by first or second mortgages. The total investment in such pooled or commingled funds, commingled group trusts and separate accounts shall not exceed 10% of the aggregate book value of all investments owned by the fund.

(15) Investment companies which (a) are registered as such under the Investment Company Act of 1940, (b) are diversified, open-end management investment companies and (c) invest only in money market instruments.

(16) Up to 10% of the assets of the fund may be invested in investments not included in paragraphs (1) through (15) of this Section, provided that such investments comply with the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, and 1-111 of this Code.

The board shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction.

Any limitations herein set forth shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time.

All investments shall be clearly held and accounted for to indicate ownership by such board. Such board may direct the registration of securities in its own name or in the name of a nominee created for the express purpose of registration of securities by a national or state bank or trust company authorized to conduct a trust business in the State of Illinois.

Investments shall be carried at cost or at a value determined in accordance with generally accepted accounting principles and accounting procedures approved by such board.

(Source: P.A. 100-201, eff. 8-18-17.)

(40 ILCS 5/1-113.14)

Sec. 1-113.14. Investment services for retirement systems, pension funds, and investment boards, except those funds established under Articles 3 and 4.

(a) For the purposes of this Section, "investment services" means services provided by an investment adviser or a consultant other than qualified fund-of-fund management services as defined in Section 1-113.15.

(b) The selection and appointment of an investment adviser or consultant for investment services by the board of a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2, shall be made and awarded in accordance with this Section. All contracts for investment services shall be awarded by the board using a competitive process that is substantially similar to the process required for the procurement of professional and artistic services under Article 35 of the Illinois Procurement Code. Each board of trustees shall adopt a policy in accordance with this subsection (b) within 60 days after the effective date of this amendatory Act of the 96th General Assembly. The policy shall be posted on its web site and filed with the Illinois Procurement Policy Board. Exceptions to this Section are allowed for (i) sole source procurements, (ii) emergency procurements, (iii) at the discretion of the pension fund, retirement system, or board of investment, contracts that are nonrenewable and one year or less in duration, so long as the contract has a value of less than $20,000, and (iv) in the discretion of the pension fund, retirement system, or investment board, contracts for follow-on funds with the same fund sponsor through closed-end funds. All exceptions granted under this Section must be published on the system's, fund's, or board's web site, shall name the person authorizing the procurement, and shall include a brief explanation of the reason for the exception.

A person, other than a trustee or an employee of a retirement system, pension fund, or investment board, may not act as a consultant or investment adviser under this Section unless that person is registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.) or a bank, as defined in the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.).

(c) Investment services provided by an investment adviser or a consultant appointed under this Section shall be rendered pursuant to a written contract between the investment adviser or consultant and the board.

The contract shall include all of the following:

(1) Acknowledgement in writing by the investment adviser or consultant that he or she is a fiduciary with respect to the pension fund or retirement system.

(2) The description of the board's investment policy and notice that the policy is subject to change.

(3) (i) Full disclosure of direct and indirect fees, commissions, penalties, and other compensation, including reimbursement for expenses, that may be paid by or on behalf of the consultant in connection with the provision of services to the pension fund or retirement system and (ii) a requirement that the consultant update the disclosure promptly after a modification of those payments or an additional payment.

(4) A requirement that the investment adviser or consultant, in conjunction with the board's staff, submit periodic written reports, on at least a quarterly basis, for the board's review at its regularly scheduled meetings. All returns on investment shall be reported as net returns after payment of all fees, commissions, and any other compensation.

(5) Disclosure of the names and addresses of (i) the consultant or investment adviser; (ii) any entity that is a parent of, or owns a controlling interest in, the consultant or investment adviser; (iii) any entity that is a subsidiary of, or in which a controlling interest is owned by, the consultant or investment adviser; (iv) any persons who have an ownership or distributive income share in the consultant or investment adviser that is in excess of 7.5%; or (v) serves as an executive officer of the consultant or investment adviser.

(6) A disclosure of the names and addresses of all subcontractors, if applicable, and the expected amount of money each will receive under the contract, including an acknowledgment that the contractor must promptly make notification, in writing, if at any time during the term of the contract a contractor adds or changes any subcontractors. For purposes of this subparagraph (6), "subcontractor" does not include non-investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy-voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships.

(7) A description of service to be performed.

(8) A description of the need for the service.

(9) A description of the plan for post-performance review.

(10) A description of the qualifications necessary.

(11) The duration of the contract.

(12) The method for charging and measuring cost.

(d) Notwithstanding any other provision of law, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall not enter into a contract with a consultant that exceeds 5 years in duration. No contract to provide consulting services may be renewed or extended. At the end of the term of a contract, however, the consultant is eligible to compete for a new contract as provided in this Section. No retirement system, pension fund, or investment board shall attempt to avoid or contravene the restrictions of this subsection (d) by any means.

(e) Within 60 days after the effective date of this amendatory Act of the 96th General Assembly, each investment adviser or consultant currently providing services or subject to an existing contract for the provision of services must disclose to the board of trustees all direct and indirect fees, commissions, penalties, and other compensation paid by or on behalf of the investment adviser or consultant in connection with the provision of those services and shall update that disclosure promptly after a modification of those payments or an additional payment. The person shall update the disclosure promptly after a modification of those payments or an additional payment. The disclosures required by this subsection (e) shall be in writing and shall include the date and amount of each payment and the name and address of each recipient of a payment.

(f) The retirement system, pension fund, or board of investment shall develop uniform documents that shall be used for the solicitation, review, and acceptance of all investment services. The form shall include the terms contained in subsection (c) of this Section. All such uniform documents shall be posted on the retirement system's, pension fund's, or investment board's web site.

(g) A description of every contract for investment services shall be posted in a conspicuous manner on the web site of the retirement system, pension fund, or investment board. The description must include the name of the person or entity awarded a contract, the total amount applicable to the contract, the total fees paid or to be paid, and a disclosure approved by the board describing the factors that contributed to the selection of an investment adviser or consultant.

(Source: P.A. 98-433, eff. 8-16-13.)

(40 ILCS 5/1-113.16)

Sec. 1-113.16. Investment transparency.

(a) The purpose of this Section is to provide for transparency in the investment of retirement or pension funds and require the reporting of full and complete information regarding the investments by pension funds, retirement systems, and investment boards.

(b) A retirement system, pension fund, or investment board subject to this Code and any committees established by such system, fund, or board must comply with the Open Meetings Act.

(c) Any retirement system, pension fund, or investment board subject to this Code that establishes a committee shall ensure that the majority of the members on such committee are board members. If any member of a committee is not a member of the board for the system, fund, or board, then that committee member shall be a fiduciary.

(d) A retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2, shall maintain an official web site and make available in a clear and conspicuous manner, and update at least quarterly, all of the following information concerning the investment of funds:

(1) The total amount of funds held by the pension fund, retirement system, or investment board.

(2) The asset allocation for the investments made by the pension fund, retirement system, or investment board.

(3) Current and historic return information.

(4) A detailed listing of the investment advisers for all asset classes.

(5) Performance of investments compared against established benchmarks.

(6) A detailed list of all consultants doing business with the retirement system, pension fund, or investment board.

(7) A detailed list of all contractors, other than investment advisers and consultants, doing business with the retirement system, pension fund, or investment board.

(8) Any requests for investment services.

(9) The names and email addresses of all board members, directors, and senior staff.

(10) The report required under Section 1-109.1 of this Code, if applicable.

(11) The description of each contract required under subsection (g) of Section 1-113.14 of this Code, if applicable.

(e) (Blank). A pension fund whose investments are restricted by Section 1-113.2 of this Code shall make the information required in subsection (d) of this Section available on its web site or in a location that allows the information to be available for inspection by the public.

(f) Nothing in this Section requires the pension fund, retirement system, or investment board to make information available on the Internet that is exempt from inspection and copying under the Freedom of Information Act.

(Source: P.A. 96-6, eff. 4-3-09.)

(40 ILCS 5/1-113.20)

Sec. 1-113.20. Investment strategies; explicit and implicit costs. Every pension fund, retirement system, and investment board created under this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall instruct the fund's, system's, or board's investment advisors to utilize investment strategies designed to ensure that all securities transactions are executed in such a manner that the total explicit and implicit costs and total proceeds in every transaction are the most favorable under the circumstances.

(Source: P.A. 96-753, eff. 8-25-09.)

(40 ILCS 5/1-150)

Sec. 1-150. Approval of travel or educational mission. The expenses for travel or educational missions of a board member of a retirement system, pension fund, or investment board created under this Code, except those whose investments are restricted by Section 1-113.2 of this Code, must be approved by a majority of the board prior to the travel or educational mission.

(Source: P.A. 96-6, eff. 4-3-09.)

(40 ILCS 5/1A-103)

Sec. 1A-103. Rules. The Department is authorized to promulgate rules necessary for the administration and enforcement of this Code. Except as otherwise provided under this Code, these rules shall apply only to pension funds established under Article 3 or Article 4 of this Code. Rules adopted pursuant to this Section shall govern where conflict with local rules and regulations exists.

The Department shall revise its rules to reflect the consolidation of the Article 3 and 4 pension funds pursuant to this amendatory Act of the 100th General Assembly.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1A-104)

Sec. 1A-104. Examinations and investigations.

(a) The Division shall make periodic examinations and investigations of all pension funds established under this Code and maintained for the benefit of employees and officers of governmental units in the State of Illinois. However, in lieu of making an examination and investigation, the Division may accept and rely upon a report of audit or examination of any pension fund made by an independent certified public accountant pursuant to the provisions of the Article of this Code governing the pension fund. The acceptance of the report of audit or examination does not bar the Division from making a further audit, examination, and investigation if deemed necessary by the Division.

The Department may implement a flexible system of examinations under which it directs resources as it deems necessary or appropriate. In consultation with the pension fund being examined, the Division may retain attorneys, independent actuaries, independent certified public accountants, and other professionals and specialists as examiners, the cost of which (except in the case of pension funds established under Article 3 or 4) shall be borne by the pension fund that is the subject of the examination.

(b) (Blank). The Division shall examine or investigate each pension fund established under Article 3 or Article 4 of this Code. The schedule of each examination shall be such that each fund shall be examined once every 3 years.

Each examination shall include the following:

(1) an audit of financial transactions, investment policies, and procedures;

(2) an examination of books, records, documents, files, and other pertinent memoranda relating to financial, statistical, and administrative operations;

(3) a review of policies and procedures maintained for the administration and operation of the pension fund;

(4) a determination of whether or not full effect is being given to the statutory provisions governing the operation of the pension fund;

(5) a determination of whether or not the administrative policies in force are in accord with the purposes of the statutory provisions and effectively protect and preserve the rights and equities of the participants;

(6) a determination of whether or not proper financial and statistical records have been established and adequate documentary evidence is recorded and maintained in support of the several types of annuity and benefit payments being made; and

(7) a determination of whether or not the calculations made by the fund for the payment of all annuities and benefits are accurate.

In addition, the Division may conduct investigations, which shall be identified as such and which may include one or more of the items listed in this subsection.

A copy of the report of examination or investigation as prepared by the Division shall be submitted to the secretary of the board of trustees of the pension fund examined or investigated and to the chief executive officer of the municipality. The Director, upon request, shall grant a hearing to the officers or trustees of the pension fund or their duly appointed representatives, upon any facts contained in the report of examination. The hearing shall be conducted before filing the report or making public any information contained in the report. The Director may withhold the report from public inspection for up to 60 days following the hearing.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/1A-108)

Sec. 1A-108. Report to the Governor and General Assembly. On or before October 1 following the convening of a regular session of the General Assembly, the Division shall submit a report to the Governor and General Assembly setting forth the latest financial statements on the pension funds operating in the State of Illinois, a summary of the current provisions underlying these funds, and a report on any changes that have occurred in these provisions since the date of the last such report submitted by the Division.

The report shall also include the results of examinations made by the Division of any pension fund and any specific recommendations for legislative and administrative correction that the Division deems necessary. The report may embody general recommendations concerning desirable changes in any existing pension, annuity, or retirement laws designed to standardize and establish uniformity in their basic provisions and to bring about an improvement in the financial condition of the pension funds. The purposes of these recommendations and the objectives sought shall be clearly expressed in the report.

The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Speaker, the Minority Leader, and the Clerk of the House of Representatives, the President, the Minority Leader, and the Secretary of the Senate, and the Legislative Research Unit, as required by Section 3.1 of the General Assembly Organization Act, and filing additional copies with the State Government Report Distribution Center for the General Assembly as required under paragraph (t) of Section 7 of the State Library Act.

Upon request, the Division shall distribute additional copies of the report at no charge to the secretary of each pension fund established under Article 3 or 4, the treasurer or fiscal officer of each municipality participating in the Downstate Police Officers Pension Fund or the Downstate Firefighters Pension Fund with an established police or firefighter pension fund, the secretary of each pension benefit determination and payment board established under Article 3 or 4 of this Code, the executive director of every other pension fund established under this Code, and to public libraries, State agencies, and police, firefighter, and municipal organizations active in the public pension area.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1A-108.5)

Sec. 1A-108.5. Economic opportunity investments.

(a) For the purposes of this Section:

"Economic opportunity investment" means a qualified investment, managed passively or actively by the pension fund, that promotes economic development within the State of Illinois by providing financially prudent investment opportunities in or through the use of (a) Illinois businesses or (b) Illinois-based projects that promote the economy of the State or a region of the State, including without limitation promotion of venture capital programs, coal and other natural resource development, tourism development, infrastructure development, real estate development, and job development within the State of Illinois, while producing a competitive rate of return commensurate with the risk of investment.

"Illinois business" means a business, including an investment adviser, that is headquartered in Illinois.

"Illinois-based project" means an individual project of a business, including the provision of products and investment and other services to the pension fund, that will result in the conduct of business within the State, the employment of individuals within the State, or the acquisition of real property located within the State.

(b) It is the public policy of the State of Illinois to encourage the pension funds, and any State entity investing funds on behalf of pension funds, to promote the economy of Illinois through the use of economic opportunity investments to the greatest extent feasible within the bounds of financial and fiduciary prudence.

(c) Each pension fund, except pension funds created under Articles 3 and 4 of this Code, shall submit a report to the Governor and the General Assembly by September 1 of each year, beginning in 2009, that identifies the economic opportunity investments made by the fund, the primary location of the business or project, the percentage of the fund's assets in economic opportunity investments, and the actions that the fund has undertaken to increase the use of economic opportunity investments.

(d) Pension funds created under Articles 2, 14, 15, 16, and 18 of this Code Act, and any State agency investing funds on behalf of those pension funds, must make reasonable efforts to invest in economic opportunity investments.

(e) In making economic opportunity investments, trustees and fiduciaries must comply with the relevant requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, and 1-111 of this Code. Economic opportunity investments that otherwise comply with this Code shall not be deemed imprudent solely because they are investments in an Illinois business or Illinois-based project.

(Source: P.A. 96-753, eff. 8-25-09.)

(40 ILCS 5/1A-110)

Sec. 1A-110. Actuarial statements by pension funds established under Articles other than 3 or 4.

(a) Each pension fund established under an Article of this Code other than Article 3 or 4 shall include as part of its annual statement a complete actuarial statement applicable to the plan year.

The actuarial statement shall be filed with the Division within 9 months after the close of the fiscal year of the pension fund. Any pension fund that fails to file within that time is subject to the penalty provisions of Section 1A-113.

The board of trustees of each pension fund subject to this Section, on behalf of all its participants, shall engage an enrolled actuary who shall be responsible for the preparation of the materials comprising the actuarial statement. The enrolled actuary shall utilize such assumptions and methods as are necessary for the contents of the matters reported in the actuarial statement to be reasonably related to the experience of the plan and to reasonable expectations, and to represent in the aggregate the actuary's best estimate of anticipated experience under the plan.

The actuarial statement shall include a description of the actuarial assumptions and methods used to determine the actuarial values in the statement and shall disclose the impact of significant changes in the actuarial assumptions and methods, plan provisions, and other pertinent factors on the actuarial position of the plan.

The actuarial statement shall include a statement by the enrolled actuary that to the best of his or her knowledge the actuarial statement is complete and accurate and has been prepared in accordance with generally accepted actuarial principles and practice.

For the purposes of this Section, "enrolled actuary" means an actuary who (1) is a member of the Society of Actuaries or the American Academy of Actuaries and (2) either is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974 or was engaged in providing actuarial services to a public retirement plan in Illinois on July 1, 1983.

(b) The actuarial statement referred to in subsection (a) shall include all of the following:

(1) The dates of the plan year and the date of the actuarial valuation applicable to the plan year for which the actuarial statement is filed.

(2) The amount of (i) the contributions made by the participants, and (ii) all other contributions, including those made by the employer or employers.

(3) The total estimated amount of the covered compensation with respect to active participants for the plan year for which the statement is filed.

(4) The number of (i) active participants, (ii) terminated participants currently eligible for deferred vested pension benefits or the return of contributions made by those participants, and (iii) all other participants and beneficiaries included in the actuarial valuation.

(5) The following values as of the date of the actuarial valuation applicable to the plan year for which the statement is filed:

(i) The current value of assets accumulated in the plan.

(ii) The unfunded accrued liability. The major factors that have resulted in the change in the unfunded accrued liability from the previous year shall be identified. Effects that are individually significant shall be separately identified. As a minimum, the effect of the following shall be shown: plan amendments; changes in actuarial assumptions; experience less (or more) favorable than that assumed; and contributions less (or more) than the normal cost plus interest on the unfunded accrued liability.

(iii) The amount of accumulated contributions for active participants (including interest, if any).

(iv) The actuarial present value of credited projected benefits for vested participants currently receiving benefits, other vested participants, and non-vested participants.

(6) The actuarial value of assets.

(7) Any other information that is necessary to fully and fairly disclose the actuarial position of the plan and any other information the enrolled actuary may present.

(8) Any other information regarding the plan that the Division may by rule request.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1A-112)

Sec. 1A-112. Fees.

(a) Every pension fund that is required to file an annual statement under Section 1A-109 shall pay to the Department an annual compliance fee. The In the case of a pension fund under Article 3 or 4 of this Code, the annual compliance fee shall be 0.02% (2 basis points) of the total assets of the pension fund, as reported in the most current annual statement of the fund, but not more than $8,000. In the case of all other pension funds and retirement systems, the annual compliance fee shall be $8,000.

(b) The annual compliance fee shall be due on June 30 for the following State fiscal year, except that the fee payable in 1997 for fiscal year 1998 shall be due no earlier than 30 days following the effective date of this amendatory Act of 1997.

(c) Any information obtained by the Division that is available to the public under the Freedom of Information Act and is either compiled in published form or maintained on a computer processible medium shall be furnished upon the written request of any applicant and the payment of a reasonable information services fee established by the Director, sufficient to cover the total cost to the Division of compiling, processing, maintaining, and generating the information. The information may be furnished by means of published copy or on a computer processed or computer processible medium.

No fee may be charged to any person for information that the Division is required by law to furnish to that person.

(d) Except as otherwise provided in this Section, all fees and penalties collected by the Department under this Code shall be deposited into the Public Pension Regulation Fund.

(e) Fees collected under subsection (c) of this Section and money collected under Section 1A-107 shall be deposited into the Technology Management Revolving Fund and credited to the account of the Department's Public Pension Division. This income shall be used exclusively for the purposes set forth in Section 1A-107. Notwithstanding the provisions of Section 408.2 of the Illinois Insurance Code, no surplus funds remaining in this account shall be deposited in the Insurance Financial Regulation Fund. All money in this account that the Director certifies is not needed for the purposes set forth in Section 1A-107 of this Code shall be transferred to the Public Pension Regulation Fund.

(f) Nothing in this Code prohibits the General Assembly from appropriating funds from the General Revenue Fund to the Department for the purpose of administering or enforcing this Code.

(Source: P.A. 100-23, eff. 7-6-17.)

(40 ILCS 5/3-102) (from Ch. 108 1/2, par. 3-102)

Sec. 3-102. Terms defined. The terms used in this Article have the meanings ascribed to them in Sections 3-103 through 3-108.4 3-108.3, except when the context otherwise requires.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/3-102.1 new)

Sec. 3-102.1. Fund. "Fund" or "pension fund": Until January 1, 2021, a police pension fund established by a municipality under this Article.

Beginning January 1, 2021, "Fund" or "pension fund" means the Downstate Police Officers Pension Fund created under this Article to consolidate all of the individual pension funds previously established under this Article; depending on the context, the terms may include one or more of those previously established pension funds.

(40 ILCS 5/3-103) (from Ch. 108 1/2, par. 3-103)

Sec. 3-103. Municipality; participating municipality; governing body.

(a) "Municipality": (1) Any city, village or incorporated town of 5,000 or more but less than 500,000 inhabitants, as determined from the United States Government statistics or a census taken at any time by the city, village or incorporated town and (2) any city, village or incorporated town of less than 5,000 inhabitants which, by referendum held under Section 3-145 adopts this Article.

(b) "Participating municipality" means a municipality, as defined in subsection (a), that both is required (or has elected) to and does in fact participate in the Downstate Police Officers Pension Fund under this Article.

(c) "Governing body" includes the township board or other persons empowered to draft the tentative budget and appropriation ordinance and the electors of such a township acting at the annual or special meeting of town electors.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-104.5 new)

Sec. 3-104.5. Benefit board. "Pension benefit determination and payment board" or "benefit board": The pension benefit determination and payment board of a municipality as established under subsection (b) of Section 3-128; depending on the context, the term may include the former board of trustees of the police pension fund of the municipality.

(40 ILCS 5/3-105) (from Ch. 108 1/2, par. 3-105)

Sec. 3-105. Board. "Board": Until January 1, 2021, the The board of trustees of the police pension fund of a municipality as established in subsection (a) of Section 3-128.

Beginning January 1, 2021, the Board of Trustees of the Downstate Police Officers Pension Fund created under this Article to consolidate all of the individual pension funds previously established under this Article, as established in subsection (f) of Section 3-128, or, until that board is established and has assumed its duties, the Transition Board created under Section 3-101.1; depending on the context, the term may include the former board of trustees of one or more of those previously established pension funds.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-108.2)

Sec. 3-108.2. Participant. "Participant": A police officer or deferred pensioner of the Fund a pension fund, or a beneficiary of the Fund pension fund.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/3-108.3)

Sec. 3-108.3. Beneficiary. "Beneficiary": A person receiving benefits from the Fund a pension fund, including, but not limited to, retired pensioners, disabled pensioners, their surviving spouses, minor children, disabled children, and dependent parents. If a special needs trust as described in Section 1396p(d)(4) of Title 42 of the United States Code, as amended from time to time, has been established for a disabled adult child, then the special needs trust may stand in lieu of the disabled adult child as a beneficiary for the purposes of this Article.

(Source: P.A. 96-1143, eff. 7-21-10.)

(40 ILCS 5/3-108.4 new)

Sec. 3-108.4. Prescribed rate of interest. "Prescribed rate of interest": The rate of interest to be used for calculation of the rates of municipality contributions and the amounts of annuities and benefits, as determined by the Board in consultation with the actuary on the basis of the probable effective rate of interest on a long-term basis. The prescribed rate shall also be used to distribute, to the extent reasonably determinable prior to the year for which the rate is applicable, the current earnings (excluding capital gains) on assets of the Fund to reserves as provided by Section 3-140.4, after due allowance is made for special reserve requirements under Section 3-146.6.

(40 ILCS 5/3-109.4)

Sec. 3-109.4. Defined contribution plan for certain police officers.

(a) Each municipality shall establish a defined contribution plan that aggregates police officer and employer contributions in individual accounts used for retirement. The defined contribution plan, including both police officer and employer contributions, established by the municipality must, at a minimum: meet the safe harbor provisions of the Internal Revenue Code of 1986, as amended; be a qualified plan under the Internal Revenue Code of 1986, as amended; and comply with all other applicable laws, rules, and regulations. Contributions shall vest immediately upon deposit in the police officer's account.

A municipality that becomes a participating municipality on or after January 1, 2021 is not required to establish a defined contribution plan under this Section.

On and after January 1, 2021, the participating municipality shall continue to administer the defined contribution plan and the assets and liabilities of the defined contribution plan shall not be consolidated.

A police officer who participates in the defined contribution plan under this Section may not earn creditable service or otherwise participate in the defined benefit plan offered by his or her employing municipality, except as an annuitant in another fund or as a survivor, while he or she is a participant in the defined contribution plan. The defined contribution plan under this Section shall not be construed to be a pension, annuity, or other defined benefit under this Code.

(b) Before January 1, 2021 (the consolidation date), if If a police officer who has more than 10 years of creditable service in a fund enters active service with a different municipality, he or she may elect to participate in the defined contribution plan under this Section in lieu of the defined benefit plan.

A police officer who has elected under this subsection to participate in the defined contribution plan may, in writing, rescind that election in accordance with the rules of the Board board. Any employer contributions, and the earnings thereon, shall remain vested in the police officer's account. A police officer who rescinds the election may begin participating in the defined benefit plan on the first day of the month following the rescission in accordance with the rules of the Board.

(c) As used in this Section, "defined benefit plan" means the retirement plan available to police officers under this Article who do not participate in the defined contribution plan under this Section.

(Source: P.A. 100-281, eff. 8-24-17.)

(40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)

Sec. 3-110. Creditable service.

(a) "Creditable service" is the time served by a police officer as a member of a regularly constituted police force of a municipality. In computing creditable service furloughs without pay exceeding 30 days shall not be counted, but all leaves of absence for illness or accident, regardless of length, and all periods of disability retirement for which a police officer has received no disability pension payments under this Article shall be counted.

(a-3) Upon the consolidation of the police pension funds under this Article into the Downstate Police Officers Pension Fund on January 1, 2021, creditable service under any such pension fund shall be deemed to be creditable service in the Downstate Police Officers Pension Fund, subject to the following provisions:

(1) The consolidation of police pension funds into the Downstate Police Officers Pension Fund shall not result in the duplication of any service credit based on the same period of service in this or any other pension fund or retirement system subject to this Code.

The consolidation of a former police pension fund under this Article into the Downstate Police Officers Pension Fund shall not be construed as resulting in service rendered by an employee being accredited in more than one pension fund.

(2) If this Section or any other provision of this Article imposes a limit on the amount of creditable service that may be established for a particular activity or purpose, and prior to consolidation a police officer has established periods of creditable service for that activity or purpose in more than one former police pension fund under this Article, which periods are within that limitation for each such fund but together exceed that limitation, then upon consolidation all such credit previously established by the police officer shall be preserved under the Fund, but no additional creditable service for that activity or purpose may be established by that police officer in the Fund.

(3) The consolidation of police pension funds into the Downstate Police Officers Pension Fund shall not entitle any person or pension fund to a refund of any contribution or payment previously paid or transferred in order to establish or transfer creditable service under this Article.

Service credit established under this Section before the consolidation date shall be deemed to be service credit under the Downstate Police Officers Pension Fund and shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(a-5) Up to 3 years of time during which the police officer receives a disability pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 shall be counted as creditable service, provided that (i) the police officer returns to active service after the disability for a period at least equal to the period for which credit is to be established and (ii) the police officer makes contributions to the fund based on the rates specified in Section 3-125.1 and the salary upon which the disability pension is based. These contributions may be paid at any time prior to the commencement of a retirement pension. The police officer may, but need not, elect to have the contributions deducted from the disability pension or to pay them in installments on a schedule approved by the board. If not deducted from the disability pension, the contributions shall include interest at the rate of 6% per year, compounded annually, from the date for which service credit is being established to the date of payment. If contributions are paid under this subsection (a-5) in excess of those needed to establish the credit, the excess shall be refunded. This subsection (a-5) applies to persons receiving a disability pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on the effective date of this amendatory Act of the 91st General Assembly, as well as persons who begin to receive such a disability pension after that date.

(b) Creditable service includes all periods of service in the military, naval or air forces of the United States entered upon while an active police officer of a municipality, provided that upon applying for a permanent pension, and in accordance with the rules of the Board board, the police officer pays into the Fund fund the amount the officer would have contributed if he or she had been a regular contributor during such period, to the extent that the municipality which the police officer served has not made such contributions in the officer's behalf. The total amount of such creditable service shall not exceed 5 years, except that any police officer who on July 1, 1973 had more than 5 years of such creditable service shall receive the total amount thereof.

(b-5) Creditable service includes all periods of service in the military, naval, or air forces of the United States entered upon before beginning service as an active police officer of a municipality, provided that, in accordance with the rules of the Board board, the police officer pays into the Fund fund the amount the police officer would have contributed if he or she had been a regular contributor during such period, plus an amount determined by the Board to be equal to the municipality's normal cost of the benefit, plus interest at the actuarially assumed rate calculated from the date the employee last became a police officer under this Article. The total amount of such creditable service shall not exceed 2 years.

(c) Creditable service also includes service rendered by a police officer while on leave of absence from a police department to serve as an executive of an organization whose membership consists of members of a police department, subject to the following conditions: (i) the police officer is a participant of the Fund a fund established under this Article with at least 10 years of service as a police officer; (ii) the police officer received no credit for such service under any other retirement system, pension fund, or annuity and benefit fund included in this Code; (iii) pursuant to the rules of the Board board the police officer pays to the Fund fund the amount he or she would have contributed had the officer been an active member of the police department; (iv) the organization pays a contribution equal to the municipality's normal cost for that period of service; and (v) for all leaves of absence under this subsection (c), including those beginning before the effective date of this amendatory Act of the 97th General Assembly, the police officer continues to remain in sworn status, subject to the professional standards of the public employer or those terms established in statute.

(d)(1) Creditable service also includes periods of service originally established in another police pension fund under this Article or in the Fund established under Article 7 of this Code for which (i) the contributions have been transferred under Section 3-110.7 or Section 7-139.9 and (ii) any additional contribution required under paragraph (2) of this subsection has been paid in full in accordance with the requirements of this subsection (d).

(2) If the board of the pension fund to which creditable service and related contributions are transferred under Section 7-139.9 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then in order to establish that creditable service the police officer must pay to the pension fund, within the payment period specified in paragraph (3) of this subsection, an additional contribution equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection. If the board of the pension fund to which creditable service and related contributions are transferred under Section 3-110.7 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then the police officer may elect (A) to establish that creditable service by paying to the pension fund, within the payment period specified in paragraph (3) of this subsection (d), an additional contribution equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection (d) or (B) to have his or her creditable service reduced by an amount equal to the difference between the amount transferred under Section 3-110.7 and the true cost to the pension fund of allowing that creditable service to be established, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection (d).

(3) Except as provided in paragraph (4), the additional contribution that is required or elected under paragraph (2) of this subsection (d) must be paid to the board (i) within 5 years from the date of the transfer of contributions under Section 3-110.7 or 7-139.9 and (ii) before the police officer terminates service with the fund. The additional contribution may be paid in a lump sum or in accordance with a schedule of installment payments authorized by the board.

(4) If the police officer dies in service before payment in full has been made and before the expiration of the 5-year payment period, the surviving spouse of the officer may elect to pay the unpaid amount on the officer's behalf within 6 months after the date of death, in which case the creditable service shall be granted as though the deceased police officer had paid the remaining balance on the day before the date of death.

(5) If the additional contribution that is required or elected under paragraph (2) of this subsection (d) is not paid in full within the required time, the creditable service shall not be granted and the police officer (or the officer's surviving spouse or estate) shall be entitled to receive a refund of (i) any partial payment of the additional contribution that has been made by the police officer and (ii) those portions of the amounts transferred under subdivision (a)(1) of Section 3-110.7 or subdivisions (a)(1) and (a)(3) of Section 7-139.9 that represent employee contributions paid by the police officer (but not the accumulated interest on those contributions) and interest paid by the police officer to the prior pension fund in order to reinstate service terminated by acceptance of a refund.

At the time of paying a refund under this item (5), the pension fund shall also repay to the pension fund from which the contributions were transferred under Section 3-110.7 or 7-139.9 the amount originally transferred under subdivision (a)(2) of that Section, plus interest at the rate of 6% per year, compounded annually, from the date of the original transfer to the date of repayment. Amounts repaid to the Article 7 fund under this provision shall be credited to the appropriate municipality.

Transferred credit that is not granted due to failure to pay the additional contribution within the required time is lost; it may not be transferred to another pension fund and may not be reinstated in the pension fund from which it was transferred.

(6) The Public Employee Pension Fund Division of the Department of Insurance shall establish by rule the manner of making the calculation required under paragraph (2) of this subsection, taking into account the appropriate actuarial assumptions; the police officer's service, age, and salary history; the level of funding of the pension fund to which the credits are being transferred; and any other factors that the Division determines to be relevant. The rules may require that all calculations made under paragraph (2) be reported to the Division by the board performing the calculation, together with documentation of the creditable service to be transferred, the amounts of contributions and interest to be transferred, the manner in which the calculation was performed, the numbers relied upon in making the calculation, the results of the calculation, and any other information the Division may deem useful.

(e)(1) Creditable service also includes periods of service originally established in the Fund established under Article 7 of this Code for which the contributions have been transferred under Section 7-139.11.

(2) If the board of the pension fund to which creditable service and related contributions are transferred under Section 7-139.11 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then the amount of creditable service the police officer may establish under this subsection (e) shall be reduced by an amount equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (3) of this subsection.

(3) The Public Pension Division of the Department of Financial and Professional Regulation shall establish by rule the manner of making the calculation required under paragraph (2) of this subsection, taking into account the appropriate actuarial assumptions; the police officer's service, age, and salary history; the level of funding of the pension fund to which the credits are being transferred; and any other factors that the Division determines to be relevant. The rules may require that all calculations made under paragraph (2) be reported to the Division by the board performing the calculation, together with documentation of the creditable service to be transferred, the amounts of contributions and interest to be transferred, the manner in which the calculation was performed, the numbers relied upon in making the calculation, the results of the calculation, and any other information the Division may deem useful.

(4) Until January 1, 2010, a police officer who transferred service from the Fund established under Article 7 of this Code under the provisions of Public Act 94-356 may establish additional credit, but only for the amount of the service credit reduction in that transfer, as calculated under paragraph (3) of this subsection (e). This credit may be established upon payment by the police officer of an amount to be determined by the board, equal to (1) the amount that would have been contributed as employee and employer contributions had all of the service been as an employee under this Article, plus interest thereon at the rate of 6% per year, compounded annually from the date of service to the date of transfer, less (2) the total amount transferred from the Article 7 Fund, plus (3) interest on the difference at the rate of 6% per year, compounded annually, from the date of the transfer to the date of payment. The additional service credit is allowed under this amendatory Act of the 95th General Assembly notwithstanding the provisions of Article 7 terminating all transferred credits on the date of transfer.

(Source: P.A. 96-297, eff. 8-11-09; 96-1260, eff. 7-23-10; 97-651, eff. 1-5-12.)

(40 ILCS 5/3-110.05 new)

Sec. 3-110.05. Police officer with service under more than one participating municipality.

(a) This Section applies only to police officers with creditable service earned under more than one participating municipality who are in service under this Article on or after January 1, 2021 (the consolidation date) and to the survivors of such police officers.

(b) The calculation of benefits under this Article that first become payable on or after January 1, 2021 to a police officer to whom this Section applies, or to a survivor of such a police officer, shall include all of the police officer's creditable service and salary credits under the Downstate Police Officers Pension Fund as though arising under that single Fund, even though they originally resulted from service under more than one municipality or more than one Article 3 pension fund. The Board shall, however, consider those municipalities and pension funds separately in determining how benefits will be chargeable to the appropriate municipal accounts and reserves.

(c) In the case of a benefit to which subsection (b) applies:

(1) the benefit board of each affected municipality shall be responsible for certifying to the Board of the Fund the relevant service credit, payroll, and employee contribution data arising under that municipality;

(2) the benefit shall be determined, granted, and paid directly by the Board of Trustees, rather than by the benefit boards of the affected municipalities acting as agents of the Fund; and

(3) the cost of the benefit shall be attributed proportionally to the separate reserves and accounts of the appropriate municipalities in a manner to be determined by the Board.

(d) In the event that the consolidation of pension funds under this Article operates to create a benefit impairment for a person to whom this Section applies, the Board of the Fund shall, by rule, allow the police officer or survivor to elect to receive instead a benefit equal to the best benefit that would be available to him or her under the provisions of this Article in effect at any time during the police officer's active service prior to the consolidation date.

(40 ILCS 5/3-110.2) (from Ch. 108 1/2, par. 3-110.2)

Sec. 3-110.2. Transfer of creditable service to General Assembly Retirement System.

(a) An active member of the General Assembly Retirement System may apply to transfer his or her credits and creditable service accumulated in any police pension fund under this Article to the General Assembly Retirement System. Such transfer shall be made forthwith. Payment by the Downstate Police Officers Pension Fund police pension fund to the General Assembly Retirement System shall be made at the same time and shall consist of:

(1) the amounts credited to the applicant, through employee contributions on the date of transfer; and

(2) municipality contributions equal to the accumulated employee contributions as determined under subparagraph (1) above. Participation in the Fund police pension fund shall terminate on the date of transfer.

(b) An active member of the General Assembly may reinstate service and creditable service terminated upon receipt of a refund, by payment to the Fund fund of the amount of the refund together with interest thereon at the rate of 6% per year to the date of payment.

(c) Transactions under this Section taking place on or after January 1, 2021 (the consolidation date) shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-110.4) (from Ch. 108 1/2, par. 3-110.4)

Sec. 3-110.4. Transfer of creditable service to Article 8, 9 or 13 fund.

(a) Any city officer as defined in Section 8-243.2 of this Code, any county officer elected by vote of the people who is a participant in a pension fund established under Article 9 of this Code, any chief of the County Police Department or undersheriff of the County Sheriff's Department who has elected under subparagraph (j) of Section 9-128.1 to be included within the provisions of Section 9-128.1 of Article 9 of this Code, and any elected sanitary district commissioner who is a participant in a pension fund established under Article 13 of this Code, may apply to transfer his or her credits and creditable service accumulated in the Downstate Police Officers Pension Fund any police pension fund established under this Article to such Article 8, 9 or 13 fund. Such transfer shall be made forthwith. Payment by the Downstate Police Officers Pension Fund police pension fund to the Article 8, 9 or 13 fund shall be made at the same time and shall consist of:

(1) the amounts credited to the applicant through employee contributions on the date of transfer; and

(2) municipality contributions equal to the accumulated employee contributions as determined under item (1) above.

Participation in the Downstate Police Officers Pension Fund police pension fund shall terminate on the date of transfer.

(b) Any such elected city officer, county officer, chief of the County Police Department, undersheriff of the County Sheriff's Department, or sanitary district commissioner may reinstate credits and creditable service terminated upon receipt of a refund, by payment to the Downstate Police Officers Pension Fund fund of the amount of the refund together with interest thereon at the rate of 6% per year, compounded annually from the date of refund to the date of payment.

(c) Transactions under this Section taking place on or after the consolidation date shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(Source: P.A. 89-643, eff. 8-9-96.)

(40 ILCS 5/3-110.6) (from Ch. 108 1/2, par. 3-110.6)

Sec. 3-110.6. Transfer to Article 14 System.

(a) Any active member of the State Employees' Retirement System who is a State policeman, an investigator for the Secretary of State, a conservation police officer, an investigator for the Office of the Attorney General, an investigator for the Department of Revenue, an investigator for the Office of the State's Attorneys Appellate Prosecutor, or a controlled substance inspector may apply for transfer of some or all of his or her creditable service accumulated in the Downstate Police Officers Pension Fund any police pension fund under this Article to the State Employees' Retirement System in accordance with Section 14-110. The creditable service shall be transferred only upon payment by the Downstate Police Officers Pension Fund police pension fund to the State Employees' Retirement System of an amount equal to:

(1) the amounts accumulated to the credit of the applicant for the service to be transferred on the books of the Downstate Police Officers Pension Fund fund on the date of transfer; and

(2) employer contributions in an amount equal to the amount determined under subparagraph (1); and

(3) any interest paid by the applicant in order to reinstate service to be transferred.

Participation in the Downstate Police Officers Pension Fund police pension fund with respect to the service to be transferred shall terminate on the date of transfer.

(b) Any person applying to transfer service under this Section may reinstate service that was terminated by receipt of a refund, by paying to the police pension fund the amount of the refund with interest thereon at the actuarially assumed rate of interest, compounded annually, from the date of refund to the date of payment.

(c) Transactions under this Section taking place on or after the consolidation date shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(Source: P.A. 95-530, eff. 8-28-07; 96-745, eff. 8-25-09.)

(40 ILCS 5/3-110.7)

Sec. 3-110.7. Transfer between Article 3 funds.

(a) Until January 1, 2021 (the consolidation date), an An active member of a pension fund established under this Article may apply for transfer to that fund of his or her creditable service and related contributions accumulated in any other police pension fund established under this Article, except that a police officer may not transfer creditable service under this Section from a pension fund unless (i) the police officer actively served in the police department under that fund for at least 2 years, (ii) the police officer actively served in the police department under that fund for less than 2 years but was laid off or otherwise involuntarily terminated for a reason other than the fault of the officer, or (iii) the police officer was not in service in the police department under that fund on or after the effective date of this Section. Upon receiving the application, that other pension fund shall transfer to the pension fund in which the applicant currently participates an amount equal to:

(1) the amounts actually contributed by or on behalf of the applicant to the fund as employee contributions (including any interest paid by the applicant in order to reinstate service), plus interest on those amounts at the rate of 6% per year, compounded annually, from the date of contribution to the date of transfer; plus

(2) an amount representing employer contributions, equal to the total amount determined under subdivision (1).

Participation in that other pension fund shall terminate on the date of transfer.

(b) An active member of the Fund a pension fund established under this Article may reinstate in the Fund service in any other pension fund established under this Article that was terminated by receipt of a refund, by paying to the Fund that other pension fund the amount of the refund plus interest thereon at the rate of 6% per year, compounded annually, from the date of refund to the date of payment.

(Source: P.A. 90-460, eff. 8-17-97.)

(40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111)

Sec. 3-111. Pension.

(a) A police officer age 50 or more with 20 or more years of creditable service, who is not a participant in the self-managed plan under Section 3-109.3 and who is no longer in service as a police officer in any participating municipality, shall receive a pension of 1/2 of the salary attached to the rank held by the officer on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater. The pension shall be increased by 2.5% of such salary for each additional year of service over 20 years of service through 30 years of service, to a maximum of 75% of such salary.

The changes made to this subsection (a) by this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.

(a-5) No pension in effect on or granted after June 30, 1973 shall be less than $200 per month. Beginning July 1, 1987, the minimum retirement pension for a police officer having at least 20 years of creditable service shall be $400 per month, without regard to whether or not retirement occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this subsection, the Section 3-113.1 minimum controls.

(b) A police officer mandatorily retired from service due to age by operation of law, having at least 8 but less than 20 years of creditable service, shall receive a pension equal to 2 1/2% of the salary attached to the rank he or she held on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater, for each year of creditable service.

A police officer who retires or is separated from service having at least 8 years but less than 20 years of creditable service, who is not mandatorily retired due to age by operation of law, and who does not apply for a refund of contributions at his or her last separation from police service, shall receive a pension upon attaining age 60 equal to 2.5% of the salary attached to the rank held by the police officer on the police force for one year immediately prior to retirement or, beginning July 1, 1987 for persons terminating service on or after that date, the salary attached to the rank held on the last day of service or for one year prior to the last day, whichever is greater, for each year of creditable service.

(c) This subsection (c) applies only to pensions granted before January 1, 2021 (the consolidation date).

A police officer no longer in service who has at least one but less than 8 years of creditable service in a police pension fund but meets the requirements of this subsection (c) shall be eligible to receive a pension from that fund equal to 2.5% of the salary attached to the rank held on the last day of service under that fund or for one year prior to that last day, whichever is greater, for each year of creditable service in that fund. The pension shall begin no earlier than upon attainment of age 60 (or upon mandatory retirement from the fund by operation of law due to age, if that occurs before age 60) and in no event before the effective date of this amendatory Act of 1997.

In order to be eligible for a pension under this subsection (c), the police officer must have at least 8 years of creditable service in a second police pension fund under this Article and be receiving a pension under subsection (a) or (b) of this Section from that second fund. The police officer need not be in service on or after the effective date of this amendatory Act of 1997.

(d) Notwithstanding any other provision of this Article, the provisions of this subsection (d) apply to a person who is not a participant in the self-managed plan under Section 3-109.3 and who first becomes a police officer under this Article on or after January 1, 2011.

A police officer age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly pension for his service as a police officer computed by multiplying 2.5% for each year of such service by his or her final average salary.

The pension of a police officer who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the police officer's age is under age 55.

The maximum pension under this subsection (d) shall be 75% of final average salary.

For the purposes of this subsection (d), "final average salary" means the average monthly salary obtained by dividing the total salary of the police officer during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/3-111.1) (from Ch. 108 1/2, par. 3-111.1)

Sec. 3-111.1. Increase in pension.

(a) Except as provided in subsection (e), the monthly pension of a police officer who retires after July 1, 1971, and prior to January 1, 1986, shall be increased, upon either the first of the month following the first anniversary of the date of retirement if the officer is 60 years of age or over at retirement date, or upon the first day of the month following attainment of age 60 if it occurs after the first anniversary of retirement, by 3% of the originally granted pension and by an additional 3% of the originally granted pension in January of each year thereafter.

(b) The monthly pension of a police officer who retired from service with 20 or more years of service, on or before July 1, 1971, shall be increased in January of the year following the year of attaining age 65 or in January of 1972, if then over age 65, by 3% of the originally granted pension for each year the police officer received pension payments. In each January thereafter, he or she shall receive an additional increase of 3% of the original pension.

(c) The monthly pension of a police officer who retires on disability or is retired for disability shall be increased in January of the year following the year of attaining age 60, by 3% of the original grant of pension for each year he or she received pension payments. In each January thereafter, the police officer shall receive an additional increase of 3% of the original pension.

(d) The monthly pension of a police officer who retires after January 1, 1986, shall be increased, upon either the first of the month following the first anniversary of the date of retirement if the officer is 55 years of age or over, or upon the first day of the month following attainment of age 55 if it occurs after the first anniversary of retirement, by 1/12 of 3% of the originally granted pension for each full month that has elapsed since the pension began, and by an additional 3% of the originally granted pension in January of each year thereafter.

The changes made to this subsection (d) by this amendatory Act of the 91st General Assembly apply to all initial increases that become payable under this subsection on or after January 1, 1999. All initial increases that became payable under this subsection on or after January 1, 1999 and before the effective date of this amendatory Act shall be recalculated and the additional amount accruing for that period, if any, shall be payable to the pensioner in a lump sum.

(e) Notwithstanding the provisions of subsection (a), upon the first day of the month following (1) the first anniversary of the date of retirement, or (2) the attainment of age 55, or (3) July 1, 1987, whichever occurs latest, the monthly pension of a police officer who retired on or after January 1, 1977 and on or before January 1, 1986, and did not receive an increase under subsection (a) before July 1, 1987, shall be increased by 3% of the originally granted monthly pension for each full year that has elapsed since the pension began, and by an additional 3% of the originally granted pension in each January thereafter. The increases provided under this subsection are in lieu of the increases provided in subsection (a).

(f) Notwithstanding the other provisions of this Section, beginning with increases granted on or after July 1, 1993, the second and all subsequent automatic annual increases granted under subsection (a), (b), (d), or (e) of this Section shall be calculated as 3% of the amount of pension payable at the time of the increase, including any increases previously granted under this Section, rather than 3% of the originally granted pension amount. Section 1-103.1 does not apply to this subsection (f).

(g) Notwithstanding any other provision of this Article, the monthly pension of a person who first becomes a police officer under this Article on or after January 1, 2011 shall be increased on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the pension start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the pension shall not be increased.

For the purposes of this subsection (g), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the Board of the Fund and the benefit boards of the pension funds.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/3-112) (from Ch. 108 1/2, par. 3-112)

Sec. 3-112. Pension to survivors.

(a) Upon the death of a police officer entitled to a pension under Section 3-111, the surviving spouse shall be entitled to the pension to which the police officer was then entitled. Upon the death of the surviving spouse, or upon the remarriage of the surviving spouse if that remarriage terminates the surviving spouse's eligibility under Section 3-121, the police officer's unmarried children who are under age 18 or who are dependent because of physical or mental disability shall be entitled to equal shares of such pension. If there is no eligible surviving spouse and no eligible child, the dependent parent or parents of the officer shall be entitled to receive or share such pension until their death or marriage or remarriage after the death of the police officer.

Notwithstanding any other provision of this Article, for a person who first becomes a police officer under this Article on or after January 1, 2011, the pension to which the surviving spouse, children, or parents are entitled under this subsection (a) shall be in the amount of 66 2/3% of the police officer's earned pension at the date of death. Nothing in this subsection (a) shall act to diminish the survivor's benefits described in subsection (e) of this Section.

Notwithstanding any other provision of this Article, the monthly pension of a survivor of a person who first becomes a police officer under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor's pension and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the survivor's pension shall not be increased.

For the purposes of this subsection (a), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the Board and the benefit boards of the pension funds.

(b) Upon the death of a police officer while in service, having at least 20 years of creditable service under this Article, or upon the death of a police officer who retired from service with at least 20 years of creditable service under this Article, whether death occurs before or after attainment of age 50, the pension earned by the police officer as of the date of death as provided in Section 3-111 shall be paid to the survivors in the sequence provided in subsection (a) of this Section.

(c) Upon the death of a police officer while in service, having at least 10 but less than 20 years of service under this Article, a pension of 1/2 of the salary attached to the rank or ranks held by the officer for one year immediately prior to death shall be payable to the survivors in the sequence provided in subsection (a) of this Section. If death occurs as a result of the performance of duty, the 10 year requirement shall not apply and the pension to survivors shall be payable after any period of service.

(d) Beginning July 1, 1987, a minimum pension of $400 per month shall be paid to all surviving spouses, without regard to the fact that the death of the police officer occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this subsection, the Section 3-113.1 minimum controls.

(e) The pension of the surviving spouse of a police officer who dies (i) on or after January 1, 2001, (ii) without having begun to receive either a retirement pension payable under Section 3-111 or a disability pension payable under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6, and (iii) as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty shall not be less than 100% of the salary attached to the rank held by the deceased police officer on the last day of service, notwithstanding any provision in this Article to the contrary.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/3-114.1) (from Ch. 108 1/2, par. 3-114.1)

Sec. 3-114.1. Disability pension; line pension - Line of duty.

(a) If a police officer as the result of sickness, accident or injury incurred in or resulting from the performance of an act of duty, is found to be physically or mentally disabled for service in the police department, so as to render necessary his or her suspension or retirement from the police service, the police officer shall be entitled to a disability retirement pension equal to the greatest of (1) 65% of the salary attached to the rank on the police force held by the officer at the date of suspension of duty or retirement, (2) the retirement pension that the police officer would be eligible to receive if he or she retired (but not including any automatic annual increase in that retirement pension), or (3) the pension provided under subsection (d), if applicable.

A police officer shall be considered "on duty" while on any assignment approved by the chief of the police department of the municipality he or she serves, whether the assignment is within or outside the municipality.

(b) If a police officer on disability pension dies while still disabled, the disability pension shall continue to be paid to his or her survivors in the sequence provided in Section 3-112.

(c) From and after July 1, 1987, any pension payable under this Section shall be at least $400 per month, without regard to the fact that the disability or death of the police officer occurred prior to that date. If the minimum pension established in Section 3-113.1 is greater than the minimum provided in this Section, the Section 3-113.1 minimum controls.

(d) A disabled police officer who (1) is receiving a pension under this Section on the effective date of this amendatory Act of the 91st General Assembly, (2) files with the Fund, within 30 days after that effective date and annually thereafter while the pension remains payable, a written application for the benefits of this subsection, including an affidavit stating that the applicant has not earned any income from gainful employment during the most recently concluded tax year and a copy of his or her most recent Illinois income tax return, (3) has service credit in the Fund for at least 7 years of active duty, and (4) has been receiving the pension under this Section for a period which, when added to the officer's total service credit in the Fund, equals at least 20 years, shall be eligible to receive an annual noncompounded increase in his or her pension under this Section, equal to 3% of the original pension.

The benefit board Fund may take appropriate steps to verify the applicant's disability and earnings status, and for this purpose may request from the Department of Revenue a certified copy of the applicant's Illinois income tax return for any year for which a benefit under this Section is payable or has been paid.

The annual increase shall accrue on each anniversary of the initial pension payment date, for so long as the pension remains payable to the disabled police officer and the required annual application is made, except that the annual increases under this subsection shall cease if the disabled police officer earns income from gainful employment. Within 60 days after accepting an initial application under this subsection, the Fund shall pay to the disabled police officer, in a lump sum without interest, the amounts resulting from the annual increases that have accrued retroactively.

This subsection is not limited to persons in active service on or after its effective date, but it applies only to a pension that is payable under this Section to a disabled police officer (rather than a survivor). Upon the death of the disabled police officer, the annuity payable under this Section to his or her survivors shall include any annual increases previously received, but no additional increases shall accrue under this subsection.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-115) (from Ch. 108 1/2, par. 3-115)

Sec. 3-115. Certificate of disability. A disability pension shall not be paid unless there is filed with the applicable benefit board certificates of the police officer's disability, subscribed and sworn to by the police officer if not under legal disability, or by a representative if the officer is under legal disability, and by the police surgeon (if there be one) and 3 practicing physicians selected by the benefit board. The benefit board may require other evidence of disability. Medical examination of a police officer retired for disability shall be made at least once each year prior to attainment of age 50, as verification of the continuance of disability for service as a police officer. No examination shall be required after age 50.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-116.1) (from Ch. 108 1/2, par. 3-116.1)

Sec. 3-116.1. Disability pension option. A police officer age 50 or older who is receiving a disability pension may by written application to the benefit board, elect the disability pension option if the period during which a disability pension was paid when added to the period of active service equals at least 20 years. The election shall permit the officer to continue to receive a retirement pension for the remainder of his or her life of 1/2 of the salary at the date of the retirement on disability in lieu of any amounts which would have been payable to the officer under Section 3-111.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-124) (from Ch. 108 1/2, par. 3-124)

Sec. 3-124. Refund.

(a) A police officer who is separated from police service after June 30, 1953 with less than 20 years of service is entitled to a refund upon request of all contributions made by the officer to the Fund police pension fund.

Acceptance of a refund shall bar the police officer and his or her dependents from any further participation in the benefits of this Article subject to restoration upon re-entry into service and repayment to the Fund fund of the refund together with interest at 2% per annum from the date of refund until the date of repayment.

(b) If a police officer dies with less than 10 years of police service, the officer's contributions to the police pension fund shall, upon the written request of his or her surviving spouse, be refunded to the spouse without interest. If upon the death of a police officer, there is no surviving spouse, the excess of the officer's contributions to the fund over any pension payments shall be refunded by the Fund, in accordance with the findings of the benefit board, if applicable, to his or her heirs or estate. Acceptance of this refund shall bar the police officer's dependents or estate from any further participation in the benefits provided under this Article.

(c) Beginning January 1, 2021 (the consolidation date), refunds under this Section shall be payable and repayable with respect to all of the police officer's service under this Article rather than just the service related to a particular municipality and shall be attributed to the appropriate municipal accounts and reserves.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-124.1) (from Ch. 108 1/2, par. 3-124.1)

Sec. 3-124.1. Re-entry into active service.

(a) Except as provided in subsection (d), if If a police officer who is receiving pension payments under this Article, other than as provided in Section 3-109.3, enters or re-enters active service as a police officer with any participating municipality, all of the police officer's pension payments under this Article payment shall be suspended while he or she is in service. When he or she again retires, pension payments shall be resumed. If the police officer remains in service after re-entry for a period of less than 5 years, the pension shall be the same as upon first retirement. If the officer's service after re-entry is at least 5 years and the officer makes the required contributions during the period of re-entry, his or her pension shall be recomputed by taking into account the additional period of service and salary.

(b) If a police officer who first becomes a member on or after January 1, 2019 and before January 1, 2021 is receiving pension payments (other than as provided in Section 3-109.3) and re-enters active service with any participating municipality that has established a pension fund under this Article, that police officer may continue to receive pension payments while he or she is in active service, but shall only participate in a defined contribution plan established by the municipality pursuant to Section 3-109.4 and may not establish creditable service in the Fund pension fund established by that municipality or have his or her pension recomputed.

(Source: P.A. 100-281, eff. 8-24-17.)

(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)

Sec. 3-125. Financing; tax.

(a) The governing body city council or the board of trustees of a participating the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate that on the dollar which will produce the amounts required under Section 3-125.3. an amount which, when added to the deductions from the salaries or wages of police officers, and revenues available from other sources, will equal a sum sufficient to meet the annual requirements of the police pension fund. The annual requirements to be provided by such tax levy are equal to (1) the normal cost of the pension fund for the year involved, plus (2) an amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method. The tax shall be levied and collected in the same manner as the general taxes of the municipality, and in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and shall be in addition to the amount authorized to be levied for general purposes as provided by Section 8-3-1 of the Illinois Municipal Code, approved May 29, 1961, as amended. The tax shall be forwarded directly to the treasurer of the Fund board within 30 business days after receipt by the county.

(b) (Blank). For purposes of determining the required employer contribution to a pension fund, the value of the pension fund's assets shall be equal to the actuarial value of the pension fund's assets, which shall be calculated as follows:

(1) On March 30, 2011, the actuarial value of a pension fund's assets shall be equal to the market value of the assets as of that date.

(2) In determining the actuarial value of the System's assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(c) If a participating municipality fails to transmit to the Fund fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the Fund fund may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments in accordance with any applicable rules of the Comptroller, and the Comptroller must, beginning in fiscal year 2016, deduct and remit to the Fund, for credit to the account of the municipality, fund the certified amounts or a portion of those amounts from the following proportions of payments of State funds to the municipality:

(1) in fiscal year 2016, one-third of the total amount of any payments of State funds to the municipality;

(2) in fiscal year 2017, two-thirds of the total amount of any payments of State funds to the municipality; and

(3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any payments of State funds to the municipality.

The State Comptroller may not deduct from any payments of State funds to the municipality more than the amount of delinquent payments certified to the State Comptroller by the Fund fund.

(d) (Blank). The police pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality:

(1) All moneys derived from the taxes levied hereunder;

(2) Contributions by police officers under Section 3-125.1;

(3) All moneys accumulated by the municipality under any previous legislation establishing a fund for the benefit of disabled or retired police officers;

(4) Donations, gifts or other transfers authorized by this Article.

(e) (Blank). The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2013. To the fullest extent possible, the study shall include, but not be limited to, the following:

(1) fund balances;

(2) historical employer contribution rates for each fund;

(3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund;

(4) available contribution funding sources;

(5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and

(6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds.

(Source: P.A. 99-8, eff. 7-9-15.)

(40 ILCS 5/3-125.1) (from Ch. 108 1/2, par. 3-125.1)

Sec. 3-125.1. Contributions by police officers. Each police officer shall contribute to the Fund pension fund the following percentages of salary for the periods stated: Beginning July 1, 1909 and prior to July 23, 1943, 1% (except that prior to July 1, 1921 not more than one dollar per month shall be deducted, and except that beginning July 1, 1921 and prior to July 1, 1927 not more than $2 per month shall be deducted); beginning July 23, 1943 and prior to July 20, 1949, 3%; beginning July 20, 1949 and prior to July 17, 1959, 5%; beginning July 17, 1959 and prior to July 1, 1971, 7%; beginning July 1, 1971 and prior to July 1, 1975, 7 1/2%; beginning July 1, 1975 and prior to January 1, 1987, 8 1/2%; beginning January 1, 1987 and prior to January 1, 2001, 9%; and beginning January 1, 2001, 9.91%. Such sums shall be paid or deducted monthly. Contribution to the self-managed plan shall be no less than 10% of salary.

"Salary" means the annual salary, including longevity, attached to the police officer's rank, as established by the municipality's appropriation ordinance, including any compensation for overtime which is included in the salary so established, but excluding any "overtime pay", "holiday pay", "bonus pay", "merit pay", or any other cash benefit not included in the salary so established.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-125.3 new)

Sec. 3-125.3. Contributions by participating municipalities.

(a) Each participating municipality shall make payment to the Fund as follows:

(1) municipality contributions in an amount determined by applying the municipality contribution rate to each payment of earnings paid to each of its participating police officers;

(2) an amount equal to the employee contributions provided by Section 3-125.1;

(3) all accounts receivable, together with interest charged thereon as provided in Section 3-140.4;

(4) if it has no participating police officers with current earnings, an amount payable that, over a closed period of 20 years, will amortize, at the prescribed rate for that year, any unfunded obligation, which unfunded obligation shall be computed as provided in paragraph (2) of subsection (b); and

(5) if it has a negative balance in its municipal reserve, the greater of (A) an amount payable that, over a period of 20 years, will amortize at the prescribed rate for that year any unfunded obligation, computed as provided in paragraph (2) of subsection (b), or (B) the amount required by paragraph (1) of this subsection (a).

(b) A separate municipality contribution rate shall be determined for each calendar year for all participating municipalities. The municipality contribution rate shall be the sum of the following percentages:

(1) The percentage of earnings of all the participating police officers of all participating municipalities that, if paid over the entire period of their service, will be sufficient, when combined with all employee contributions available for the payment of benefits, to provide all annuities for participating police officers, such percentage to be known as the normal cost rate.

(2) The percentage of earnings of the participating police officers of each participating municipality necessary to adjust for the difference between (i) the present value of all benefits, excluding disability and death benefits, to be provided for its participating police officers, and (ii) the sum of its accumulated municipality contributions and the accumulated employee contributions and the present value of expected future employee and municipality contributions pursuant to paragraph (1) of this subsection (b). This adjustment shall be spread over the remainder of a period determined by the Board, not to exceed 30 years.

(3) The percentage of earnings of the participating police officers of all participating municipalities necessary to provide the present value of all disability benefits granted during the most recent year for which information is available.

(4) The percentage of earnings necessary to meet any deficiency arising in the terminated municipality reserve.

(c) Computations of municipality contribution rates for the following calendar year shall be made prior to the beginning of each year, from the information available at the time the computations are made, and on the assumption that the police officers in each participating municipality at such time will continue in service until the end of such calendar year at their respective rates of earnings at such time.

(d) Each participating municipality shall make the contributions in the amounts provided in this Section in the manner prescribed from time to time by the Board, and all such contributions shall be obligations of the respective participating municipalities to this Fund. The failure to deduct any employee contributions shall not relieve the participating municipality of its obligation to this Fund. Delinquent payments of contributions due under this Section may, with interest, be recovered by civil action against the delinquent municipality. Municipality contributions, other than the amount necessary for employee contributions, for periods of service by employees from whose earnings no deductions were made for employee contributions to the Fund, may be charged to the municipal reserve for the municipality.

(40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)

Sec. 3-127. Reserves. The Board board shall establish and maintain a reserve to insure the payment of all obligations incurred under this Article excluding retirement annuities established under Section 3-109.3. The reserve to be accumulated shall be equal to the estimated total actuarial requirements of the Fund fund.

If a pension fund has a reserve of less than the accrued liabilities of the fund, the board of the pension fund, in making its annual report to the city council or board of trustees of the municipality, shall designate the amount, calculated as a level percentage of payroll, needed annually to insure the accumulation of the reserve to the level of the fund's accrued liabilities over a period of 40 years from July 1, 1993 for pension funds then in operation, or from the date of establishment in the case of a fund created thereafter, so that the necessary reserves will be attained over such a period.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-128) (from Ch. 108 1/2, par. 3-128)

Sec. 3-128. Board of Trustees and benefit boards created.

(a) Until January 1, 2021 (the consolidation date), a A board of 5 members shall constitute a board of trustees to administer the pension fund and to designate the beneficiaries thereof. The board shall be known as the "Board of Trustees of the Police Pension Fund" of the municipality.

(b) Beginning January 1, 2021, a board of 5 members shall constitute a pension benefit determination and payment board of a municipality. Two members of the benefit board shall be appointed by the mayor or president of the board of trustees of the municipality involved. The 3rd and 4th members of the benefit board shall be elected from the active Fund participants of the participating municipality pension fund by such active participants. The 5th member shall be elected by and from the Fund beneficiaries of the participating municipality.

One of the members appointed by the mayor or president of the board of trustees shall serve for one year beginning on the 2nd Tuesday in May after the municipality comes under this Article. The other appointed member shall serve for 2 years beginning on the same date. Their successors shall serve for 2 years each or until their successors are appointed and qualified.

The election for benefit board members shall be held biennially on the 3rd Monday in April, at such place or places in the municipality and under the Australian ballot system and such other regulations as shall be prescribed by the Board appointed members of the board.

The active Fund pension fund participants of the participating municipality shall be entitled to vote only for the active participant members of the benefit board of the participating municipality. All Fund beneficiaries of the participating municipality of legal age may vote only for the member chosen from among the Fund beneficiaries of the participating municipality. No person shall be entitled to cast more than one ballot at such election. The term of elected members shall be 2 years, beginning on the 2nd Tuesday of the first May after the election.

Upon the death, resignation or inability to act of any elected benefit board member, his or her successor shall be elected for the unexpired term at a special election, to be called by the benefit board and conducted in the same manner as the regular biennial election.

Members of the benefit board shall neither receive nor have any right to receive any salary from the Fund pension fund for services performed as benefit board members, but shall be reimbursed for any reasonable expenses incurred in attending meetings of the benefit board or performing duties on behalf of the Fund, and for the amount of any earnings withheld by the participating municipality because of attendance at any benefit board meeting trustees in that office.

Beginning January 1, 2021, the provisions of this subsection shall apply to the membership of the benefit board of a participating municipality, rather than the board of trustees of its pre-consolidation pension fund.

(c) On January 1, 2021, the board of trustees of each individual police pension fund is converted to the pension benefit determination and payment board of the applicable municipality. The benefit board shall operate and be administered as prescribed in this Section, Sections 3-101, 3-101.1, 3-101.2, 3-110.05, and 3-130.5, and the other applicable provisions of this Code.

The initial benefit board of each participating municipality shall be comprised of the members of the board of trustees serving on December 31, 2020. Thereafter, the board shall be comprised of members as described in subsection (b) of this Section, subject to and selected in the manner prescribed in subsections (b), (c), (d), and (e) of this Section.

(d) With respect to performing its duties under this Article, a benefit board has the powers and duties specified in this Article or delegated to it by the Board of Trustees, including those specified in 3-110.05 and 3-130.5.

In addition, the members of the boards of trustees serving on December 31, 2020 may continue to exercise the powers of that office until March 1, 2021 for the sole purpose of assisting in the consolidation of their respective pension funds, but subject to the supervision and requirements of the Transition Board.

(e) Beginning January 1, 2021, and until the Board established under subsection (f) has been elected and assumes its duties, the Transition Board established under Section 3-101.1 shall operate as the Board of Trustees of the Fund.

(f) Beginning January 1, 2022, or as soon thereafter as it is able to assume its duties, the Board of Trustees of the Downstate Police Officers Pension Fund shall consist of 8 members. The Board shall consist of representatives of various groups as follows:

(1) Four trustees shall each be a chief executive officer, chief finance officer, or other officer, executive, or department head of a participating municipality, and each such trustee shall be designated as an executive trustee.

(2) Three trustees shall each be a police officer participating in the Fund, and each such trustee shall be designated as a police officer trustee. No person shall be eligible to become a police officer trustee who does not have at least 8 years of creditable service in the Fund.

(3) One trustee shall be a retired police officer of the Fund, who shall be designated the annuitant trustee. No person shall be eligible to become an annuitant trustee who does not have at least 8 years of creditable service in the Fund. For the purposes of this Section and Section 3-128.2, a police officer receiving a disability pension shall be considered a retired police officer.

Beginning January 1, 2021, elections for executive trustees shall be conducted in accordance with Section 3-128.1 and elections for police officer and annuitant trustees shall be conducted in accordance with Section 3-128.2.

(g) An executive or police officer trustee shall be disqualified immediately upon any change in status that removes the trustee from the required employment or office within the group he or she represents. The annuitant trustee shall be disqualified upon termination or suspension of his or her retirement or disability pension.

The Board shall fill any vacancy by appointment of a person with the appropriate employment status for the period until the next election of trustees, or, if the remaining term is less than 2 years, for the remainder of the term and until a successor has been elected and has qualified.

(h) The Board shall elect annually from its members a president and a secretary.

(i) Trustees shall not receive or have any right to receive any salary from the Fund for services performed as Board members, but shall be reimbursed for any reasonable expenses incurred in attending meetings of the Board or performing duties on behalf of the Fund, and for the amount of any earnings withheld by the participating municipality because of attendance at any Board meeting.

(j) Each trustee shall be entitled to one vote on any and all actions before the Board. At least 5 concurring votes shall be necessary for every decision or action by the Board at any of its meetings. No decision or action shall become effective unless presented and so approved at a regular or duly called special meeting of the Board.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-128.1 new)

Sec. 3-128.1. Election of executive trustees.

(a) Beginning January 1, 2021, the election of executive trustees shall be conducted in accordance with this Section.

(b) During the period beginning on August 1 and ending on September 15 of each year, the Board shall accept nominations of candidates for election as executive trustees for terms beginning on the next January 1 and for vacancies to be filled by election.

All nominations for the position of executive trustee shall be by petition, signed by a representative of the governing body of at least 10 participating municipalities.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, pursuant to the rules and procedures established by the Board.

All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order upon the proper ballot. In the initial election, there shall be one election for the 4 executive trusteeships, and the 4 candidates getting the highest number of votes shall be declared elected.

(d) The governing body of each municipality participating in the Fund shall have one vote at any election in which an executive trustee is to be elected and may cast that vote for any candidate on the executive trustee ballot.

A vote may be cast for a person not on the ballot by writing in his or her name.

In case of a tie vote, the candidate employed by the municipality having the greatest number of participating police officers at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the year. The results shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each executive trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except that the initial executive trustees shall serve for terms of one, 2, 3, or 4 years, as determined by lot at the first meeting of the Board.

(40 ILCS 5/3-128.2 new)

Sec. 3-128.2. Election of police officer and annuitant trustees.

(a) Beginning January 1, 2021, the election of police officer and annuitant trustees shall be conducted in accordance with this Section. The annuitant trustee shall be elected in an election separate from the election for police officer trustees.

(b) During the period beginning on August 1 and ending on September 15 of each applicable year, the Board shall accept nominations of candidates for election as police officer or annuitant trustees for terms beginning on the next January 1, and for vacancies to be filled by election.

All nominations for the position of police officer trustee shall be by petition, signed by at least 100 active police officers participating in the Fund. All nominations for the position of annuitant trustee shall be by petition, signed by at least 50 annuitants of the Fund.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, pursuant to the rules and procedures established by the Board.

All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order on the proper ballot. In the initial election, there shall be one election for the 3 police officer trusteeships, and the 3 candidates getting the highest number of votes shall be declared elected.

(d) No person shall cast more than one vote for each candidate for whom he or she is eligible to vote. In elections for board members to be chosen from the active police officers, all active police officers and no others may vote. In elections for board members to be chosen from retired police officers, the retired police officers and no others may vote.

In case of a tie vote, the candidate currently (or in the case of an annuitant trustee, formerly) employed by the municipality having the greatest number of participating police officers at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the year. The result shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except that the initial police officer trustees shall serve for terms of one, 2, or 3 years, as determined by lot at the first meeting of the Board.

(40 ILCS 5/3-130) (from Ch. 108 1/2, par. 3-130)

Sec. 3-130. Board meetings and benefit board meetings.

(a) The benefit board shall hold annually regular quarterly meetings in July, October, January and April, and special meetings as called by the president.

At the regular July meeting, the benefit board shall select from its members a president, vice-president, secretary, and assistant secretary to serve for one year and until their respective successors are elected and qualified.

The vice-president shall perform the duties of president during any vacancy in that office, or during the president's absence from the municipality, or if he or she is by reason of illness or other causes unable to perform the duties of the office.

The assistant secretary shall act for the secretary whenever necessary to discharge the functions of such office.

At least 4 days' notice of each meeting shall be given to each member. All meetings of the benefit board shall be open to the public (although portions of meetings may be closed when necessary to preserve confidentiality as provided by law) and may be held in the offices of the benefit board or in any other place specifically designated in the notice of the meeting.

(b) The Board of the Fund shall hold regular meetings at least 4 times each year and special meetings at such other times as may be called by the executive director upon written notice of at least 3 trustees. At least 4 days' notice of each meeting shall be given to each trustee. All meetings of the Board of the Fund shall be open to the public (although portions of meetings may be closed when necessary to preserve confidentiality as provided by law) and shall be held in the offices of the Board of the Fund or in any other place specifically designated in the notice of the meeting.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-130.5 new)

Sec. 3-130.5. Benefit board powers and duties; determination of benefits; meetings.

(a) Subject to the limitations provided in this Article and the oversight and direction of the Board of Trustees, the benefit board of each participating municipality shall have the following powers and duties:

(1) The benefit board of a participating municipality shall operate as the agent of the Downstate Police Officers Pension Fund for the purposes of maintaining records necessary for determining, granting, and paying benefits under this Article arising from the employment of police officers by that municipality. The benefit board shall provide copies of those records to the Board as it may direct.

(2) The benefit board of a participating municipality shall hear and decide all applications for pensions and other benefits under this Article that are based exclusively on service with that municipality (including service credit transferred to that municipality under Section 3-110.7 and any military or other service credit arising under Section 3-110 that is not duplicative or based on service with any other municipality), and shall order and direct the payment of those pensions and other benefits.

All decisions of the benefit board relating to eligibility for or the amount of a benefit or the granting of a benefit shall be subject to oversight and review as provided in Section 3-130.8 and shall be promptly submitted to the Board in the form and manner, and with any records or documentation, that the Board may require.

(3) The benefit board of a participating municipality, acting as payment agent for the Fund, shall pay all pensions and other benefits under this Article based solely on service with that municipality (including service credit transferred to that municipality under Section 3-110.7 and any military or other service credit arising under Section 3-110 that is not duplicative or based on service with any other municipality) from an account of the Fund designated by the Board for that purpose. Such payments shall be charged to the appropriate accounts and reserves of the municipality.

(4) The benefit board of a participating municipality may pay all necessary expenses of the benefit board in the manner directed by, and subject to any restrictions or oversight imposed by, the Board of Trustees.

(5) The benefit board of a participating municipality shall be governed by and shall operate in accordance with the rules, standards, and procedures of the Fund and shall be subject to review and oversight by the Board. Any rules of the former pension fund that are in effect on December 31, 2021 shall be deemed to be repealed by operation of law on January 1, 2021 (the consolidation date).

(6) The benefit board of a participating municipality may compel witnesses to attend and testify before it upon all matters connected with carrying out the benefit board's duties under this Article, in the manner provided by law for the taking of testimony before the circuit court. The president or any member of the benefit board may administer oaths to witnesses.

(7) The benefit board of a participating municipality shall make and maintain a record of all of its meetings and proceedings.

(8) The benefit board of a participating municipality, acting as agent of the Fund, shall also have any powers or duties that may be delegated to it by the Board of Trustees.

(b) Notwithstanding subsection (a) of this Section, benefits granted on or after January 1, 2021 (the consolidation date) based on service under more than one participating municipality shall be determined and granted directly by the Board of the Fund with the cooperation and assistance of the benefit boards of the affected municipalities, rather than by those benefit boards acting individually as agents of the Fund. Such benefits shall be paid directly by the Fund rather than the individual benefit boards, unless otherwise directed by the Board, and shall be chargeable to the appropriate municipal accounts and reserves, as determined by the Board.

(40 ILCS 5/3-130.8 new)

Sec. 3-130.8. Oversight of benefit boards.

(a) The benefit board of a participating municipality shall operate as the agent of the Downstate Police Officers Pension Fund for the purposes set forth in this Article. The powers and duties of the benefit board shall be limited to matters relating to the police officers of that participating municipality.

(b) All decisions and actions of a benefit board, acting as agent of the Fund, shall be subject to oversight and review by the Fund. Such oversight may be provided directly by the Board of Trustees, or by the executive director or other officials of the Fund at the Board's direction.

(c) The Board shall establish a benefit determination review process.

(1) The review process may require a benefit board to promptly submit to the Fund for review a record of all official decisions and actions of the benefit board, in a specified form and manner and with any records or documentation that the Board may require.

(2) The review process may specify a period of time for the routine review of decisions and actions of a benefit board relating to eligibility for or the amount of a benefit or the granting of a benefit.

(3) The review process may provide for the Board to assume control of the benefit determination process in any instance in which the Board determines that the benefit board may have failed to correctly apply or implement the rules, standards, or procedures of the Fund.

(4) The review process may provide that if, by the end of the routine review period, the Fund does not determine that the benefit board may have failed to correctly apply or implement the rules, standards, or procedures of the Fund, and the Board does not assume control of the benefit determination process, then the action or determination of the benefit board shall be deemed to be approved.

(c) The Board of the Fund may adopt rules, standards, and procedures relating to the benefit determination review process and its oversight of benefit boards under this Article.

(d) The Fund and the Board may each take any action that it may deem appropriate to correct a problem that is discovered in the course of the oversight process; however, (1) mistakes in benefits encountered in the review process are subject to the requirements of Section 3-144.2, and (2) administrative review of final administrative decisions is subject to the requirements of Section 3-148.

(40 ILCS 5/3-131) (from Ch. 108 1/2, par. 3-131)

Sec. 3-131. Powers and duties of the Board of Trustees board. The Board of Trustees board shall have the powers and duties stated in Sections 3-132 through 3-140.1 in addition to the other powers and duties provided under this Article. The benefit board of a participating municipality, acting as agent of the Board of the Fund, shall perform certain duties of the Board on its behalf and subject to its oversight, as specified in this Article.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)

Sec. 3-132. To control and manage the Pension Fund. In accordance with the applicable provisions of Articles 1 and 1A and this Article, to control and manage the Downstate Police Officers Pension Fund. , exclusively, the following:

For the purpose of assisting in the creation and administration of the Downstate Police Officers Pension Fund, the Board and the Transition Board may enter into contracts or other agreements with the Board of Trustees of the Illinois Municipal Retirement Fund to provide mutual assistance or to consolidate particular services or operations, to the extent consistent with their respective fiduciary and other responsibilities.

(1) the pension fund,

(2) investment expenditures and income, including interest dividends, capital gains and other distributions on the investments, and

(3) all money donated, paid, assessed, or provided by law for the pensioning of disabled and retired police officers, their surviving spouses, minor children, and dependent parents.

All money received or collected shall be credited by the treasurer of the municipality to the account of the pension fund and held by the treasurer of the municipality subject to the order and control of the board. The treasurer of the municipality shall maintain a record of all money received, transferred, and held for the account of the board.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/3-133) (from Ch. 108 1/2, par. 3-133)

Sec. 3-133. To order payments and issue certificates. To order the payment of pensions and other benefits and to issue certificates signed by its president and secretary to the beneficiaries stating the amount and purpose of the payment; beginning January 1, 2021 (the consolidation date), however, these powers shall be delegated to and exercised by the appropriate benefit board, except with respect to (i) benefits that arise from service as a police officer under more than one participating municipality and are subject to subsection (b) of Section 3-130.5, and (ii) any instance in which the Board of Trustees rejects the determination or findings of the benefit board and assumes control of the benefit determination in the course of the benefit determination review process.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-134) (from Ch. 108 1/2, par. 3-134)

Sec. 3-134. To submit annual list of fund payments. To submit annually to each the city council or board of trustees at the close of the municipality's fiscal year, a list of persons entitled to payments from the Fund that are chargeable to the municipality's accounts and reserves from the fund, stating the amount of payments, and their purpose, as ordered by the benefit board. It shall also include items of income accrued to the municipality's accounts and reserves fund during the fiscal year. The list shall be signed by the secretary and president of the Board board, and attested under oath. A resolution or order for the payment of money shall not be valid unless approved by a majority of the board members, and signed by the president and secretary of the board.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)

Sec. 3-135. To invest funds. To invest the assets of the Fund that exceed the amount of cash required for current operations, as determined by the Board, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-113, 1-114, and 1-115 of this Code.

No bank or savings and loan association shall receive investment funds this Section unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in that Section 6 shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

The Board may sell any security belonging to the Fund at any time when, in its judgment, it is necessary or desirable to do so.

The Board shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction.

All investments shall be clearly held and accounted for to indicate ownership by the Board. The Board may direct the registration of securities or the holding of interests in real property in its own name or in the name of a nominee created for the express purpose of registration of securities or the holding of interests in real property by a savings and loan association or national or State bank or trust company authorized to conduct a trust business in the State of Illinois. The Board may hold title to interests in real property in the name of the Fund or in the name of a title holding corporation created for the express purpose of holding title to interests in real property.

Investments shall be carried at cost or at a book value in accordance with generally accepted accounting principles and accounting procedures approved by the Board.

The book value of investments held by any pension fund or retirement system in one or more commingled investment accounts shall be the cost of its units of participation in such commingled account or accounts as recorded on the books of the Board. Beginning January 1, 1998, the board shall invest funds in accordance with Sections 1-113.1 through 1-113.10 of this Code.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/3-138.1 new)

Sec. 3-138.1. To authorize municipality contribution rates and adopt actuarial tables and establish prescribed rates of interest. To authorize municipality contribution rates and adopt actuarial tables and establish prescribed rates of interest.

(40 ILCS 5/3-138.2 new)

Sec. 3-138.2. To establish offices. To establish an office or offices with suitable space for meetings of the Board and for the use of the necessary administrative personnel. All books and records of the Fund shall be kept in such office or offices or in such other places as the Board shall designate for safekeeping.

(40 ILCS 5/3-138.3 new)

Sec. 3-138.3. To appoint an executive director. To appoint an executive director to manage the office and carry out the technical and administrative duties of the Fund.

(40 ILCS 5/3-138.4 new)

Sec. 3-138.4. To appoint an actuary. To appoint an actuary to perform all the necessary actuarial requirements of the Fund.

(40 ILCS 5/3-138.5 new)

Sec. 3-138.5. To obtain additional services. To obtain by employment or by contract such additional actuarial services and such legal, medical, clerical, or other services as are required for the efficient administration of the Fund.

(40 ILCS 5/3-138.6 new)

Sec. 3-138.6. To fix the compensation of employees. To determine and fix the rate of compensation to be paid to the executive director, actuary, auditor, legal or medical counsel, and employees of the Fund.

(40 ILCS 5/3-138.7 new)

Sec. 3-138.7. To have accounts audited. To have the accounts of the Fund audited annually by a certified public accountant approved by the Auditor General.

(40 ILCS 5/3-138.8 new)

Sec. 3-138.8. To establish and maintain a revolving account. To establish and maintain a revolving account in a bank or savings and loan association approved by the State Treasurer as a State depositary and having capital funds, represented by capital, surplus, and undivided profits, of at least $5,000,000, for the purpose of making payments of benefits and administrative expenses. All funds deposited into that account shall be held in the name of the Fund and shall be withdrawn only by a check or draft signed by the president of the Board or the executive director, as the Board may direct, or by the president and treasurer of a benefit board, acting as payment agent for the Fund, in the case of a benefit or administrative expense payable by that benefit board.

In case the person whose signature appears upon a check or draft ceases to hold office after attaching his or her signature but before the delivery thereof to the payee, the signature nevertheless shall be valid and sufficient for all purposes with the same effect as if he or she had remained in office until delivery thereof.

The revolving account shall be created by resolution of the Board. The moneys in the revolving account shall be held and expenditures shall be made by the Fund for the purposes set forth in this Section. The Fund shall reimburse the revolving account for expenditures for such purposes.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in that Section 6 shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

(40 ILCS 5/3-138.9 new)

Sec. 3-138.9. To keep data. To keep in convenient form, determined by the Board of the Fund, the data necessary for all required calculations and valuations as required by the actuary.

(40 ILCS 5/3-138.10 new)

Sec. 3-138.10. To reproduce records. To have any records kept by the Board or a benefit board photographed, microfilmed, or otherwise reproduced on film or in digital format. The reproductions shall be deemed original records and documents for all purposes, including introduction in evidence before all courts and administrative agencies.

(40 ILCS 5/3-140) (from Ch. 108 1/2, par. 3-140)

Sec. 3-140. To make rules. To make necessary rules and regulations in conformity with the provisions of this Article, and to publish and transmit copies from time to time to all benefit boards, pensioners, and contributors.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-140.2 new)

Sec. 3-140.2. Custodian. The Board shall appoint one or more custodians to receive and hold the assets of the Fund on such terms as the Board may agree.

The custodian of the Fund shall secure and safely keep the Fund's assets, subject to the control and direction of the Board. The custodian shall keep books and accounts concerning the Fund in such manner as may be prescribed by the Board. The books and accounts shall be subject to the inspection of the Board or any member thereof.

(40 ILCS 5/3-140.3 new)

Sec. 3-140.3. Deposit and disposition of funds.

(a) All money received by the Board shall immediately be deposited with the custodian for the account of the Fund. All payments from the accounts of the Fund shall be made by the custodian only, and only by a check or draft signed by the president of the Board or the executive director, as the board may direct. Such checks and drafts shall be drawn only upon proper authorization by the Board, as properly recorded in the official minute books of the meetings of the Board.

(b) In the course of consolidation, all securities of the Fund when received shall be deposited with the custodian, whom shall hold and account for them as required by the Board and provided by law.

(c) The assets of the Fund shall be invested as one fund, and no particular person or municipality shall have any right in any specific security or in any item of cash other than an undivided interest in the whole.

(d) If a participating municipality terminates participation because it fails to meet the requirements of Section 3-103, it shall pay to the Fund the amount equal to any net debit balance in its municipal account and any account receivable. Its successors, assigns, and transferees of its assets shall be obligated to make this payment to the extent of the value of assets transferred to them. The Fund shall pay an amount equal to any net credit balance to the participating municipality or its successors or assigns. Any remaining net debit or credit balance not collectible or payable shall be transferred to a terminated municipality reserve. The Fund shall pay to each police officer of the participating municipality an amount equal to his or her credits in the employee reserves. The employees shall have no further rights to any benefits from the Fund, except that annuities awarded prior to the date of termination shall continue to be paid.

(40 ILCS 5/3-140.4 new)

Sec. 3-140.4. Earnings and interest.

(a) Balances at the beginning of each year that remain in employee reserves at the end of the year shall be credited with interest annually at the prescribed rate.

(b) Municipal reserves shall be charged or credited, as the case may be, with interest at the prescribed rate applied to the balance therein at the beginning of the year.

(c) Municipal accounts receivable shall be charged with interest at a rate of 1% per month on the balance therein unpaid one month or more. The unpaid balance shall include charges established retroactively because of failure of the municipality to report amounts that should be receivable. Credit balances shall be disregarded in this calculation.

(d) The annuity and disability benefit reserves shall be credited with interest at the prescribed rate at the end of each year. For purposes of this computation, the prescribed rate shall be applied to the balances therein at the beginning of the year.

(e) Amounts credited or charged under subsection (a), (b), (c), or (d) of this Section shall be charged or credited to the earnings and experience variation reserve. Any remaining balance shall be transferred to the municipal reserves in proportion to present values of the annuities of the annuitants of each participating municipality plus the balance in their municipal reserve.

(f) The Board shall fix the rate of interest to be charged on back or reinstatement contributions.

(40 ILCS 5/3-140.5 new)

Sec. 3-140.5. Authorizations.

(a) Each participating municipality shall:

(1) deduct all normal and additional contributions from each payment of earnings payable to each participating police officer who is entitled to any earnings from the municipality, and remit all normal and additional contributions immediately to the Board; and

(2) pay to the Board all contributions required by this Article.

(b) Each participating police officer shall, by virtue of the payment of contributions to this Fund, receive a vested interest in the benefits provided in this Article and in consideration of such vested interest shall be deemed to have agreed to and authorized the deduction from earnings of all contributions payable to this Fund in accordance with this Article.

(c) Payment of earnings less the amount of contributions provided in this Article shall be a full and complete discharge of all claims for payment for services rendered by a police officer during the period covered by such payment.

(40 ILCS 5/3-140.6 new)

Sec. 3-140.6. Executive director. The executive director shall be in charge of the general administration of the Fund and shall have such special powers and duties as may be properly delegated or assigned by the Board from time to time.

The executive director's general administrative duties shall include: the computation of the amounts of benefits, service credits, and contributions required for reinstatement of credits for Board consideration; the processing of approved benefit claims and expenses of administration for payment; the placing of any and all matters before the Board that require action or are in the interest of the Board or the Fund; the preparation and maintenance of necessary and proper records for administrative and actuarial purposes; the conduct of any necessary or desirable communications in the course of the operations of the Fund; and the carrying out of any actions of the Board that are so delegated.

With respect to any of these general duties that are delegated to benefit boards as agents of the Fund, the executive director's duty shall include providing direction and oversight to the benefit boards, evaluating their performance, and informing the Board of matters of interest or concern that may arise with respect to the operation or circumstances of any benefit board.

(40 ILCS 5/3-140.7 new)

Sec. 3-140.7. Actuary.

(a) The actuary shall be the technical advisor of the Board. In addition to general advice, the actuary shall specifically be responsible for and shall make a general investigation, at least once every 3 years, of the experience of the participating municipalities as to mortality, disability, retirement, separation, marital status of employees, marriage of surviving spouses, interest, and employee earnings rates, and to make recommendations as a result of any such investigation as to:

(1) the actuarial tables to be used for computing annuities and benefits and for determining the premiums for disability and death benefit purposes;

(2) the tables to be used in any regular actuarial valuations; and

(3) the prescribed rate of interest.

(b) The actuary shall make the computations of municipality obligations and contribution rates (including annual valuations of the liabilities and reserves for present and prospective annuities and benefits) and shall certify to the correctness thereof.

(c) The actuary shall advise the Board on any matters of an actuarial nature affecting the Fund.

(40 ILCS 5/3-140.8 new)

Sec. 3-140.8. Payment to the Fund by a municipality. The mayor or president of the board of trustees and clerk, secretary, or the comptroller, if applicable, and the officer or officers of the municipality who are authorized by law to draw warrants upon the treasurer of the municipality, upon request made in writing by the Board, shall draw such warrants, payable to the Fund, for all funds in the hands of the municipality's treasurer belonging to the Fund.

(40 ILCS 5/3-140.9 new)

Sec. 3-140.9. Disbursements by benefit boards. Disbursements from the Fund for payment of benefits or administrative expenses may be made by a benefit board, in its capacity as payment agent for the Fund, only by check or draft drawn upon the specific revolving account established by the Board for that purpose. Each such check or draft shall be signed by the president of the board and countersigned by its secretary. No such check or draft shall be drawn except by order of the benefit board duly entered in the records of the benefit board's proceedings.

(40 ILCS 5/3-140.10 new)

Sec. 3-140.10. Interest on deposits. If any moneys of the pension fund, by order of the Board or otherwise, are deposited in any bank or savings and loan association, or is loaned, all interest or money that is paid or agreed to be paid on the loan or deposit shall become a part of the fund. No such loan or deposit shall be made without Board authorization. No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act.

(40 ILCS 5/3-141) (from Ch. 108 1/2, par. 3-141)

Sec. 3-141. Annual report by treasurer. On the 2nd Tuesday in May annually through 2021, the treasurer of the municipality and all other officials of the municipality who had the custody of any pension funds herein provided, shall make a sworn statement to the pension board, and to the mayor and council or president and board of trustees of the municipality, of all moneys received and paid out by them on account of the pension fund during the year, and of the amount of funds then on hand and owing to the pension fund. The final report required under this subsection shall be due in May of 2021 and shall include the period up to and including the consolidation of the municipality's pension fund into the Downstate Police Officers Pension Fund. All surplus then remaining with any official other than the treasurer shall be paid to the treasurer of the municipality or as directed by the Board. Upon demand of the Board pension board, any official shall furnish a statement relative to the official method of collection or handling of the pension funds. All books and records of that official shall be produced at any time by him for examination and inspection by the Board board.

(Source: P.A. 83-1440.)

(40 ILCS 5/3-141.1)

Sec. 3-141.1. Award of benefits. Prior to the benefit board's determination of benefits, the benefit board shall provide, in writing, the total amount of the annuity for a member and all information used in the calculation of that benefit to the Board of the Fund Treasurer of the municipality. If the Treasurer is of the opinion that the calculated annuity is incorrect, the Treasurer shall immediately notify the board. The board shall review the Treasurer's findings, and if the Board concurs that an error exists it shall re-determine the annuity so that it is calculated in accordance with the Illinois Pension Code.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/3-143) (from Ch. 108 1/2, par. 3-143)

Sec. 3-143. Report by the Board of the Fund pension board.

(a) The Board pension board shall report annually to the governing body of each participating city council or board of trustees of the municipality on the condition of the Fund pension fund at the end of its most recently completed fiscal year. The report shall be made prior to the council or board meeting held for the levying of taxes for the year for which the report is made.

The report pension board shall certify and provide the following information to the city council or board of trustees of the municipality:

(1) the total assets of the Fund fund in its custody at the end of the fiscal year and the current market value of those assets;

(2) the estimated receipts during the next succeeding fiscal year from deductions from the salaries of police officers, and from all other sources;

(3) the estimated amount required during the next succeeding fiscal year to (a) pay all pensions and other obligations provided in this Article, and (b) to meet the annual requirements of the fund as provided in Section 3-125.3 Sections 3-125 and 3-127;

(4) the total net income received from investment of assets along with the assumed investment return and actual investment return received by the Fund fund during its most recently completed fiscal year compared to the total net income, assumed investment return, and actual investment return received during the preceding fiscal year;

(5) the total number of active employees who are financially contributing to the Fund fund;

(6) the total amount that was disbursed in benefits during the fiscal year, including the number of and total amount disbursed to (i) annuitants in receipt of a regular retirement pension, (ii) recipients being paid a disability pension, and (iii) survivors and children in receipt of benefits;

(7) the funded ratio of the Fund fund; and

(8) the unfunded liability carried by the Fund fund, along with an actuarial explanation of the unfunded liability. ; and

(9) the investment policy of the pension board under the statutory investment restrictions imposed on the fund.

Before the Board pension board makes its report, the Fund municipality shall have the assets of the Fund fund and their current market value verified by an independent certified public accountant of its choice.

(b) A participating The municipality is authorized to publish the report submitted under this Section. This publication may be made, without limitation, by publication in a local newspaper of general circulation in the municipality or by publication on the municipality's Internet website. If the municipality publishes the report, then that publication must include all of the information relating to that municipality submitted by the pension board under subsection (a).

(Source: P.A. 95-950, eff. 8-29-08; revised 11-8-17.)

(40 ILCS 5/3-144.2) (from Ch. 108 1/2, par. 3-144.2)

Sec. 3-144.2. Mistake in benefit.

(a) If the Fund commits a mistake by setting any benefit at an incorrect amount, it shall adjust the benefit to the correct level as soon as may be practicable after the mistake is discovered. The term "mistake" includes a clerical or administrative error executed by the Fund (or by a benefit board acting as agent of the Fund or by a former police pension fund that has been consolidated into the Fund) or by the participant as it relates to a benefit under this Article; however, in no case shall "mistake" include any benefit as it relates to the reasonable calculation of the benefit or aspects of the benefit based on salary, service credit, calculation or determination of a disability, date of retirement, or other factors significant to the calculation of the benefit that were reasonably understood or agreed to by the Fund (or by a benefit board acting as agent of the Fund or by a former police pension fund that has been consolidated into the Fund) at the time of retirement.

(b) If the benefit was mistakenly set too low, the Fund shall make a lump sum payment to the recipient of an amount equal to the difference between the benefits that should have been paid and those actually paid, plus interest at the rate prescribed by the Public Pension Division of the Department of Insurance from the date the unpaid amounts accrued to the date of payment.

(c) If the benefit was mistakenly set too high, the Fund may recover the amount overpaid from the recipient thereof, either directly or by deducting such amount from the remaining benefits payable to the recipient as is indicated by the recipient. If the overpayment is recovered by deductions from the remaining benefits payable to the recipient, the monthly deduction shall not exceed 10% of the corrected monthly benefit unless otherwise indicated by the recipient.

However, if (i) the amount of the benefit was mistakenly set too high, and (ii) the error was undiscovered for 3 years or longer, and (iii) the error was not the result of fraud committed by the affected participant or beneficiary, then upon discovery of the mistake the benefit shall be adjusted to the correct level, but the recipient of the benefit need not repay to the Fund the excess amounts received in error.

(d) Adjustments and repayments of benefit mistakes shall be charged or credited to the appropriate municipal accounts and reserves.

(Source: P.A. 98-1117, eff. 8-26-14.)

(40 ILCS 5/3-144.5)

Sec. 3-144.5. Fraud. Any person, member, trustee, or employee of the Board or a benefit board who knowingly makes any false statement or falsifies or permits to be falsified any record of a fund in any attempt to defraud such fund as a result of such act, or intentionally or knowingly defrauds a fund in any manner, is guilty of a Class A misdemeanor.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/3-144.6)

Sec. 3-144.6. Dissolution and reestablishment of inactive police pension funds. The corporate authorities of a municipality the participates in the Fund for which a pension fund has been established under this Article may, by resolution or ordinance, cease participating in the Fund dissolve the fund if an independent auditor has certified to the Board and the corporate authorities that the municipality fund has no liabilities to the Fund and no , participants, or beneficiaries entitled to benefits. The corporate , and the authorities shall reestablish the municipality's participation in the Fund the fund if a police officer of the municipality seeks to establish service credit in the Fund fund or if reestablishment of participation in the Fund the fund is required upon a former police officer's reinstatement of creditable service under subsection (b) of Section 3-110.7 of this Code.

The Board of the Fund Public Pension Division of the Department of Insurance shall adopt rules regarding the process and procedures for (i) ending participation in the Fund dissolving a pension fund under this Section and (ii) redistributing assets and reestablishing participation in the Fund when the fund if reestablishment of the fund is necessary. Rules adopted under this subsection do not apply to the consolidation of pension funds pursuant to this amendatory Act of the 100th General Assembly.

(Source: P.A. 97-99, eff. 1-1-12.)

(40 ILCS 5/3-144.7 new)

Sec. 3-144.7. Municipal succession upon termination; new participating municipalities.

(a) This Section does not apply to the consolidation into this Fund of the existing police pension funds under this Article on January 1, 2021.

(b) A participating municipality that succeeds to the functions of another participating municipality that is dissolved or terminates its existence shall assume the net accumulation balance in the municipal reserve and the municipal account receivable balance of the terminated municipality.

(c) The following described municipalities, but not including any with more than 500,000 inhabitants, shall be included within and be subject to this Article beginning upon the effective dates specified by the Board:

(1) In the case of a municipality that did not have a police pension fund under this Article on December 31, 2020 and is required to participate in this Fund by virtue of having any full-time paid police officers and reaching the population specified in Section 3-103, the Board shall notify the municipality, within 90 days after publication of the applicable census, that it has become subject to this Article and shall provide information to the corporate authorities of the municipality explaining the duties and consequences of participation. The notification shall also include a proposed date upon which participation by the municipality will commence.

(2) In the case of a municipality that did not have a police pension fund under this Article on December 31, 2020 and whose electors have chosen to be included under this Article by referendum under Section 3-145, the clerk of the municipality or other appropriate official of its governing body shall promptly notify the Board of that action and provide the Board with a copy of the proposition adopted by referendum, duly authenticated and certified.

(d) A municipality that did not have a police pension fund under this Article on December 31, 2020 and is about to begin participation shall submit to the Board an application to participate, in a form acceptable to the Board, not later than 90 days prior to the proposed effective date of participation. The Board shall act upon the application within 90 days, and if it finds that the application is in conformity with its requirements and the requirements of this Article, participation by the applicant shall commence on a date acceptable to the municipality and specified by the Board, but in no event later than one year after the date of application.

(e) Each prospective participating municipality shall pay to the Fund the cost, as determined by the Board, of a study prepared by the Fund or its actuary detailing the prospective costs of participation in the Fund to be expected by the municipality.

(40 ILCS 5/3-144.8 new)

Sec. 3-144.8. Authorized agent of a participating municipality.

(a) Each participating municipality shall appoint an authorized agent who shall have the powers and duties set forth in this Section. In the absence of such an appointment, the duties of the authorized agent shall devolve upon the clerk or secretary of the municipality.

(b) The authorized agent of the municipality shall have the following powers and duties:

(1) To certify to the Fund and to the benefit board of the municipality whether or not a given person is authorized to participate in the Fund.

(2) To certify to the Fund and to the benefit board of the municipality when a participating employee is on a leave of absence authorized by the municipality.

(3) To request the proper officer to cause employee contributions to be withheld from salary and promptly transmitted to the Fund.

(4) To request the proper officer to cause municipality contributions to be promptly forwarded to the Fund.

(5) To forward promptly to all participating employees any communications for such employees from the Fund, the municipality, or the benefit board of the municipality.

(6) To forward promptly to the benefit board of the municipality all applications, claims reports, and other communications delivered to the agent by participating employees.

(7) To perform all duties related to the administration of the Fund as requested by the Fund, the benefit board of the municipality, or the governing body of the municipality.

(c) The governing body of each participating municipality may delegate either or both of the following powers to its authorized agent:

(1) To file a petition for nomination of an executive trustee of the Fund.

(2) To cast the ballot for election of an executive trustee of the Fund.

If a governing body does not authorize its agent to perform the powers set forth in this subsection (c), they shall be performed by the governing body itself, unless the governing body by resolution duly certified to the Fund delegates them to some other officer or employee.

(d) The delivery of any communication or document by an employee or a municipality to the authorized agent of the municipality does not constitute delivery to the Fund.

(40 ILCS 5/3-145) (from Ch. 108 1/2, par. 3-145)

Sec. 3-145. Referendum in municipalities less than 5,000.

(a) This Article shall not be effective in any municipality having a population of less than 5,000 unless the proposition to adopt the Article is submitted to and approved by the voters of the municipality in the manner herein provided.

Whenever the electors of the municipality, equal in number to 5% of the number of legal votes cast at the last preceding general municipal election, petition the city, village or town clerk to submit the proposition whether that municipality shall adopt this Article, the officer to whom the petition is addressed shall certify the proposition to the proper election officials who shall submit the proposition in accordance with the general election law at a regular election in the municipality provided that notice of the referendum, if held before July 1, 1999, has been given in accordance with the provisions of Section 12-5 of the Election Code in effect at the time of the bond referendum, at least 10 and not more than 45 days before the date of the election, notwithstanding the time for publication otherwise imposed by Section 12-5. Notices required in connection with the submission of public questions on or after July 1, 1999 shall be as set forth in Section 12-5 of the Election Code. If the proposition is not adopted at that election, it may be submitted in like manner at any regular election thereafter. The proposition shall be substantially in the following form:

-------------------------------------------------------------

Shall the city (or village or incorporated town) of.... adopt YES Article 3 of the "Illinois Pension -----------------------

Code", providing for participation in the Downstate Police Officers Pension Fund pertaining to the creation NO of a police pension fund?

-------------------------------------------------------------

If a majority of the votes cast on the proposition is for the proposition, this Article is adopted in that municipality.

(b) For a period of 60 days after the effective date of this amendatory Act of the 96th General Assembly, if a municipality having a population of less than 5,000 has adopted this Article in accordance with the provisions of subsection (a), the municipality may elect to terminate participation under this Article if all of the following conditions are met:

(1) An independent auditor certifies that the fund created under this Article has no liabilities and there are no members or participants in the fund and no beneficiaries entitled to benefits under the fund.

(2) The corporate authorities of the municipality, by ordinance, approve the closing of the fund.

If the conditions of this subsection (b) are met and the closed fund contains assets, those assets shall be transferred to the municipality for its general corporate purposes.

If a municipality that terminates participation under this Article in accordance with this subsection (b) wants to reinstate the fund, then the proposition to re-adopt the Article must be submitted to and approved by the voters of the municipality in the manner provided in subsection (a).

(c) The consolidation of police pension funds under this Article and the changes to this Section made by this amendatory Act of the 100th General Assembly do not invalidate any previous referendum under this Section. Every such referendum adopted before January 1, 2021 that provides for the creation of a pension fund under this Article shall be deemed to also authorize participation in the Downstate Police Officers Pension Fund created under this Article.

(Source: P.A. 96-216, eff. 8-10-09.)

(40 ILCS 5/3-146.05 new)

Sec. 3-146.05. Accounts. An adequate system of accounts shall be kept in accordance with generally accepted accounting and sound actuarial principles. The accounts and reserves designated in Sections 3-146.1 through 3-146.6, inclusive, shall be maintained.

(40 ILCS 5/3-146.1 new)

Sec. 3-146.1. Employee reserves. Separate reserves shall be maintained for each participating employee in such detail as is necessary to administer all benefits provided in this Article, and to segregate accurately the separate liabilities of each participating municipality with respect to each participating employee.

(40 ILCS 5/3-146.2 new)

Sec. 3-146.2. Municipal reserves.

(a) Except as provided in subsection (b) of this Section, each participating municipality shall be treated as an independent unit within the Fund. Separate municipal reserves shall be maintained in such form and detail as is necessary to show the net accumulated balances of each municipality created or arising under this Article.

(b) In the event that a participating municipality is terminated and its obligations are not assumed or transferred by law to another municipality, any net debit or credit balance remaining in the reserve account of such municipality shall be transferred to a terminated municipality reserve, which shall be used to fund any future benefits of its employees arising out of service with the terminated municipality.

Any deficiency arising in the terminated municipality reserve shall be eliminated by a contribution by all remaining municipalities at a uniform percent of payroll, to be determined by the Board and collected with other contributions required under Section 3-125.3.

(40 ILCS 5/3-146.3 new)

Sec. 3-146.3. Reserves for annuities.

(a) Appropriate reserves shall be created for payment of all annuities granted under this Article at the time such annuities are granted and in amounts determined to be necessary under actuarial tables adopted by the Board upon recommendation of the actuary of the Fund. All annuities payable shall be charged to the annuity reserve.

(b) Amounts credited to annuity reserves shall be derived by transfer of all the employee credits from the appropriate employee reserves and by charges to the municipal reserve of those municipalities in which the retiring employee has accumulated service. If a retiring employee has accumulated service in more than one participating municipality, the municipality charges for non-concurrent service shall be calculated as follows:

(1) for purposes of calculating the annuity reserve, an annuity shall be calculated based on service and adjusted earnings with each employer; and

(2) the difference between the municipality charges for the actual annuity granted and the aggregation of the municipality charges based upon the ratio of each from those calculations to the aggregated total from paragraph (1).

Aggregate municipality charges for concurrent service shall be prorated based on the employee's earnings.

(c) Supplemental annuity, if any, shall be handled as a separate annuity and amounts to be credited to the annuity reserve shall be derived in the same manner as a regular annuity.

(d) When a retirement annuity is granted to an employee with a spouse eligible for a surviving spouse annuity, there shall be credited to the annuity reserve an amount to fund the cost of both the retirement and surviving spouse annuity as a joint and survivors annuity.

(e) All annuity reserves shall be revalued annually as of December 31. Any adjustment required in the annuity reserve by such revaluation shall be charged or credited to the earnings and experience variation reserve.

(f) The excess in the annuity reserve shall be transferred to the municipal reserves. An amount equal to the deficiency in the reserve of participating municipalities that have no participating employees shall be allocated to their reserves. The remainder shall be allocated in amounts proportionate to the present value of annuities of annuitants of the remaining participating municipalities.

(40 ILCS 5/3-146.4 new)

Sec. 3-146.4. Reserves for disability benefits. A disability benefit reserve shall be created for payment of all disability benefits.

(1) Amounts to fund the cost of total and permanent disability benefits shall be established at the time such benefits are granted under actuarial tables adopted by the Board upon recommendation of the actuary of the Fund. All total and permanent disability benefits payable shall be charged to this reserved amount.

(2) Temporary disability benefit payments shall be charged to the disability benefit reserve when made.

(3) Amounts credited to the disability benefit reserve shall be derived from municipality contributions made pursuant to paragraph (3) of subsection (b) of Section 3-125.3.

(4) The disability benefit reserve shall be revalued annually as of December 31. Any adjustment required in the disability benefit reserve by such revaluation shall be charged or credited to the earnings and experience variation reserve.

(40 ILCS 5/3-146.5 new)

Sec. 3-146.5. Reserve for Variation in Benefit Payments.

(a) A Reserve for Variation in Benefit Payments may be established.

(b) Credits to the Reserve shall consist of:

(1) Any employee contributions, not in excess of $10, received by the Fund subsequent to claim for and payment of a separation refund; provided, however, that upon request of any employee rightfully entitled thereto, the aforesaid amount shall be paid to the employee from this Reserve.

(2) Any benefit checks or warrants issued and outstanding more than 2 years.

(3) Any balances in employee or municipal reserves that are not properly creditable to those reserves.

(c) Charges to the Reserve shall consist of:

(1) Benefit claims properly payable under this Article, the reserves for which have been previously transferred to this reserve or for which no reserves exist.

(2) Benefit overpayments deemed uncollectible by the Board.

(3) Amounts required to adjust employee or municipal reserves to the correct balance.

(40 ILCS 5/3-146.6 new)

Sec. 3-146.6. Earnings and experience variation reserve. One earnings and experience variation reserve shall be maintained. Moneys in abolished reserve accounts shall be transferred to the earnings and experience variation reserve. Excess or deficiencies in the annuity and disability benefit reserves shall be charged or credited to this reserve. Whenever a balance exists in this reserve, it shall be included in the basis used for determining the prescribed interest rate. The balance in the reserve shall be distributed as of the end of each year, but a contingency balance of not more than twice the projected interest requirement for the next year may be maintained. If the balance ever exceeds twice the projected requirement, the excess shall be distributed to municipal reserves.

If the Board determines that the funds available in this reserve, after required transfers, will not be sufficient to provide administrative expenses of the Fund, the Board may include in the municipality contribution rate authorized by Section 3-125.3 a percentage of earnings on the earnings of all participating employees to provide an amount required for the administrative expenses.

Upon adoption of generally accepted accounting procedures that allow for the recognition of unrealized gains or losses in market value, those gains or losses shall be allocated to employer accounts, including the earnings and experience variation reserve, in the same proportion those accounts were to total assets prior to the implementation of market value accounting.

(40 ILCS 5/3-148) (from Ch. 108 1/2, par. 3-148)

Sec. 3-148. Administrative review.

(a) Except as it relates to any time limitation to correct a mistake as provided in Section 3-144.2, the provisions of the Administrative Review Law, and all amendments and modifications thereof and the rules adopted pursuant thereto, shall apply to and govern all proceedings for the judicial review of final administrative decisions of the Board, of a benefit board acting as agent of the Fund, or of a former pension fund that has been consolidated into the Fund, as retirement board provided for under this Article.

(b) The term "administrative decision" is as defined in Section 3-101 of the Code of Civil Procedure. For purposes of administrative review, "final administrative decision" refers to:

(1) the final administrative decision of the benefit board in the case of a benefit that arises from service as a police officer under only one participating municipality, unless the Board of Trustees rejects the benefit determination or findings of the benefit board and assumes control of the benefit determination in the course of the benefit determination review process;

(2) the final administrative decision of the Board of Trustees, in the case of (i) a benefit that arises from service as a police officer under more than one participating municipality and is subject to subsection (b) of Section 3-130.5, or (ii) any instance in which the Board of Trustees rejects the benefit determination or findings of the benefit board and assumes control of the benefit determination in the course of the benefit determination review process; or

(3) the final administrative decision of the board of a former pension fund that has been consolidated into the Fund, in the case of a decision that occurred before January 1, 2021 (the consolidation date).

(Source: P.A. 98-1117, eff. 8-26-14.)

(40 ILCS 5/3-150) (from Ch. 108 1/2, par. 3-150)

Sec. 3-150. Applicability of home rule powers. A home rule unit, as defined in Article VII of the 1970 Illinois Constitution or any amendment thereto, shall have no power to change, alter, or amend in any way the provisions of this Article. A home rule unit which is a municipality, as defined in Section 3-103, shall not provide for, singly or as a part of any plan or program, by any means whatsoever, any type of retirement or annuity benefit to a police officer other than through the Downstate Police Officers Pension Fund establishment of a fund as provided in this Article or the defined contribution plan under Section 3-109.4.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-102.1 new)

Sec. 4-102.1. Fund. "Fund" or "pension fund":

Until January 1, 2021, a firefighters' pension fund established by a municipality under this Article.

Beginning January 1, 2021, "Fund" or "pension fund" means the Downstate Firefighters Pension Fund created under this Article to consolidate all of the individual pension funds previously established under this Article; depending on the context, the terms may include one or more of those previously established pension funds.

(40 ILCS 5/4-103) (from Ch. 108 1/2, par. 4-103)

Sec. 4-103. Municipality. "Municipality": (1) Any city, township, village or incorporated town of 5,000 or more but less than 500,000 inhabitants, and any fire protection district having any full-time paid firefighters, and (2) any city, village, incorporated town or township of less than 5,000 inhabitants having a full-time paid fire department which adopts the provisions of this Article article pursuant to the provisions of Section 4-141.

The term "participating municipality" means a municipality that both is required (or has elected) to and does in fact participate in the Downstate Firefighters Pension Fund under this Article.

The term "governing body", "city council", or "board of trustees" includes the board of trustees of a fire protection district and the township board of town trustees or other persons empowered to draft the tentative budget and appropriation ordinance and the electors of such a township acting at the annual or special meeting of town electors.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-104.5 new)

Sec. 4-104.5. Prescribed rate of interest. "Prescribed rate of interest": The rate of interest to be used for calculation of the rates of municipality contributions and the amounts of annuities and benefits, as determined by the Board in consultation with the actuary on the basis of the probable effective rate of interest on a long-term basis. The prescribed rate shall also be used to distribute, to the extent reasonably determinable prior to the year for which the rate is applicable, the current earnings (excluding capital gains) on assets of the Fund to reserves as provided by Section 4-130.2, after due allowance is made for special reserve requirements under Section 4-136.6.

(40 ILCS 5/4-104.9 new)

Sec. 4-104.9. Benefit board. "Pension benefit determination and payment board" or "benefit board": The pension benefit determination and payment board of a municipality as established under subsection (b) of Section 4-121; depending on the context, the term may include the former board of trustees of the firefighters' pension fund of the municipality.

(40 ILCS 5/4-105) (from Ch. 108 1/2, par. 4-105)

Sec. 4-105. Board. "Board":

Until January 1, 2021, the The "Board of Trustees of the Firefighters' Pension Fund" of a municipality as established in subsection (a) of Section 4-121.

Beginning January 1, 2021, the Board of Trustees of the Downstate Firefighters Pension Fund created under this Article to consolidate all of the individual pension funds previously established under this Article, as established in subsection (d) of Section 4-121, or, until that board is established and has assumed its duties, the Transition Board created under Section 4-101.1; depending on the context, the term may include the former board of trustees of one or more of those previously established pension funds.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-105c)

Sec. 4-105c. Participant. "Participant": A firefighter or deferred pensioner of the Fund a pension fund, or a beneficiary of the Fund pension fund.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/4-105d)

Sec. 4-105d. Beneficiary. "Beneficiary": A person receiving benefits from the Fund a pension fund, including, but not limited to, retired pensioners, disabled pensioners, their surviving spouses, minor children, disabled children, and dependent parents.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/4-106.1) (from Ch. 108 1/2, par. 4-106.1)

Sec. 4-106.1. Discontinuation of fire protection district; annexation to fire protection district; dissolution and reestablishment of participation inactive firefighters' pension funds.

(a) Whenever a fire protection district that participates in the Fund which has established a pension fund under this Article is discontinued under the Fire Protection District Act, and the municipality assuming the obligations of the district is required to and does participate in the has established a Firefighters' Pension Fund under this Article, the accounts assets of the fund established by the district shall be transferred to the accounts Board of Trustees of the Firefighters' Pension Fund of the municipality. The Firefighters' Pension Fund of the municipality shall assume all accrued liabilities of the district relating to the Fund district's pension fund, and all accrued rights, benefits and future expectancies of the affected members, retired employees, and beneficiaries of the district's fund shall remain unimpaired.

(b) If a municipality that participates in the Fund discontinues its municipal fire department for which a pension fund has been established under this Article is discontinued and the affected territory is annexed by a fire protection district, and the fire protection district is required to and does participate in the Fund has established a firefighters' pension fund under this Article, then the accounts of assets of the firefighters' pension fund established by the municipality shall be transferred to the accounts board of trustees of the pension fund of the fire protection district. The firefighters' pension fund of the fire protection district shall assume all liabilities of the municipality relating to the Fund municipality's firefighters' pension fund, and all of the accrued rights, benefits, and future expectancies of the affected members, retired employees, and beneficiaries of the municipality's firefighters' pension fund shall remain unimpaired.

(c) The corporate authorities of a municipality that participates in the Fund for which a pension fund has been established under this Article may, by resolution or ordinance, cease participating in the Fund dissolve the fund if an independent auditor has certified to the Board and the corporate authorities that the municipality fund has no liabilities to the Fund and no , participants, or beneficiaries entitled to benefits. The corporate , and the authorities shall reestablish the municipality's participation in the Fund the fund if a firefighter of the municipality seeks to establish service credit in the Fund fund or if reestablishment of participation in the Fund the fund is required upon a former firefighter's reinstatement of creditable service under subsection (g) of Section 4-109.3 of this Code.

The Board of the Fund Public Pension Division of the Department of Insurance shall adopt rules regarding the process and procedures for (i) ending participation in the Fund dissolving a pension fund under this Section and (ii) redistributing assets and reestablishing participation in the Fund when the fund if reestablishment of the fund is necessary. Rules adopted under this subsection do not apply to the consolidation of pension funds pursuant to this amendatory Act of the 100th General Assembly.

(Source: P.A. 100-201, eff. 8-18-17.)

(40 ILCS 5/4-106.2 new)

Sec. 4-106.2. Municipal succession upon termination; new participating municipalities.

(a) This Section does not apply to the consolidation into this Fund of the existing firefighters' pension funds under this Article on January 1, 2021.

(b) A participating municipality that succeeds to the functions of another participating municipality that is dissolved or terminates its existence shall assume the net accumulation balance in the municipal reserve and the municipal account receivable balance of the terminated municipality.

(c) The following described municipalities, but not including any with more than 500,000 inhabitants, shall be included within and be subject to this Article beginning upon the effective dates specified by the Board:

(1) In the case of a municipality that did not have a firefighters' pension fund under this Article on December 31, 2020 and is required to participate in this Fund by virtue of having any full-time paid firefighters and reaching the population specified in Section 4-103, the Board shall notify the municipality, within 90 days after publication of the applicable census, that it has become subject to this Article and shall provide information to the corporate authorities of the municipality explaining the duties and consequences of participation. The notification shall also include a proposed date upon which participation by the municipality will commence.

(2) In the case of a fire protection district that did not have a firefighters' pension fund under this Article on December 31, 2020 and is required to participate in this Fund by virtue of having any full-time paid firefighters, the fire protection district must notify the Board of its status no later than 60 days following employment of its first full-time paid firefighter. The Board shall provide information to the governing body of the fire protection district not more than 90 days after such notification, which shall explain the duties and consequences of participation. The notification shall also include a proposed date upon which participation by the fire protection district will commence.

(3) In the case of a municipality that did not have a firefighters' pension fund under this Article on December 31, 2020 and whose electors have chosen to be included under this Article by referendum under Section 4-141, the clerk of the municipality or other appropriate official of its governing body shall promptly notify the Board of that action and provide the Board with a copy of the proposition adopted by referendum, duly authenticated and certified.

(d) A municipality that did not have a firefighters' pension fund under this Article on December 31, 2020 and is about to begin participation shall submit to the Board an application to participate, in a form acceptable to the Board, not later than 90 days prior to the proposed effective date of participation. The Board shall act upon the application within 90 days, and if it finds that the application is in conformity with its requirements and the requirements of this Article, participation by the applicant shall commence on a date acceptable to the municipality and specified by the Board, but in no event later than one year after the date of application.

(e) Each prospective participating municipality shall pay to the Fund the cost, as determined by the Board, of a study prepared by the Fund or its actuary detailing the prospective costs of participation in the Fund to be expected by the municipality.

(40 ILCS 5/4-106.5 new)

Sec. 4-106.5. Authorized agent of a participating municipality.

(a) Each participating municipality shall appoint an authorized agent who shall have the powers and duties set forth in this Section. In the absence of such an appointment, the duties of the authorized agent shall devolve upon the clerk or secretary of the municipality.

(b) The authorized agent of the municipality shall have the following powers and duties:

(1) To certify to the Fund and to the benefit board of the municipality whether or not a given person is authorized to participate in the Fund.

(2) To certify to the Fund and to the benefit board of the municipality when a participating employee is on a leave of absence authorized by the municipality.

(3) To request the proper officer to cause employee contributions to be withheld from salary and promptly transmitted to the Fund.

(4) To request the proper officer to cause municipality contributions to be promptly forwarded to the Fund.

(5) To forward promptly to all participating employees any communications for such employees from the Fund, the municipality, or the benefit board of the municipality.

(6) To forward promptly to the benefit board of the municipality all applications, claims reports, and other communications delivered to the agent by participating employees.

(7) To perform all duties related to the administration of the Fund as requested by the Fund, the benefit board of the municipality, or the governing body of the municipality.

(c) The governing body of each participating municipality may delegate either or both of the following powers to its authorized agent:

(1) To file a petition for nomination of an executive trustee of the Fund.

(2) To cast the ballot for election of an executive trustee of the Fund.

If a governing body does not authorize its agent to perform the powers set forth in this subsection (c), they shall be performed by the governing body itself, unless the governing body by resolution duly certified to the Fund delegates them to some other officer or employee.

(d) The delivery of any communication or document by an employee or a municipality to the authorized agent of the municipality does not constitute delivery to the Fund.

(40 ILCS 5/4-108) (from Ch. 108 1/2, par. 4-108)

Sec. 4-108. Creditable service.

(a) Creditable service is the time served as a firefighter of a municipality. In computing creditable service, furloughs and leaves of absence without pay exceeding 30 days in any one year shall not be counted, but leaves of absence for illness or accident regardless of length, and periods of disability for which a firefighter received no disability pension payments under this Article, shall be counted.

(a-5) Upon the consolidation of the firefighters' pension funds under this Article into the Downstate Firefighters Pension Fund on January 1, 2021, creditable service under any such pension fund shall be deemed to be creditable service in the Downstate Firefighters Pension Fund, subject to the following provisions:

(1) The consolidation of firefighters' pension funds into the Downstate Firefighters Pension Fund shall not result in the duplication of any service credit based on the same period of service in this or any other pension fund or retirement system subject to this Code.

The consolidation of a former firefighters' pension fund under this Article into the Downstate Firefighters Pension Fund shall not be construed as resulting in service rendered by an employee being accredited in more than one pension fund.

(2) If this Section or any other provision of this Article imposes a limit on the amount of creditable service that may be established for a particular activity or purpose, and prior to consolidation a firefighter has established periods of creditable service for that activity or purpose in more than one former firefighters' pension fund under this Article, which periods are within that limitation for each such fund but together exceed that limitation, then upon consolidation all such credit previously established by the firefighter shall be preserved under the Fund, but no additional creditable service for that activity or purpose may be established by that firefighter in the Fund.

(3) The consolidation of firefighters' pension funds into the Downstate Firefighters Pension Fund shall not entitle any person or pension fund to a refund of any contribution or payment previously paid or transferred in order to establish or transfer creditable service under this Article.

(b) Furloughs and leaves of absence of 30 days or less in any one year may be counted as creditable service, if the firefighter makes the contribution to the Fund fund that would have been required had he or she not been on furlough or leave of absence. To qualify for this creditable service, the firefighter must pay the required contributions to the Fund fund not more than 90 days subsequent to the termination of the furlough or leave of absence, to the extent that the municipality has not made such contribution on his or her behalf.

(c) Creditable service includes:

(1) Service in the military, naval or air forces of the United States entered upon when the person was an active firefighter, provided that, upon applying for a permanent pension, and in accordance with the rules of the board the firefighter pays into the Fund fund the amount that would have been contributed had he or she been a regular contributor during such period of service, if and to the extent that the municipality which the firefighter served made no such contributions in his or her behalf. The total amount of such creditable service shall not exceed 5 years, except that any firefighter who on July 1, 1973 had more than 5 years of such creditable service shall receive the total amount thereof as of that date.

(1.5) Up to 24 months of service in the military, naval, or air forces of the United States that was served prior to employment by a municipality or fire protection district as a firefighter. To receive the credit for the military service prior to the employment as a firefighter, the firefighter must apply in writing to the Fund fund and must make contributions to the Fund fund equal to (i) the employee contributions that would have been required had the service been rendered as a member, plus (ii) an amount determined by the Fund fund to be equal to the employer's normal cost of the benefits accrued for that military service, plus (iii) interest at the prescribed rate actuarially assumed rate provided by the Department of Financial and Professional Regulation, compounded annually from the first date of membership in the Fund fund to the date of payment on items (i) and (ii). The changes to this paragraph (1.5) made by Public Act 95-1056 this amendatory Act of the 95th General Assembly apply only to participating employees in service on or after April 10, 2009 (its effective date).

(2) Service prior to July 1, 1976 by a firefighter initially excluded from participation by reason of age who elected to participate and paid the required contributions for such service.

(3) Up to 8 years of service by a firefighter as an officer in a statewide firefighters' association when he is on a leave of absence from a municipality's payroll, provided that (i) the firefighter has at least 10 years of creditable service as an active firefighter, (ii) the firefighter contributes to the Fund fund the amount that he would have contributed had he remained an active member of the Fund fund, (iii) the employee or statewide firefighter association contributes to the Fund fund an amount equal to the employer's required contribution as determined by the board, and (iv) for all leaves of absence under this subdivision (3), including those beginning before January 5, 2012 (the effective date of Public Act 97-651) this amendatory Act of the 97th General Assembly, the firefighter continues to remain in sworn status, subject to the professional standards of the public employer or those terms established in statute.

(4) Time spent as an on-call fireman for a municipality, calculated at the rate of one year of creditable service for each 5 years of time spent as an on-call fireman, provided that (i) the firefighter has at least 18 years of creditable service as an active firefighter, (ii) the firefighter spent at least 14 years as an on-call firefighter for the municipality, (iii) the firefighter applies for such creditable service within 30 days after August 23, 1989 (the effective date of Public Act 86-273) this amendatory Act of 1989, (iv) the firefighter contributes to the Fund an amount representing employee contributions for the number of years of creditable service granted under this subdivision (4), based on the salary and contribution rate in effect for the firefighter at the date of entry into the Fund, to be determined by the board, and (v) not more than 3 years of creditable service may be granted under this subdivision (4).

Except as provided in Section 4-108.5, creditable service shall not include time spent as a volunteer firefighter, whether or not any compensation was received therefor. The change made in this Section by Public Act 83-0463 is intended to be a restatement and clarification of existing law, and does not imply that creditable service was previously allowed under this Article for time spent as a volunteer firefighter.

(5) Time served between July 1, 1976 and July 1, 1988 in the position of protective inspection officer or administrative assistant for fire services, for a municipality with a population under 10,000 that is located in a county with a population over 3,000,000 and that maintains a firefighters' pension fund under this Article, if the position included firefighting duties, notwithstanding that the person may not have held an appointment as a firefighter, provided that application is made to the pension fund within 30 days after November 19, 1991 (the effective date of Public Act 87-794) this amendatory Act of 1991, and the corresponding contributions are paid for the number of years of service granted, based upon the salary and contribution rate in effect for the firefighter at the date of entry into the pension fund, as determined by the Board.

(6) Service before becoming a participant by a firefighter initially excluded from participation by reason of age who becomes a participant under the amendment to Section 4-107 made by Public Act 87-1265 this amendatory Act of 1993 and pays the required contributions for such service.

(7) Up to 3 years of time during which the firefighter receives a disability pension under Section 4-110, 4-110.1, or 4-111, provided that (i) the firefighter returns to active service after the disability for a period at least equal to the period for which credit is to be established and (ii) the firefighter makes contributions to the Fund fund based on the rates specified in Section 4-118.1 and the salary upon which the disability pension is based. These contributions may be paid at any time prior to the commencement of a retirement pension. The firefighter may, but need not, elect to have the contributions deducted from the disability pension or to pay them in installments on a schedule approved by the board. If not deducted from the disability pension, the contributions shall include interest at the rate of 6% per year, compounded annually, from the date for which service credit is being established to the date of payment. If contributions are paid under this subdivision (c)(7) in excess of those needed to establish the credit, the excess shall be refunded. This subdivision (c)(7) applies to persons receiving a disability pension under Section 4-110, 4-110.1, or 4-111 on the effective date of this amendatory Act of the 91st General Assembly, as well as persons who begin to receive such a disability pension after that date.

(8) Up to 6 years of service as a police officer and participant in an Article 3 police pension fund administered by the unit of local government that employs the firefighter under this Article, provided that the service has been transferred to, and the required payment received by, the Article 4 fund in accordance with Section 3-110.12 of this Code.

(Source: P.A. 100-544, eff. 11-8-17.)

(40 ILCS 5/4-108.1) (from Ch. 108 1/2, par. 4-108.1)

Sec. 4-108.1. Transfer of creditable service to General Assembly Retirement System.

(a) Any active member of the General Assembly Retirement System may apply for transfer of credits and creditable service accumulated in any firefighter's pension fund under this Article to the General Assembly Retirement System. Such transfer shall be made forthwith. Payment by the Downstate Firefighters Pension Fund firefighters' pension fund to the General Assembly Retirement System shall be made at the same time and shall consist of:

(1) the amounts credited to the applicant through employee contributions; and

(2) municipality contributions equal to the accumulated employee contributions as determined under (1) above. Participation in the Downstate Firefighters Pension Fund firefighters' pension fund shall terminate on the date of transfer.

(b) An active member of the General Assembly may reinstate service and creditable service terminated upon receipt of a refund, by payment to the Downstate Firefighters Pension Fund firefighters' pension fund of the amount of the refund with interest thereon at the rate of 6% per year to the date of payment.

(c) Transactions under this Section taking place on or after the consolidation date shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-108.2) (from Ch. 108 1/2, par. 4-108.2)

Sec. 4-108.2. Transfer of creditable service to Article 8, 9 or 13 fund.

(a) Any city officer as defined in Section 8-243.2 of this Code, any county officer elected by vote of the people who is a participant in a pension fund established under Article 9 of this Code, and any elected sanitary district commissioner who is a participant in a pension fund established under Article 13 of this Code, may apply for transfer of his credits and creditable service accumulated in the Downstate Firefighters Pension Fund any firefighters' pension fund established under this Article to such Article 8, 9 or 13 fund. Such transfer shall be made forthwith. Payment by the Downstate Firefighters Pension Fund firefighters' pension fund to the Article 8, 9 or 13 fund shall be made at the same time and shall consist of:

(1) the amounts credited to the applicant through employee contributions; and

(2) municipality contributions equal to the accumulated employee contributions as determined under (1) above.

Participation in the Downstate Firefighters Pension Fund firefighters' pension fund shall terminate on the date of transfer.

(b) Any such elected city officer, county officer or sanitary district commissioner may reinstate credits and creditable service terminated upon receipt of a refund, by payment to the Downstate Firefighters Pension Fund firefighters' pension fund of the amount of the refund with interest thereon at the rate of 6% per year, compounded annually from the date of refund to the date of payment.

(c) Transactions under this Section taking place on or after the consolidation date shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(Source: P.A. 85-964; 86-1488.)

(40 ILCS 5/4-108.4)

Sec. 4-108.4. Transfer of creditable service from Article 7 fund.

(a) Any firefighter who was excluded from participation in an Article 4 fund because the firefighter earned credit for that service under Article 7 of this Code and who is a participant in the Illinois Municipal Retirement Fund may become an active participant in the Downstate Firefighters Pension Fund that firefighter pension fund by making a written application to the Board. Persons so applying shall begin participation on the first day of the month following the month in which the application is received by the Board. An employee who makes application for participation shall not be deemed ineligible to participate in the Downstate Firefighters Pension Fund firefighter pension fund by reason of having failed to apply within the 3-month period specified in subsection (b) of Section 4-107.

(b) A firefighter who was excluded from participation in an Article 4 fund because the firefighter earned credit for that service under Article 7 of this Code and who is a participant in the Illinois Municipal Retirement Fund may also elect to establish creditable service for those periods of employment as a firefighter during which he or she was excluded from participation in an Article 4 fund by paying into the Downstate Firefighters Pension Fund fund the amount that the person would have contributed had deductions from salary been made for this purpose at the time the service was rendered, together with interest thereon at 6% per annum, compounded annually, from the time the service was rendered until the date of payment, less any amounts transferred from the Illinois Municipal Retirement Fund under Section 7-139.10.

(c) In no event shall pension credit for the same service rendered by an employee be accredited in more than one pension fund or retirement system under this Code. The consolidation of a former firefighters' pension fund under this Article into the Downstate Firefighters Pension Fund shall not be construed as resulting in service rendered by an employee being accredited in more than one pension fund.

If an employee applies for service credit under subsection (b), then any creditable service time accumulated in the Illinois Municipal Retirement Fund for the same period must be transferred to the Fund Article 4 fund under Section 7-139.10.

(d) Service credit established under this Section before the consolidation date shall be deemed to be service credit under the Downstate Firefighters Pension Fund and shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

(Source: P.A. 93-689, eff. 7-1-04.)

(40 ILCS 5/4-108.5)

Sec. 4-108.5. Service for providing certain fire protection services.

(a) A firefighter for a participating municipality who was employed as an active firefighter providing fire protection for a village or incorporated town with a population of greater than 10,000 but less than 11,000 located in a county with a population of greater than 600,000 and less than 700,000, as estimated by the United States Census on July 1, 2004, may elect to establish creditable service for periods of that employment in which the firefighter provided fire protection services for the participating municipality if, by May 1, 2007, the firefighter (i) makes written application to the Board and (ii) pays into the pension fund the amount that the person would have contributed had deductions from salary been made for this purpose at the time the service was rendered, plus interest thereon at 6% per annum compounded annually from the time the service was rendered until the date of payment.

(b) Time spent providing fire protection on a part-time basis for a village or incorporated town with a population of greater than 10,000 but less than 11,000 located in a county with a population of greater than 600,000 and less than 700,000, as estimated by the United States Census on July 1, 2004, shall be calculated at the rate of one year of creditable service for each 5 years of time spent providing such fire protection, if the firefighter (i) has at least 5 years of creditable service as an active firefighter, (ii) has at least 5 years of such service with a qualifying village or incorporated town, (iii) applies for the creditable service within 30 days after June 15, 2006 (the effective date of Public Act 94-856) this amendatory Act of the 94th General Assembly, and (iv) contributes to the Fund an amount representing employee contributions for the number of years of creditable service granted under this subsection (b) based on the salary and contribution rate in effect for the firefighter at the date of entry into the fund, as determined by the Board. The amount of creditable service granted under this subsection (b) may not exceed 3 years.

(c) This subsection applies only to a person who was first employed by a municipality in 2008 to provide fire protection services on a full-time basis as a firefighter or fire chief, but was prevented from participating in a pension fund under this Article until 2015 by reason of the employing municipality's delay in establishing a pension fund as required under this Article. Such a person may elect to establish creditable service for periods of such employment by that municipality during which he or she did not participate, by applying to the board in writing and paying to the pension fund the employee contributions that he or she would have made had deductions from salary been made for employee contributions at the time the service was rendered, together with interest thereon at the rate of 6% per annum, compounded annually, from the time the service was rendered to the date of payment; except that the granting of such creditable service is contingent upon the consent of the governing body of the municipality and payment to the pension fund by the municipality of the corresponding employer contributions, plus interest.

For the purposes of Sections 4-109, 4-109.1, and 4-114, and notwithstanding any other provision of this Article, for a person who establishes creditable service under this subsection (c), the date upon which the person first became a participating firefighter under this Article shall be deemed to be no later than the first day of employment for which such creditable service has been granted.

(d) Service credit established under this Section before the consolidation date shall be deemed to be service credit under the Downstate Firefighters Pension Fund and shall be credited or charged to the appropriate municipal accounts and reserves, as directed by the Board of the Fund.

The consolidation of a former firefighters' pension fund under this Article into the Downstate Firefighters Pension Fund shall not be construed as resulting in service rendered by an employee being accredited in more than one pension fund.

(Source: P.A. 100-539, eff. 11-7-17.)

(40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)

Sec. 4-109. Pension.

(a) A firefighter age 50 or more with 20 or more years of creditable service, who is no longer in service as a firefighter in any participating municipality (except as otherwise allowed under Section 4-109.3 or 4-117), shall receive a monthly pension of 1/2 the monthly salary attached to the rank held by him or her in the fire service at the date of retirement.

The monthly pension shall be increased by 1/12 of 2.5% of such monthly salary for each additional month over 20 years of service through 30 years of service, to a maximum of 75% of such monthly salary.

The changes made to this subsection (a) by Public Act 91-466 this amendatory Act of the 91st General Assembly apply to all pensions that become payable under this subsection on or after January 1, 1999. All pensions payable under this subsection that began on or after January 1, 1999 and before August 6, 1999 (the effective date of Public Act 91-466) this amendatory Act shall be recalculated, and the amount of the increase accruing for that period shall be payable to the pensioner in a lump sum.

(b) A firefighter who retires or is separated from service having at least 10 but less than 20 years of creditable service, who is not entitled to receive a disability pension, and who did not apply for a refund of contributions at his or her last separation from service shall receive a monthly pension upon attainment of age 60 based on the monthly salary attached to his or her rank in the fire service on the date of retirement or separation from service according to the following schedule:

For 10 years of service, 15% of salary;

For 11 years of service, 17.6% of salary;

For 12 years of service, 20.4% of salary;

For 13 years of service, 23.4% of salary;

For 14 years of service, 26.6% of salary;

For 15 years of service, 30% of salary;

For 16 years of service, 33.6% of salary;

For 17 years of service, 37.4% of salary;

For 18 years of service, 41.4% of salary;

For 19 years of service, 45.6% of salary.

(c) Notwithstanding any other provision of this Article, the provisions of this subsection (c) apply to a person who first becomes a firefighter under this Article on or after January 1, 2011.

A firefighter age 55 or more who has 10 or more years of service in that capacity shall be entitled at his option to receive a monthly pension for his service as a firefighter computed by multiplying 2.5% for each year of such service by his or her final average salary.

The pension of a firefighter who is retiring after attaining age 50 with 10 or more years of creditable service shall be reduced by one-half of 1% for each month that the firefighter's age is under age 55.

The maximum pension under this subsection (c) shall be 75% of final average salary.

For the purposes of this subsection (c), "final average salary" means the average monthly salary obtained by dividing the total salary of the firefighter during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period.

Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual salary based on the plan year of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

(Source: P.A. 96-1495, eff. 1-1-11.)

(40 ILCS 5/4-109.3)

Sec. 4-109.3. Firefighters with Employee creditable service under more than one participating municipality, who is not in service on or after January 1, 2021.

(a) This Section applies only to firefighters with creditable service earned under more than one participating municipality who are not in service under this Article on or after January 1, 2021 (the consolidation date); and as otherwise provided in subsection (j) of this Section for certain persons subject to this Section before the effective date of this amendatory Act of the 100th General Assembly.

As used in this Section:

"Final monthly salary" means the monthly salary attached to the rank held by the firefighter at the time of his or her last withdrawal from service under a particular pension fund.

"Last pension fund" means the pension fund under this Article in which the firefighter was participating at the time of his or her last withdrawal from service.

(b) Subject to the limitation in subsection (a), the The benefits provided under this Section are available only to a firefighter who:

(1) is a firefighter at the time of withdrawal from the last pension fund and for at least the final 3 years of employment prior to that withdrawal;

(2) has established service credit with at least one pension fund established under this Article other than the last pension fund;

(3) has a total of at least 20 years of service under the various pension funds established under this Article and has attained age 50; and

(4) is in service on or after July 1, 2004 (the effective date of Public Act 93-689) but not on or after January 1, 2021 (the consolidation date), except as otherwise provided in subsection (j) of this Section for certain persons previously subject to this Section this amendatory Act of the 93rd General Assembly.

(b-5) Beginning January 1, 2021 (the consolidation date), in the case of a firefighter who is receiving or is entitled to receive retirement pensions under this Section from more than one pension fund under this Article, those separate pensions shall instead be payable, in the same amounts, as separate pensions from the Downstate Firefighters Pension Fund, to be paid by the appropriate benefit boards acting as payment agents of the Fund and charged to the appropriate municipal accounts and reserves.

(b-10) In the event that the consolidation of pension funds under this Article or the changes to this Section made by this amendatory Act of the 100th General Assembly would create a benefit impairment for a person to whom this Section applies, the Board of the Fund shall allow the affected firefighter or survivor to elect to receive instead a benefit equal to the best benefit for which he or she would qualify under the provisions of this Article in effect at any time during the firefighter's active service prior to the consolidation date.

(b-15) For the purposes of Section 1-103.1, the changes to this Section made by this amendatory Act of the 100th General Assembly are not limited to firefighters in service on or after the effective date of this amendatory Act of the 100th General Assembly.

(c) Except as provided in subsections (b-5) and (b-10), a A firefighter who is eligible for benefits under this Section may elect to receive a retirement pension from each pension fund under this Article in which the firefighter has at least one year of service credit but has not received a refund under Section 4-116 (unless the firefighter repays that refund under subsection (g)) or subsection (c) of Section 4-118.1, by applying in writing and paying the contribution required under subsection (i).

Notwithstanding the other provisions of this subsection, beginning January 1, 2021, no additional contributions shall be required or paid under this subsection (c).

(d) Except as provided in subsections (b-5) and (b-10), from From each such pension fund other than the last pension fund, in lieu of any retirement pension otherwise payable under this Article, a firefighter to whom this Section applies may elect to receive a monthly pension of 1/12th of 2.5% of his or her final monthly salary under that fund for each month of service in that fund, subject to a maximum of 75% of that final monthly salary.

(e) Except as provided in subsections (b-5) and (b-10), from From the last pension fund, in lieu of any retirement pension otherwise payable under this Article, a firefighter to whom this Section applies may elect to receive a monthly pension calculated as follows:

The last pension fund shall calculate the retirement pension that would be payable to the firefighter under subsection (a) of Section 4-109 as if he or she had participated in that last pension fund during his or her entire period of service under all pension funds established under this Article (excluding any period of service for which the firefighter has received a refund under Section 4-116, unless the firefighter repays that refund under subsection (g), or for which the firefighter has received a refund under subsection (c) of Section 4-118.1). From this hypothetical pension there shall be subtracted the original amounts of the retirement pensions payable to the firefighter by all other pension funds under subsection (d). The remainder is the retirement pension payable to the firefighter by the last pension fund under this subsection (e).

(f) Pensions elected under this Section shall be subject to increases as provided in subsection (d) of Section 4-109.1.

(g) A current firefighter may reinstate creditable service in a pension fund established under this Article that was terminated upon receipt of a refund, by payment to the Fund that pension fund of the amount of the refund together with interest thereon at the rate of 6% per year, compounded annually, from the date of the refund to the date of payment. A repayment of a refund under this Section may be made in equal installments over a period of up to 10 years, but must be paid in full prior to retirement.

(h) As a condition of being eligible for the benefits provided in this Section, a person who is hired to a position as a firefighter on or after July 1, 2004 but before January 1, 2021 must, within 21 months after being hired, notify the new employer, all of his or her previous employers under this Article, and the Public Pension Division of the Department Division of Insurance of the Department of Financial and Professional Regulation of his or her intent to receive the benefits provided under this Section.

(i) In order to receive a pension under this Section or an occupational disease disability pension for which he or she becomes eligible due to the application of subsection (m) of this Section, a firefighter must pay to each pension fund from which he or she has elected to receive a pension under this Section a contribution equal to 1% of monthly salary for each month of service credit that the firefighter has in that fund (other than service credit for which the firefighter has already paid the additional contribution required under subsection (c) of Section 4-118.1), together with interest thereon at the rate of 6% per annum, compounded annually, from the firefighter's first day of employment with that fund or the first day of the fiscal year of that fund that immediately precedes the firefighter's first day of employment with that fund, whichever is earlier.

In order for a firefighter who, as of March 11, 2005 (the effective date of Public Act 93-1090) this amendatory Act of the 93rd General Assembly, has not begun to receive a pension under this Section or an occupational disease disability pension under subsection (m) of this Section and who has contributed 1/12th of 1% of monthly salary for each month of service credit that the firefighter has in that fund (other than service credit for which the firefighter has already paid the additional contribution required under subsection (c) of Section 4-118.1), together with the required interest thereon, to receive a pension under this Section or an occupational disease disability pension for which he or she becomes eligible due to the application of subsection (m) of this Section, the firefighter must, within one year after March 11, 2005 the effective date of this amendatory Act of the 93rd General Assembly, make an additional contribution equal to 11/12ths of 1% of monthly salary for each month of service credit that the firefighter has in that fund (other than service credit for which the firefighter has already paid the additional contribution required under subsection (c) of Section 4-118.1), together with interest thereon at the rate of 6% per annum, compounded annually, from the firefighter's first day of employment with that fund or the first day of the fiscal year of that fund that immediately precedes the firefighter's first day of employment with the fund, whichever is earlier.

A firefighter who, as of March 11, 2005 (the effective date of Public Act 93-1090) this amendatory Act of the 93rd General Assembly, has not begun to receive a pension under this Section or an occupational disease disability pension under subsection (m) of this Section and who has contributed 1/12th of 1% of monthly salary for each month of service credit that the firefighter has in that fund (other than service credit for which the firefighter has already paid the additional contribution required under subsection (c) of Section 4-118.1), together with the required interest thereon, in order to receive a pension under this Section or an occupational disease disability pension under subsection (m) of this Section, may elect, within one year after March 11, 2005, (the effective date of Public Act 93-1090) this amendatory Act of the 93rd General Assembly to forfeit the benefits provided under this Section and receive a refund of that contribution.

Notwithstanding the other provisions of this subsection, beginning January 1, 2021, no additional contributions shall be required or paid under this subsection (i).

(j) A retired firefighter subject to this Section who is receiving pension payments under Section 4-109 may reenter active service under this Article. Subject to the provisions of Section 4-117, the firefighter may receive credit for service performed after the reentry if the firefighter (1) applies to receive credit for that service, (2) suspends his or her pensions under this Section, and (3) makes the contributions required under subsection (i) with respect to service before the consolidation date.

In the case of a retired firefighter who (1) has received pension payments under this Section, (2) reenters active service under this Article as provided in this subsection, (3) is in service on or after the consolidation date, and (4) receives service credit for additional service, the additional pension benefits resulting from that additional service credit shall be determined, granted, and paid by the affected benefit boards as an adjustment to the pensions provided under this Section, rather than as a benefit to be determined, granted, and paid under Section 4-109.4, notwithstanding that the firefighter was in active service on or after the consolidation date. If the additional service credit was earned under a participating municipality other than the last employer, the adjustment shall include a change in last employer as of the effective date of the adjustment and a recalculation of the benefit thereafter attributable to the previous last employer, but shall not affect any benefits paid under this Section prior to the effective date of the adjustment.

(k) A firefighter who is newly hired or promoted to a position as a firefighter shall not be denied participation in a fund under this Article based on his or her age.

(l) Subject to the limitations in subsection (b-5), if If a firefighter who elects to make contributions under subsection (c) of Section 4-118.1 for the pension benefits provided under this Section becomes entitled to a disability pension under Section 4-110 before January 1, 2021 (the consolidation date), the last pension fund is responsible to pay that disability pension and the amount of that disability pension shall be based only on the firefighter's service with the last pension fund.

(m) Notwithstanding any provision in Section 4-110.1 to the contrary, but subject to the limitations in subsection (a), if a firefighter who elects to make contributions under subsection (c) of Section 4-118.1 for the pension benefits provided under this Section becomes entitled to an occupational disease disability pension under Section 4-110.1 before January 1, 2021 (the consolidation date), each pension fund to which the firefighter has made contributions under subsection (c) of Section 4-118.1 must pay a portion of that occupational disease disability pension equal to the proportion that the firefighter's service credit with that pension fund for which the contributions under subsection (c) of Section 4-118.1 have been made bears to the firefighter's total service credit with all of the pension funds for which the contributions under subsection (c) of Section 4-118.1 have been made. A firefighter who has made contributions under subsection (c) of Section 4-118.1 for at least 5 years of creditable service shall be deemed to have met the 5-year creditable service requirement under Section 4-110.1, regardless of whether the firefighter has 5 years of creditable service with the last pension fund.

(n) Subject to the limitation in subsection (a), if If a firefighter who elects to make contributions under subsection (c) of Section 4-118.1 for the pension benefits provided under this Section becomes entitled to a disability pension under Section 4-111 before January 1, 2021 (the consolidation date), the last pension fund is responsible to pay that disability pension, provided that the firefighter has at least 7 years of creditable service with the last pension fund. In the event a firefighter began employment with a new employer as a result of an intergovernmental agreement that resulted in the elimination of the previous employer's fire department, the firefighter shall not be required to have 7 years of creditable service with the last pension fund to qualify for a disability pension under Section 4-111. Under this circumstance, a firefighter shall be required to have 7 years of total combined creditable service time to qualify for a disability pension under Section 4-111. The disability pension received pursuant to this Section shall be paid by the previous employer and new employer in proportion to the firefighter's years of service with each employer.

(Source: P.A. 95-1032, eff. 2-17-09; 95-1036, eff. 2-17-09.)

(40 ILCS 5/4-109.4 new)

Sec. 4-109.4. Employee with service under more than one participating municipality, who is in service on or after January 1, 2021.

(a) This Section applies only to firefighters with creditable service earned under more than one participating municipality who are in service under this Article on or after January 1, 2021 (the consolidation date) and to the survivors of such firefighters.

(b) Except as otherwise provided in this Section, the calculation of benefits under this Article that first become payable on or after January 1, 2021 to a firefighter to whom this Section applies, or to a survivor of such a firefighter, shall include all of the firefighter's creditable service and salary credits under the Downstate Firefighters Pension Fund as though arising under that single Fund, even though they originally resulted from service under more than one municipality or more than one Article 4 pension fund. The Board shall, however, consider those municipalities and pension funds separately in determining how benefits will be chargeable to the appropriate municipal accounts and reserves.

(c) In the case of a benefit to which subsection (b) applies:

(1) the benefit board of each affected municipality shall be responsible for certifying to the Board of the Fund the relevant service credit, payroll, and employee contribution data arising under that municipality;

(2) the benefit shall be determined, granted, and paid directly by the Board of Trustees, rather than by the benefit boards of the affected municipalities acting as agents of the Fund; and

(3) the cost of the benefit shall be attributed proportionally to the separate reserves and accounts of the appropriate municipalities in a manner to be determined by the Board.

(d) In the case of a retired firefighter who (i) has received pension payments under Section 4-109.3, (ii) re-enters active service under this Article as provided in subsection (j) of that Section, (iii) receives service credit for additional service, and (iv) is in service on or after the consolidation date, the additional pension benefits resulting from that additional service credit (and increase in salary, if applicable) shall be determined, granted, and paid as an adjustment to the pensions provided under Section 4-109.3, rather than as a benefit to be determined, granted, and paid under subsection (b) of this Section, notwithstanding that the firefighter was in active service on or after the consolidation date.

(e) In the event that subsection (b) of this Section or the consolidation of pension funds under this Article operates to create a benefit impairment for a person to whom this Section applies, the Board of the Fund shall, by rule, allow the firefighter or survivor to elect to receive instead a benefit equal to the best benefit that would be available to him or her under the provisions of this Article in effect at any time during the firefighter's active service prior to the consolidation date.

(40 ILCS 5/4-110) (from Ch. 108 1/2, par. 4-110)

Sec. 4-110. Disability pension; line pension - Line of duty. If a firefighter, as the result of sickness, accident or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty, is found, pursuant to Section 4-112, to be physically or mentally permanently disabled for service in the fire department, so as to render necessary his or her being placed on disability pension, the firefighter shall be entitled to a disability pension equal to the greater of (1) 65% of the monthly salary attached to the rank held by him or her in the fire department at the date he or she is removed from the municipality's fire department payroll or (2) the retirement pension that the firefighter would be eligible to receive if he or she retired (but not including any automatic annual increase in that retirement pension). A firefighter shall be considered "on duty" while on any assignment approved by the chief of the fire department, even though away from the municipality he or she serves as a firefighter, if the assignment is related to the fire protection service of the municipality.

Such firefighter shall also be entitled to a child's disability benefit of $20 a month on account of each unmarried child less than 18 years of age and dependent upon the firefighter for support, either the issue of the firefighter or legally adopted by him or her. The total amount of child's disability benefit payable to the firefighter, when added to his or her disability pension, shall not exceed 75% of the amount of salary which the firefighter was receiving at the date of retirement.

Benefits payable on account of a child under this Section shall not be reduced or terminated by reason of the child's attainment of age 18 if he or she is then dependent by reason of a physical or mental disability but shall continue to be paid as long as such dependency continues. Individuals over the age of 18 and adjudged to be disabled persons pursuant to Article XIa of the Probate Act of 1975, except for persons receiving benefits under Article III of the Illinois Public Aid Code, shall be eligible to receive benefits under this Act.

If a firefighter dies while still disabled and receiving a disability pension under this Section, the disability pension shall continue to be paid to the firefighter's survivors in the sequence provided in Section 4-114. A pension previously granted under Section 4-114 to a survivor of a firefighter who died while receiving a disability pension under this Section shall be deemed to be a continuation of the pension provided under this Section and shall be deemed to be in the nature of worker's compensation payments. The changes to this Section made by Public Acts 89-136 and 89-168 this amendatory Act of 1995 are intended to be retroactive and are not limited to persons in service on or after their its effective dates date.

(Source: P.A. 93-1090, eff. 3-11-05.)

(40 ILCS 5/4-110.1) (from Ch. 108 1/2, par. 4-110.1)

Sec. 4-110.1. Occupational disease disability pension.

The General Assembly finds that service in the fire department requires firefighters in times of stress and danger to perform unusual tasks; that firefighters are subject to exposure to extreme heat or extreme cold in certain seasons while performing their duties; that they are required to work in the midst of and are subject to heavy smoke fumes, and carcinogenic, poisonous, toxic or chemical gases from fires; and that these conditions exist and arise out of or in the course of employment.

An active firefighter with 5 or more years of creditable service under this Article who is found, pursuant to Section 4-112, unable to perform his or her duties in the fire department by reason of heart disease, stroke, tuberculosis, or any disease of the lungs or respiratory tract, resulting from service as a firefighter, is entitled to an occupational disease disability pension during any period of such disability for which he or she has no right to receive salary.

Any active firefighter who has completed 5 or more years of service under this Article and is unable to perform his or her duties in the fire department by reason of a disabling cancer, which develops or manifests itself during a period while the firefighter is in the service of the fire department, shall be entitled to receive an occupational disease disability benefit during any period of such disability for which he or she does not have a right to receive salary. In order to receive this occupational disease disability benefit, (i) the type of cancer involved must be a type which may be caused by exposure to heat, radiation or a known carcinogen as defined by the International Agency for Research on Cancer and (ii) the cancer must (and is rebuttably presumed to) arise as a result of service as a firefighter.

A firefighter who enters the service after August 27, 1971 shall be examined by one or more practicing physicians appointed by the applicable benefit board. If the examination discloses impairment of the heart, lungs or respiratory tract, or the existence of any cancer, the firefighter shall not be entitled to the occupational disease disability pension unless and until a subsequent examination reveals no such impairment or cancer.

The occupational disease disability pension shall be equal to the greater of (1) 65% of the salary attached to the rank held by the firefighter in the fire service at the time of his or her removal from the municipality's fire department payroll or (2) the retirement pension that the firefighter would be eligible to receive if he or she retired (but not including any automatic annual increase in that retirement pension).

The firefighter is also entitled to a child's disability benefit of $20 a month for each natural or legally adopted unmarried child less than age 18 dependent upon the firefighter for support. The total child's disability benefit when added to the occupational disease disability pension shall not exceed 75% of the firefighter's salary at the time of the grant of occupational disease disability pension.

The occupational disease disability pension is payable to the firefighter during the period of the disability. If the disability ceases before the death of the firefighter, the disability pension payable under this Section shall also cease and the firefighter thereafter shall receive such pension benefits as are provided in accordance with other provisions of this Article.

If a firefighter dies while still disabled and receiving a disability pension under this Section, the disability pension shall continue to be paid to the firefighter's survivors in the sequence provided in Section 4-114. A pension previously granted under Section 4-114 to a survivor of a firefighter who died while receiving a disability pension under this Section shall be deemed to be a continuation of the pension provided under this Section and shall be deemed to be in the nature of worker's occupational disease compensation payments. The changes to this Section made by Public Acts 89-136 and 89-168 this amendatory Act of 1995 are intended to be retroactive and are not limited to persons in service on or after their its effective dates date.

The child's disability benefit shall terminate if the disability ceases while the firefighter is alive or when the child or children attain age 18 or marry, whichever event occurs first, except that benefits payable on account of a child under this Section shall not be reduced or terminated by reason of the child's attainment of age 18 if he or she is then dependent by reason of a physical or mental disability but shall continue to be paid as long as such dependency continues. Individuals over the age of 18 and adjudged as a disabled person pursuant to Article XIa of the Probate Act of 1975, except for persons receiving benefits under Article III of the Illinois Public Aid Code, shall be eligible to receive benefits under this Act.

(Source: P.A. 93-1090, eff. 3-11-05.)

(40 ILCS 5/4-111) (from Ch. 108 1/2, par. 4-111)

Sec. 4-111. Disability pension - Not in duty. A firefighter having at least 7 years of creditable service under this Article who becomes disabled as a result of any cause other than an act of duty, and who is found, pursuant to Section 4-112, to be physically or mentally permanently disabled so as to render necessary his or her being placed on disability pension, shall be granted a disability pension of 50% of the monthly salary attached to the rank held by the firefighter in the fire service at the date he or she is removed from the municipality's fire department payroll. If a firefighter dies while still disabled and receiving a disability pension under this Section, the disability pension shall continue to be paid to the firefighter's survivors in the sequence provided in Section 4-114 if that disability pension is greater than the survivors pension provided under subsection (a) of Section 4-114.

(Source: P.A. 93-1090, eff. 3-11-05.)

(40 ILCS 5/4-112) (from Ch. 108 1/2, par. 4-112)

Sec. 4-112. Determination of disability; restoration to active service; disability cannot constitute cause for discharge. A disability pension shall not be paid until disability has been established by the applicable benefit board by examinations of the firefighter at pension fund expense (charged to the account of the applicable municipality) by 3 physicians selected by the benefit board and such other evidence as the benefit board deems necessary. The 3 physicians selected by the benefit board need not agree as to the existence of any disability or the nature and extent of a disability. Medical examination of a firefighter receiving a disability pension shall be made at least once each year prior to attainment of age 50 in order to verify continuance of disability. No examination shall be required after age 50. No physical or mental disability that constitutes, in whole or in part, the basis of an application for benefits under this Article may be used, in whole or in part, by any municipality or fire protection district employing firefighters, emergency medical technicians, or paramedics as cause for discharge.

Upon satisfactory proof to the benefit board that a firefighter on the disability pension has recovered from disability, the benefit board shall terminate the disability pension. The firefighter shall report to the marshal or chief of the fire department, who shall thereupon order immediate reinstatement into active service, and the municipality shall immediately return the firefighter to its payroll, in the same rank or grade held at the date he or she was placed on disability pension. If the firefighter must file a civil action against the municipality to enforce his or her mandated return to payroll under this paragraph, then the firefighter is entitled to recovery of reasonable court costs and attorney's fees.

The firefighter shall be entitled to 10 days' days notice before any hearing or meeting of the benefit board at which the question of his or her disability is to be considered, and shall have the right to be present at any such hearing or meeting, and to be represented by counsel; however, the benefit board shall not have any obligation to provide such fireman with counsel.

(Source: P.A. 95-681, eff. 10-11-07.)

(40 ILCS 5/4-113) (from Ch. 108 1/2, par. 4-113)

Sec. 4-113. Disability pension option.

(a) A firefighter who has not completed 20 years of creditable service under this Article and is receiving a disability pension under this Article whose disability continues for a period which, when added to his or her period of active service under this Article, equals 20 years may, if age 50 or over, elect to retire from the fire service by submitting written application to the benefit board. A firefighter exercising such option shall be entitled to continue to receive a retirement pension equal in amount to the disability pension he or she was entitled to as a disabled firefighter on the date he or she was removed from the municipality's payroll for disability. A firefighter electing to exercise such option shall be entitled to the automatic increase in pension provided under subsection (a) of Section 4-109.1.

(b) A firefighter who is receiving a disability pension under this Article who has sufficient creditable service under this Article to qualify for a retirement pension and is age 50 or more may elect to permanently retire from the fire service at any time by submitting written application to the benefit board. The salary to be used in the determination of such firefighter's pension shall be based on the salary attached to the rank held by the firefighter in the fire service at the date of the election to retire. All other conditions in the computation of the pension shall be based upon the provisions of Section 4-109 which were applicable to the firefighter while he or she was in active service as an employee. A firefighter electing to exercise such option shall be entitled to the automatic increase in pension provided under subsection (a) of Section 4-109.1.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)

Sec. 4-114. Pension to survivors. If a firefighter who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, or (2) from any cause while in receipt of a disability pension under this Article, or (3) during retirement after 20 years of service, or (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, a pension shall be paid to his or her survivors, based on the monthly salary attached to the firefighter's rank on the last day of service in the fire department, as follows:

(a)(1) To the surviving spouse, a monthly pension of 40% of the monthly salary, and if there is a surviving spouse, to the guardian of any minor child or children including a child which has been conceived but not yet born, 12% of such monthly salary for each such child until attainment of age 18 or until the child's marriage, whichever occurs first. Beginning July 1, 1993, the monthly pension to the surviving spouse shall be 54% of the monthly salary for all persons receiving a surviving spouse pension under this Article, regardless of whether the deceased firefighter was in service on or after January 25, 1993 (the effective date of Public Act 87-1265) this amendatory Act of 1993.

(2) Beginning July 1, 2004, unless the amount provided under paragraph (1) of this subsection (a) is greater, the total monthly pension payable under this paragraph (a), including any amount payable on account of children, to the surviving spouse of a firefighter who died (i) while receiving a retirement pension, (ii) while he or she was a deferred pensioner with at least 20 years of creditable service, or (iii) while he or she was in active service having at least 20 years of creditable service, regardless of age, shall be no less than 100% of the monthly retirement pension earned by the deceased firefighter at the time of death, regardless of whether death occurs before or after attainment of age 50, including any increases under Section 4-109.1. This minimum applies to all such surviving spouses who are eligible to receive a surviving spouse pension, regardless of whether the deceased firefighter was in service on or after the effective date of Public Act 87-1265 this amendatory Act of the 93rd General Assembly, and notwithstanding any limitation on maximum pension under paragraph (d) or any other provision of this Article.

(3) If the pension paid on and after July 1, 2004 to the surviving spouse of a firefighter who died on or after July 1, 2004 and before January 25, 1993 (the effective date of Public Act 87-1265) this amendatory Act of the 93rd General Assembly was less than the minimum pension payable under paragraph (1) or (2) of this subsection (a), the fund shall pay a lump sum equal to the difference within 90 days after that the effective date of this amendatory Act of the 93rd General Assembly.

The pension to the surviving spouse shall terminate in the event of the surviving spouse's remarriage prior to July 1, 1993; remarriage on or after that date does not affect the surviving spouse's pension, regardless of whether the deceased firefighter was in service on or after the effective date of Public Act 87-1265 this amendatory Act of 1993.

The surviving spouse's pension shall be subject to the minimum established in Section 4-109.2.

(b) Upon the death of the surviving spouse leaving one or more minor children, or upon the death of a firefighter leaving one or more minor children but no surviving spouse, to the duly appointed guardian of each such child, for support and maintenance of each such child until the child reaches age 18 or marries, whichever occurs first, a monthly pension of 20% of the monthly salary.

In a case where the deceased firefighter left one or more minor children but no surviving spouse and the guardian of a child is receiving a pension of 12% of the monthly salary on August 16, 2013 (the effective date of Public Act 98-391), the pension is increased by Public Act 98-391 to 20% of the monthly salary for each such child, beginning on the pension payment date occurring on or next following August 16, 2013. The changes to this Section made by Public Act 98-391 apply without regard to whether the deceased firefighter was in service on or after August 16, 2013.

(c) If a deceased firefighter leaves no surviving spouse or unmarried minor children under age 18, but leaves a dependent father or mother, to each dependent parent a monthly pension of 18% of the monthly salary. To qualify for the pension, a dependent parent must furnish satisfactory proof that the deceased firefighter was at the time of his or her death the sole supporter of the parent or that the parent was the deceased's dependent for federal income tax purposes.

(d) The total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 75% of the monthly salary of the deceased firefighter (1) when paid to the survivor of a firefighter who has attained 20 or more years of service credit and who receives or is eligible to receive a retirement pension under this Article, or (2) when paid to the survivor of a firefighter who dies as a result of illness or accident, or (3) when paid to the survivor of a firefighter who dies from any cause while in receipt of a disability pension under this Article, or (4) when paid to the survivor of a deferred pensioner. For all other survivors of deceased firefighters, the total pension provided under paragraphs (a), (b) and (c) of this Section shall not exceed 50% of the retirement annuity the firefighter would have received on the date of death.

The maximum pension limitations in this paragraph (d) do not control over any contrary provision of this Article explicitly establishing a minimum amount of pension or granting a one-time or annual increase in pension.

(e) If a firefighter leaves no eligible survivors under paragraphs (a), (b) and (c), the Fund, in accordance with the findings of the benefit board if applicable, shall refund to the firefighter's estate the amount of his or her accumulated contributions, less the amount of pension payments, if any, made to the firefighter while living.

(f) (Blank).

(g) If a judgment of dissolution of marriage between a firefighter and spouse is judicially set aside subsequent to the firefighter's death, the surviving spouse is eligible for the pension provided in paragraph (a) only if the judicial proceedings are filed within 2 years after the date of the dissolution of marriage and within one year after the firefighter's death and the benefit board is made a party to the proceedings. In such case the pension shall be payable only from the date of the court's order setting aside the judgment of dissolution of marriage.

(h) Benefits payable on account of a child under this Section shall not be reduced or terminated by reason of the child's attainment of age 18 if he or she is then dependent by reason of a physical or mental disability but shall continue to be paid as long as such dependency continues. Individuals over the age of 18 and adjudged as a disabled person pursuant to Article XIa of the Probate Act of 1975, except for persons receiving benefits under Article III of the Illinois Public Aid Code, shall be eligible to receive benefits under this Act.

(i) Beginning January 1, 2000, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1994 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

(j) Beginning July 1, 2004, the pension of the surviving spouse of a firefighter who dies on or after January 1, 1988 as a result of sickness, accident, or injury incurred in or resulting from the performance of an act of duty or from the cumulative effects of acts of duty shall not be less than 100% of the salary attached to the rank held by the deceased firefighter on the last day of service, notwithstanding subsection (d) or any other provision of this Article.

Notwithstanding any other provision of this Article, if a person who first becomes a firefighter under this Article on or after January 1, 2011 and who is not receiving a disability pension under Section 4-110 or 4-110.1 dies (1) as a result of any illness or accident, (2) from any cause while in receipt of a disability pension under this Article, (3) during retirement after 20 years service, (4) while vested for or in receipt of a pension payable under subsection (b) of Section 4-109, or (5) while a deferred pensioner, having made all required contributions, then a pension shall be paid to his or her survivors in the amount of 66 2/3% of the firefighter's earned pension at the date of death. Nothing in this Section shall act to diminish the survivor's benefits described in subsection (j) of this Section.

Notwithstanding any other provision of this Article, the monthly pension of a survivor of a person who first becomes a firefighter under this Article on or after January 1, 2011 shall be increased on the January 1 after attainment of age 60 by the recipient of the survivor's pension and each January 1 thereafter by 3% or one-half the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's pension. If the annual unadjusted percentage change in the consumer price index-u for a 12-month period ending in September is zero or, when compared with the preceding period, decreases, then the survivor's pension shall not be increased.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the Board of the Fund and the benefit boards of the pension funds.

(Source: P.A. 98-391, eff. 8-16-13; 98-756, eff. 7-16-14.)

(40 ILCS 5/4-116) (from Ch. 108 1/2, par. 4-116)

Sec. 4-116. Refund.

(a) A firefighter with less than 20 years of service who (1) resigns or is discharged, or has been involuntarily laid off for other than disciplinary reasons for more than 180 calendar days, and (2) has not received any disability pension payments, is entitled to a refund of his or her total contributions during such service. Any firefighter receiving a refund under this Section forfeits and relinquishes all accrued rights in the Fund, including accumulated creditable service.

(b) In the event of reemployment in the service of a participating municipality after receiving a refund under this Section, the firefighter shall, prior to commencing service, repay to the Fund fund, to the extent that the municipality has not made such repayment contribution on his or her behalf, the amount of any refund which he or she received upon resigning or being discharged. Upon repayment of this refund, the firefighter shall receive credit for the previous years of service for which he or she had received the refund.

(c) Beginning January 1, 2021 (the consolidation date), refunds under this Section shall be payable and repayable with respect to all of the firefighter's service under this Article rather than just the service related to a particular municipality (except as may be otherwise determined by the Board in the case of a person receiving benefits under Section 4-109.3), and shall be attributed to the appropriate municipal accounts and reserves.

(Source: P.A. 84-1039.)

(40 ILCS 5/4-117) (from Ch. 108 1/2, par. 4-117)

Sec. 4-117. Reentry into active service.

(a) Except as provided in subsection (d), if If a firefighter receiving pension payments under this Article enters or re-enters reenters active service as a firefighter with any participating municipality, all of the firefighter's pension payments under this Article shall be suspended while he or she is in service. If the firefighter again retires or is discharged, his or her monthly pension shall be resumed in the same amount as was paid upon first retirement or discharge unless he or she remained in active service 3 or more years after re-entry, in which case the monthly pension shall be based on the salary attached to the firefighter's rank at the date of last retirement.

(b) If a deferred pensioner re-enters active service as a firefighter with any participating municipality, and again retires or is discharged from the fire service, his or her pension shall be based on the salary attached to the rank held in the fire service at the date of earlier retirement, unless the firefighter remains in active service for 3 or more years after re-entry, in which case the monthly pension shall be based on the salary attached to the firefighter's rank at the date of last retirement.

(c) If a pensioner or deferred pensioner re-enters or is recalled to active service as a firefighter with any participating municipality and is thereafter injured, and the injury is not related to an injury for which he or she was previously receiving a disability pension, the 3 year service requirement shall not apply in order for the firefighter to qualify for the increased pension based on the rate of pay at the time of the new injury.

(d) In the case of a return to service by a firefighter who is subject to Section 4-109.3 and receives or is eligible to receive one or more retirement pensions determined under that Section:

(1) the return to service is subject to subsection (j) of Section 4-109.3;

(2) the return to service is also subject to the 3-year limitation on the use of increased salary under this Section; and

(3) the suspension requirements of this Section do apply to any retirement pension payable under Section 4-109.3 that is based on service with the municipality under which the firefighter has returned to service, but do not apply to any other retirement pension payable under Section 4-109.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

Sec. 4-118. Financing; tax.

(a) The governing body city council or the board of trustees of a participating the municipality shall annually levy a tax upon all the taxable property of the municipality at the rate on the dollar which will produce the amounts required under Section 4-118.3. an amount which, when added to the deductions from the salaries or wages of firefighters and revenues available from other sources, will equal a sum sufficient to meet the annual actuarial requirements of the pension fund, as determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or municipality. For the purposes of this Section, the annual actuarial requirements of the pension fund are equal to (1) the normal cost of the pension fund, or 17.5% of the salaries and wages to be paid to firefighters for the year involved, whichever is greater, plus (2) an annual amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2040, as annually updated and determined by an enrolled actuary employed by the Illinois Department of Insurance or by an enrolled actuary retained by the pension fund or the municipality. In making these determinations, the required minimum employer contribution shall be calculated each year as a level percentage of payroll over the years remaining up to and including fiscal year 2040 and shall be determined under the projected unit credit actuarial cost method. The amount to be applied towards the amortization of the unfunded accrued liability in any year shall not be less than the annual amount required to amortize the unfunded accrued liability, including interest, as a level percentage of payroll over the number of years remaining in the 40 year amortization period.

(a-5) (Blank). For purposes of determining the required employer contribution to a pension fund, the value of the pension fund's assets shall be equal to the actuarial value of the pension fund's assets, which shall be calculated as follows:

(1) On March 30, 2011, the actuarial value of a pension fund's assets shall be equal to the market value of the assets as of that date.

(2) In determining the actuarial value of the pension fund's assets for fiscal years after March 30, 2011, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(b) The tax shall be levied and collected in the same manner as the general taxes of the municipality, and shall be in addition to all other taxes now or hereafter authorized to be levied upon all property within the municipality, and in addition to the amount authorized to be levied for general purposes, under Section 8-3-1 of the Illinois Municipal Code or under Section 14 of the Fire Protection District Act. The tax shall be forwarded directly to the treasurer of the Fund board within 30 business days of receipt by the county (or, in the case of amounts added to the tax levy under subsection (f), used by the municipality to pay the employer contributions required under subsection (b-1) of Section 15-155 of this Code).

(b-5) If a participating municipality fails to transmit to the Fund fund contributions required of it under this Article for more than 90 days after the payment of those contributions is due, the Fund fund may, after giving notice to the municipality, certify to the State Comptroller the amounts of the delinquent payments in accordance with any applicable rules of the Comptroller, and the Comptroller must, beginning in fiscal year 2016, deduct and remit to the Fund, for credit to the account of the municipality, fund the certified amounts or a portion of those amounts from the following proportions of payments of State funds to the municipality:

(1) in fiscal year 2016, one-third of the total amount of any payments of State funds to the municipality;

(2) in fiscal year 2017, two-thirds of the total amount of any payments of State funds to the municipality; and

(3) in fiscal year 2018 and each fiscal year thereafter, the total amount of any payments of State funds to the municipality.

The State Comptroller may not deduct from any payments of State funds to the municipality more than the amount of delinquent payments certified to the State Comptroller by the Fund fund.

(c) The Board board shall make available to the membership and the general public for inspection and copying at reasonable times the most recent Actuarial Valuation Balance Sheet and Tax Levy Requirement issued to the Fund fund by the Department of Insurance.

(d) (Blank). The firefighters' pension fund shall consist of the following moneys which shall be set apart by the treasurer of the municipality: (1) all moneys derived from the taxes levied hereunder; (2) contributions by firefighters as provided under Section 4-118.1; (3) all rewards in money, fees, gifts, and emoluments that may be paid or given for or on account of extraordinary service by the fire department or any member thereof, except when allowed to be retained by competitive awards; and (4) any money, real estate or personal property received by the board.

(e) (Blank). For the purposes of this Section, "enrolled actuary" means an actuary: (1) who is a member of the Society of Actuaries or the American Academy of Actuaries; and (2) who is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974, or who has been engaged in providing actuarial services to one or more public retirement systems for a period of at least 3 years as of July 1, 1983.

(f) The corporate authorities of a municipality that employs a person who is described in subdivision (d) of Section 4-106 may add to the tax levy otherwise provided for in this Section an amount equal to the projected cost of the employer contributions required to be paid by the municipality to the State Universities Retirement System under subsection (b-1) of Section 15-155 of this Code.

(g) (Blank). The Commission on Government Forecasting and Accountability shall conduct a study of all funds established under this Article and shall report its findings to the General Assembly on or before January 1, 2013. To the fullest extent possible, the study shall include, but not be limited to, the following:

(1) fund balances;

(2) historical employer contribution rates for each fund;

(3) the actuarial formulas used as a basis for employer contributions, including the actual assumed rate of return for each year, for each fund;

(4) available contribution funding sources;

(5) the impact of any revenue limitations caused by PTELL and employer home rule or non-home rule status; and

(6) existing statutory funding compliance procedures and funding enforcement mechanisms for all municipal pension funds.

(Source: P.A. 99-8, eff. 7-9-15.)

(40 ILCS 5/4-118.1) (from Ch. 108 1/2, par. 4-118.1)

Sec. 4-118.1. Contributions by firefighters.

(a) Beginning January 1, 1976 and until August 6, 1999 (the effective date of Public Act 91-466) this amendatory Act of the 91st General Assembly, each firefighter shall contribute to the pension fund 6 3/4% of salary towards the cost of his or her pension. Beginning August 6, 1999 on the effective date of this amendatory Act of the 91st General Assembly, each firefighter shall contribute to the pension fund 6.955% of salary towards the cost of his or her pension.

(b) In addition, beginning January 1, 1976, each firefighter shall contribute 1% of salary toward the cost of the increase in pension provided in Section 4-109.1; beginning January 1, 1987, such contribution shall be 1.5% of salary; beginning July 1, 2004, the contribution shall be 2.5% of salary.

(c) Beginning on July 1, 2004 (the effective date of Public Act 93-689) this amendatory Act of the 93rd General Assembly, each firefighter who elects to receive a pension under Section 4-109.3 and who has participated in at least one other pension fund under this Article for a period of at least one year shall contribute an additional 1.0% of salary toward the cost of the increase in pensions provided in Section 4-109.3; except that beginning January 1, 2021, however, no additional contributions shall be paid under this subsection (c).

In the event that a firefighter does not elect to receive a retirement pension provided under Section 4-109.3 from one or more of the pension funds under this Article in which the firefighter has credit, he or she shall, upon withdrawal from the last pension fund as defined in Section 4-109.3, be entitled to receive, from each such fund to which he or she has paid additional contributions under this subsection (c) and from which he or she does not receive a refund under Section 4-116, a refund of those contributions without interest. Beginning January 1, 2021, however, such refunds shall be payable from the Downstate Firefighters Pension Fund and chargeable to the appropriate municipal accounts and reserves.

A refund of total contributions to a particular firefighter pension fund under Section 4-116 shall include any refund of additional contributions paid to that fund under this subsection (c), but a firefighter who accepts a refund from a pension fund under Section 4-116 is thereafter ineligible to receive a pension provided under Section 4-109.3 from that fund. A firefighter who meets the eligibility requirements of Section 4-109.3 may receive a pension under Section 4-109.3 from any pension fund from which the firefighter has not received a refund under Section 4-116 or under this subsection (c); except that beginning January 1, 2021 (the consolidation date), such pensions shall be payable from the Downstate Firefighters Pension Fund as provided in Section 4-109.3 and chargeable to the appropriate municipal accounts and reserves.

(d) "Salary" means the annual salary, including longevity, attached to the firefighter's rank, as established by the municipality appropriation ordinance, including any compensation for overtime which is included in the salary so established, but excluding any "overtime pay", "holiday pay", "bonus pay", "merit pay", or any other cash benefit not included in the salary so established.

(e) The contributions shall be deducted and withheld from the salary of firefighters.

(Source: P.A. 93-689, eff. 7-1-04.)

(40 ILCS 5/4-118.3 new)

Sec. 4-118.3. Contributions by participating municipalities.

(a) Each participating municipality shall make payment to the Fund as follows:

(1) municipality contributions in an amount determined by applying the municipality contribution rate to each payment of earnings paid to each of its participating firefighters;

(2) an amount equal to the employee contributions provided by Section 4-118.1, whether or not the employee contributions are withheld as permitted by that Section;

(3) all accounts receivable, together with interest charged thereon as provided in Section 4-130.2;

(4) if it has no participating firefighters with current earnings, an amount payable that, over a closed period of 20 years, will amortize, at the prescribed rate for that year, any unfunded obligation, which unfunded obligation shall be computed as provided in paragraph (2) of subsection (b); and

(5) if it has a negative balance in its municipal reserve, the greater of (A) an amount payable that, over a period of 20 years, will amortize at the prescribed rate for that year any unfunded obligation, computed as provided in paragraph (2) of subsection (b), or (B) the amount required by paragraph (1) of this subsection (a).

(b) A separate municipality contribution rate shall be determined for each calendar year for all participating municipalities. The municipality contribution rate shall be the sum of the following percentages:

(1) The percentage of earnings of all the participating firefighters of all participating municipalities that, if paid over the entire period of their service, will be sufficient, when combined with all employee contributions available for the payment of benefits, to provide all annuities for participating firefighters, such percentage to be known as the normal cost rate.

(2) The percentage of earnings of the participating firefighters of each participating municipality necessary to adjust for the difference between (i) the present value of all benefits, excluding disability and death benefits, to be provided for its participating firefighters, and (ii) the sum of its accumulated municipality contributions and the accumulated employee contributions and the present value of expected future employee and municipality contributions pursuant to paragraph (1) of this subsection (b). This adjustment shall be spread over the remainder of a period determined by the Board, not to exceed 30 years.

(3) The percentage of earnings of the participating firefighters of all participating municipalities necessary to provide the present value of all disability benefits granted during the most recent year for which information is available.

(4) The percentage of earnings necessary to meet any deficiency arising in the terminated municipality reserve.

(c) Computations of municipality contribution rates for the following calendar year shall be made prior to the beginning of each year, from the information available at the time the computations are made, and on the assumption that the firefighters in each participating municipality at such time will continue in service until the end of such calendar year at their respective rates of earnings at such time.

(d) Each participating municipality shall make the contributions in the amounts provided in this Section in the manner prescribed from time to time by the Board, and all such contributions shall be obligations of the respective participating municipalities to this Fund. The failure to deduct any employee contributions shall not relieve the participating municipality of its obligation to this Fund. Delinquent payments of contributions due under this Section may, with interest, be recovered by civil action against the delinquent municipality. Municipality contributions, other than the amount necessary for employee contributions, for periods of service by employees from whose earnings no deductions were made for employee contributions to the Fund, may be charged to the municipal reserve for the municipality.

(40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)

Sec. 4-120. Reserves. The Board board shall establish and maintain a reserve to insure the payment of all obligations incurred under this Article. The reserve to be accumulated shall be equal to the estimated total actuarial requirements of the Fund.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-121) (from Ch. 108 1/2, par. 4-121)

Sec. 4-121. Board of Trustees and benefit boards created.

(a) Until January 1, 2021 (the consolidation date):

(1) There is created in each municipality or fire protection district a board of trustees to be known as the "Board of Trustees of the Firefighters' Pension Fund". Except as provided in subdivision (2), the The membership of the board for each municipality shall be, respectively, as follows: in cities, the treasurer, clerk, marshal or chief officer of the fire department, and the comptroller if there is one, or if not, the mayor; in each township, village or incorporated town, the president of the municipality's board of trustees, the village or town clerk, village or town attorney, village or town treasurer, and the chief officer of the fire department; and in each fire protection district, the president and other 2 members of its board of trustees and the marshal or chief of its fire department or service, as the case may be; and in all the municipalities above designated 3 additional persons chosen from their active firefighters and one other person who has retired under the Firemen's Pension Fund Act of 1919, or this Article.

The Notwithstanding any provision of this Section to the contrary, the term of office of each member of a board established on or before the 3rd Monday in April, 2006 shall terminate on the 3rd Monday in April, 2006, but all incumbent members shall continue to exercise all of the powers and be subject to all of the duties of a member of the board until all the new members of the board take office.

(2) Beginning on the 3rd Monday in April, 2006 and until January 1, 2021, the board of trustees of the pension fund for each participating municipality or fire protection district shall consist of 5 members. Two members of the board shall be appointed by the mayor or president of the board of trustees of the municipality or fire protection district involved. Two members of the board shall be active participants of the pension fund who are elected from the active participants of the fund. One member of the board shall be a person who is retired under the Firemen's Pension Fund Act of 1919 or this Article who is elected from persons retired under the Firemen's Pension Fund Act of 1919 or this Article.

Beginning January 1, 2021, the provisions of this subdivision (2) shall apply to the membership of the benefit board of a participating municipality, rather than the board of trustees of its pre-consolidation pension fund.

For the purposes of this Section, a firefighter receiving a disability pension shall be considered a retired firefighter. In the event that there are no retired firefighters under the Fund or if none is willing to serve on the board, then an additional active firefighter shall be elected to the board in lieu of the retired firefighter that would otherwise be elected.

If the regularly constituted fire department of a municipality is dissolved and Section 4-106.1 is not applicable, the board shall continue to exist and administer the Fund so long as there continues to be any annuitant or deferred pensioner in the Fund. In such cases, elections shall continue to be held as specified in this Section, except that: (1) deferred pensioners shall be deemed to be active members for the purposes of such elections; (2) any otherwise unfillable positions on the board, including ex officio positions, shall be filled by election from the remaining firefighters and deferred pensioners of the Fund, to the extent possible; and (3) if the membership of the board falls below 3 persons, the Illinois Director of Insurance or his designee shall be deemed a member of the board, ex officio.

(b) On January 1, 2021, the board of trustees of each individual firefighters' pension fund is converted to the pension benefit determination and payment board of the applicable municipality. The benefit board shall operate and be administered as prescribed in this Section, Sections 4-101, 4-101.1, 4-101.2, 4-109.4, and 4-121.5, and the other applicable provisions of this Code.

The initial benefit board of each participating municipality shall be comprised of the members of the board of trustees serving on December 31, 2020. Thereafter, the board shall be comprised of members as described in subdivision (2) of subsection (a) of this Section, subject to and selected in the manner prescribed in subsections (b-1) through (b-4) of this Section.

(b-1) The members of a benefit board chosen from the active and retired firefighters of the municipality shall be elected by ballot at elections to be held on the 3rd Monday in April of the applicable years under the Australian ballot system, at such place or places, in the municipality, and under such regulations as shall be prescribed by the Board board.

No person shall cast more than one vote for each candidate for whom he or she is eligible to vote. In the elections for benefit board members to be chosen from the active firefighters, all active firefighters of the municipality and no others may vote. In the elections for benefit board members to be chosen from retired firefighters, the retired firefighters of the municipality and no others may vote.

Each member of the benefit board so elected shall hold office for a term of 3 years and until his or her successor has been duly elected and has qualified.

The benefit board shall canvass the ballots and declare which persons have been elected and for what term or terms respectively. In case of a tie vote between 2 or more candidates, the benefit board shall determine by lot which candidate or candidates have been elected and for what term or terms respectively. In the event of the failure, resignation, or inability to act of any benefit board member, a successor shall be elected for the unexpired term at a special election called by the benefit board and conducted in the same manner as a regular election.

(b-2) Benefit board members shall not receive or have any right to receive any salary from the Fund for services performed as benefit board members, but shall be reimbursed for any reasonable expenses incurred in attending meetings of the benefit board or performing duties on behalf of the Fund, and for the amount of any earnings withheld by the participating municipality because of attendance at any benefit board meeting.

(b-3) The benefit board shall elect annually from among its members a president and secretary of the benefit board.

(b-4) With respect to performing its duties under this Article, a benefit board has the powers and duties specified in this Article or delegated to it by the Board of Trustees, including those specified in Sections 4-109.4 and 4-121.5.

In addition, the members of the boards of trustees serving on December 31, 2020 may continue to exercise the powers of that office until March 1, 2021 for the sole purpose of assisting in the consolidation of their respective pension funds, but subject to the supervision and requirements of the Transition Board.

(c) Beginning January 1, 2021, and until the Board established under subsection (d) has been elected and assumes its duties, the Transition Board established under Section 4-101.1 shall operate as the Board of Trustees of the Fund.

(d) Beginning January 1, 2022, or as soon thereafter as it is able to assume its duties, the Board of Trustees of the Downstate Firefighters Pension Fund shall consist of 8 members. The Board shall consist of representatives of various groups as follows:

(1) Four trustees shall each be a chief executive officer, chief finance officer, or other officer, executive, or department head of a participating municipality, and each such trustee shall be designated as an executive trustee.

(2) Three trustees shall each be a firefighter participating in the Fund, and each such trustee shall be designated as a firefighter trustee. No person shall be eligible to become a firefighter trustee who does not have at least 8 years of creditable service in the Fund.

(3) One trustee shall be a retired firefighter of the Fund, who shall be designated the annuitant trustee. No person shall be eligible to become an annuitant trustee who does not have at least 8 years of creditable service in the Fund. For the purposes of this Section and Section 4-121.2, a firefighter receiving a disability pension shall be considered a retired firefighter.

Beginning January 1, 2021, elections for executive trustees shall be conducted in accordance with Section 4-121.1 and elections for firefighter and annuitant trustees shall be conducted in accordance with Section 4-121.2.

(e) An executive or firefighter trustee shall be disqualified immediately upon any change in status that removes the trustee from the required employment or office within the group he or she represents. The annuitant trustee shall be disqualified upon termination or suspension of his or her retirement or disability pension.

The Board shall fill any vacancy by appointment of a person with the appropriate employment status for the period until the next election of trustees, or, if the remaining term is less than 2 years, for the remainder of the term, and until a successor has been elected and has qualified.

(f) The Board board shall elect annually from its members a president and secretary.

(g) Trustees Board members shall not receive or have any right to receive any salary from the Fund a pension fund for services performed as Board board members, but shall be reimbursed for any reasonable expenses incurred in attending meetings of the Board or performing duties on behalf of the Fund, and for the amount of any earnings withheld by the participating municipality because of attendance at any Board meeting.

(h) Each trustee shall be entitled to one vote on any and all actions before the Board. At least 5 concurring votes shall be necessary for every decision or action by the Board at any of its meetings. No decision or action shall become effective unless presented and so approved at a regular or duly called special meeting of the Board.

(Source: P.A. 100-201, eff. 8-18-17.)

(40 ILCS 5/4-121.1 new)

Sec. 4-121.1. Election of executive trustees.

(a) Beginning January 1, 2021, the election of executive trustees shall be conducted in accordance with this Section.

(b) During the period beginning on August 1 and ending on September 15 of each year, the Board shall accept nominations of candidates for election as executive trustees for terms beginning on the next January 1 and for vacancies to be filled by election.

All nominations for the position of executive trustee shall be by petition, signed by a representative of the governing body of at least 10 participating municipalities.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, pursuant to the rules and procedures established by the Board.

All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order upon the proper ballot. In the initial election, there shall be one election for the 4 executive trusteeships, and the 4 candidates getting the highest number of votes shall be declared elected.

(d) The governing body of each municipality participating in the Fund shall have one vote at any election in which an executive trustee is to be elected and may cast that vote for any candidate on the executive trustee ballot.

A vote may be cast for a person not on the ballot by writing in his or her name.

In case of a tie vote, the candidate employed by the municipality having the greatest number of participating firefighters at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the year. The results shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each executive trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except that the initial executive trustees shall serve for terms of one, 2, 3, or 4 years, as determined by lot at the first meeting of the Board.

(40 ILCS 5/4-121.2 new)

Sec. 4-121.2. Election of firefighter and annuitant trustees.

(a) Beginning January 1, 2021, the election of firefighter and annuitant trustees shall be conducted in accordance with this Section. The annuitant trustee shall be elected in an election separate from the election for firefighter trustees.

(b) During the period beginning on August 1 and ending on September 15 of each applicable year, the Board shall accept nominations of candidates for election as firefighter or annuitant trustees for terms beginning on the next January 1, and for vacancies to be filled by election.

All nominations for the position of firefighter trustee shall be by petition, signed by at least 100 active firefighters participating in the Fund. All nominations for the position of annuitant trustee shall be by petition, signed by at least 50 annuitants of the Fund.

(c) The election shall be by ballot and may be conducted in person, by mail, or electronically, pursuant to the rules and procedures established by the Board.

All candidates properly nominated in petitions received by the Board shall be placed in alphabetical order on the proper ballot. In the initial election, there shall be one election for the 3 firefighter trusteeships, and the 3 candidates getting the highest number of votes shall be declared elected.

(d) No person shall cast more than one vote for each candidate for whom he or she is eligible to vote. In elections for board members to be chosen from the active firefighters, all active firefighters and no others may vote. In elections for board members to be chosen from retired firefighters, the retired firefighters and no others may vote.

In case of a tie vote, the candidate currently (or in the case of an annuitant trustee, formerly) employed by the municipality having the greatest number of participating firefighters at the time of the election shall be declared elected.

(e) The election shall be completed by December 1 of the year. The result shall be entered in the minutes of the meeting of the Board following the tally of votes.

(f) Each trustee so elected shall hold office for a term of 4 years and until his or her successor has been duly elected and qualified, except that the initial firefighter trustees shall serve for terms of one, 2, or 3 years, as determined by lot at the first meeting of the Board.

(40 ILCS 5/4-121.3 new)

Sec. 4-121.3. Board meetings. The Board shall hold regular meetings at least 4 times each year and special meetings at such other times as may be called by the executive director upon written notice of at least 3 trustees. At least 4 days' notice of each meeting shall be given to each trustee. All meetings of the Board shall be open to the public (although portions of meetings may be closed when necessary to preserve confidentiality as provided by law) and shall be held in the offices of the Board or in any other place specifically designated in the notice of the meeting.

(40 ILCS 5/4-121.5 new)

Sec. 4-121.5. Benefit board powers and duties; determination of benefits; meetings.

(a) Subject to the limitations provided in this Article and the oversight and direction of the Board of Trustees, the benefit board of each participating municipality shall have the following powers and duties:

(1) The benefit board of a participating municipality shall operate as the agent of the Downstate Firefighters Pension Fund for the purposes of maintaining records necessary for determining, granting, and paying benefits under this Article arising from the employment of firefighters by that municipality. The benefit board shall provide copies of those records to the Board as it may direct.

(2) The benefit board of a participating municipality shall hear and decide all applications for pensions and other benefits under this Article that are based exclusively on service with that municipality (including any military or other service credit arising under Section 4-108, 4-108.4, or 4-108.5 that is not duplicative or based on service with any other municipality), and shall order and direct the payment of those pensions and other benefits.

All decisions of the benefit board relating to eligibility for or the amount of a benefit or the granting of a benefit shall be subject to oversight and review as provided in Section 4-121.6 and shall be promptly submitted to the Board in the form and manner, and with any records or documentation, that the Board may require.

(3) The benefit board of a participating municipality, acting as payment agent for the Fund, shall pay all pensions and other benefits under this Article based solely on service with that municipality (including any military or other service credit arising under Section 4-108, 4-108.4, or 4-108.5 that is not duplicative or based on service with any other municipality) from an account of the Fund designated by the Board for that purpose. Such payments shall be charged to the appropriate accounts and reserves of the municipality.

(4) The benefit board of a participating municipality may pay all necessary expenses of the benefit board in the manner directed by, and subject to any restrictions or oversight imposed by, the Board of Trustees.

(5) The benefit board of a participating municipality shall be governed by and shall operate in accordance with the rules, standards, and procedures of the Fund and shall be subject to review and oversight by the Board. Any rules of the former pension fund that are in effect on December 31, 2021 shall be deemed to be repealed by operation of law on January 1, 2021 (the consolidation date).

(6) The benefit board of a participating municipality may compel witnesses to attend and testify before it upon all matters connected with carrying out the benefit board's duties under this Article, in the manner provided by law for the taking of testimony before the circuit court. The president or any member of the benefit board may administer oaths to witnesses.

(7) The benefit board of a participating municipality shall make and maintain a record of all of its meetings and proceedings.

(8) The benefit board of a participating municipality, acting as agent of the Fund, shall also have any powers or duties that may be delegated to it by the Board of Trustees.

(b) Notwithstanding subsection (a) of this Section (but subject to the exception in subsection (d) of Section 4-109.4 governing persons already receiving multiple pensions under Section 4-109.3), benefits granted on or after January 1, 2021 (the consolidation date) based on service under more than one participating municipality shall be determined and granted directly by the Board of the Fund with the cooperation and assistance of the benefit boards of the affected municipalities, rather than by those benefit boards acting individually as agents of the Fund. Such benefits shall be paid directly by the Fund rather than the individual benefit boards, unless otherwise directed by the Board, and shall be chargeable to the appropriate municipal accounts and reserves, as determined by the Board.

(c) The benefit board shall hold regular meetings as necessary throughout the year, and special meetings when called by the president upon written request of at least 3 members. At least 4 days' notice of each meeting shall be given to each member. All meetings of the benefit board shall be open to the public (although portions of meetings may be closed when necessary to preserve confidentiality as provided by law) and may be held in the offices of the benefit board or in any other place specifically designated in the notice of the meeting.

(40 ILCS 5/4-121.6 new)

Sec. 4-121.6. Oversight of benefit boards.

(a) The benefit board of a participating municipality shall operate as the agent of the Downstate Firefighters Pension Fund for the purposes set forth in this Article. The powers and duties of the benefit board shall be limited to matters relating to the firefighters of that participating municipality.

(b) All decisions and actions of a benefit board, acting as agent of the Fund, shall be subject to oversight and review by the Fund. Such oversight may be provided directly by the Board of Trustees, or by the executive director or other officials of the Fund at the Board's direction.

(c) The Board shall establish a benefit determination review process.

(1) The review process may require a benefit board to promptly submit to the Fund for review a record of all official decisions and actions of the benefit board, in a specified form and manner and with any records or documentation that the Board may require.

(2) The review process may specify a period of time for the routine review of decisions and actions of a benefit board relating to eligibility for or the amount of a benefit or the granting of a benefit.

(3) The review process may provide for the Board to assume control of the benefit determination process in any instance in which the Board determines that the benefit board may have failed to correctly apply or implement the rules, standards, or procedures of the Fund.

(4) The review process may provide that if, by the end of the routine review period, the Fund does not determine that the benefit board may have failed to correctly apply or implement the rules, standards, or procedures of the Fund, and the Board does not assume control of the benefit determination process, then the action or determination of the benefit board shall be deemed to be approved.

(c) The Board of the Fund may adopt rules, standards, and procedures relating to the benefit determination review process and its oversight of benefit boards under this Article.

(d) The Fund and the Board may each take any action that it may deem appropriate to correct a problem that is discovered in the course of the oversight process; however, (1) mistakes in benefits encountered in the review process are subject to the requirements of Section 4-138.10, and (2) administrative review of final administrative decisions is subject to the requirements of Section 4-139.

(40 ILCS 5/4-122) (from Ch. 108 1/2, par. 4-122)

Sec. 4-122. Powers and duties of the Board of Trustees board. The Board of Trustees board shall have the powers and duties stated in Sections 4-123 through 4-129.1, in addition to the other powers and duties provided under this Article. The benefit board of a participating municipality, acting as agent of the Board of the Fund, shall perform certain duties of the Board on its behalf and subject to its oversight, as specified in this Article.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)

Sec. 4-123. To control and manage the Pension Fund. In accordance with the applicable provisions of Articles 1 and 1A and this Article, to control and manage the Downstate Firefighters Pension Fund. , exclusively, the following:

For the purpose of assisting in the creation and administration of the Downstate Firefighters Pension Fund, the Board and the Transition Board may enter into contracts or other agreements with the Board of Trustees of the Illinois Municipal Retirement Fund to provide mutual assistance or to consolidate particular services or operations, to the extent consistent with their respective fiduciary and other responsibilities.

(1) the pension fund,

(2) investment expenditures and income, including interest dividends, capital gains, and other distributions on the investments, and

(3) all money donated, paid, assessed, or provided by law for the pensioning of disabled and retired firefighters, their surviving spouses, minor children, and dependent parents.

All money received or collected shall be credited by the treasurer of the municipality to the account of the pension fund and held by the treasurer of the municipality subject to the order and control of the board. The treasurer of the municipality shall maintain a record of all money received, transferred, and held for the account of the board.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/4-124) (from Ch. 108 1/2, par. 4-124)

Sec. 4-124. To enforce contributions. To assess each firefighter the contributions required under Section 4-118.1. The contributions deducted from salaries, together with all interest accruing thereon, shall be paid promptly placed by the treasurer of the municipality as ex officio treasurer of the board, to the treasurer or custodian credit of the Fund pension fund, subject to the order of the board.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-125) (from Ch. 108 1/2, par. 4-125)

Sec. 4-125. To hear and determine applications and to order payments; required payment dates. To hear and decide all applications for pensions and other benefits under this Article and to order and direct the payment of pensions and other benefits; beginning January 1, 2021 (the consolidation date), however, these powers shall be delegated to and exercised by the appropriate benefit board, except with respect to (i) benefits that arise from service as a firefighter under more than one participating municipality and are subject to subsection (b) of Section 4-121.5, and (ii) any instance in which the Board of Trustees rejects the determination or findings of the benefit board and assumes control of the benefit determination in the course of the benefit determination review process.

The first payment for any pension benefit benefits shall be made not later than one month after the final administrative decision granting the benefit benefits are granted. Each such subsequent payment shall be made not later than one month after the date of the latest payment. Benefits Such benefits shall not be prepaid.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-127.1 new)

Sec. 4-127.1. To authorize municipality contribution rates and adopt actuarial tables and establish prescribed rates of interest. To authorize municipality contribution rates and adopt actuarial tables and establish prescribed rates of interest.

(40 ILCS 5/4-127.2 new)

Sec. 4-127.2. To establish offices. To establish an office or offices with suitable space for meetings of the Board and for the use of the necessary administrative personnel. All books and records of the Fund shall be kept in such office or offices or in such other places as the Board shall designate for safekeeping.

(40 ILCS 5/4-127.3 new)

Sec. 4-127.3. To appoint an executive director. To appoint an executive director to manage the office and carry out the technical and administrative duties of the Fund.

(40 ILCS 5/4-127.4 new)

Sec. 4-127.4. To appoint an actuary. To appoint an actuary to perform all the necessary actuarial requirements of the Fund.

(40 ILCS 5/4-127.5 new)

Sec. 4-127.5. To obtain additional services. To obtain by employment or by contract such additional actuarial services and such legal, medical, clerical, or other services as are required for the efficient administration of the Fund.

(40 ILCS 5/4-127.6 new)

Sec. 4-127.6. To fix the compensation of employees. To determine and fix the rate of compensation to be paid to the executive director, actuary, auditor, legal or medical counsel, and employees of the Fund.

(40 ILCS 5/4-127.7 new)

Sec. 4-127.7. To have accounts audited. To have the accounts of the Fund audited annually by a certified public accountant approved by the Auditor General.

(40 ILCS 5/4-127.8 new)

Sec. 4-127.8. To establish and maintain a revolving account. To establish and maintain a revolving account in a bank or savings and loan association approved by the State Treasurer as a State depositary and having capital funds, represented by capital, surplus, and undivided profits, of at least $5,000,000, for the purpose of making payments of benefits and administrative expenses. All funds deposited into that account shall be held in the name of the Fund and shall be withdrawn only by a check or draft signed by the president of the Board or the executive director, as the Board may direct, or by the president and treasurer of a benefit board, acting as payment agent for the Fund, in the case of a benefit or administrative expense payable by that benefit board.

In case the person whose signature appears upon a check or draft ceases to hold office after attaching his or her signature but before the delivery thereof to the payee, the signature nevertheless shall be valid and sufficient for all purposes with the same effect as if he or she had remained in office until delivery thereof.

The revolving account shall be created by resolution of the Board. The moneys in the revolving account shall be held and expenditures shall be made by the Fund for the purposes set forth in this Section. The Fund shall reimburse the revolving account for expenditures for such purposes.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in that Section 6 shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

(40 ILCS 5/4-127.9 new)

Sec. 4-127.9. To keep data. To keep in convenient form, determined by the Board of the Fund, the data necessary for all required calculations and valuations as required by the actuary.

(40 ILCS 5/4-127.10 new)

Sec. 4-127.10. To reproduce records. To have any records kept by the Board or a benefit board photographed, microfilmed, or otherwise reproduced on film or in digital format. The reproductions shall be deemed original records and documents for all purposes, including introduction in evidence before all courts and administrative agencies.

(40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)

Sec. 4-128. To invest funds. To invest the assets of the Fund that exceed the amount of cash required for current operations, as determined by the Board, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-113, 1-114, and 1-115 of this Code.

No bank or savings and loan association shall receive investment funds this Section unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in that Section 6 shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

The Board may sell any security belonging to the Fund at any time when, in its judgment, it is necessary or desirable to do so.

The Board shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction.

All investments shall be clearly held and accounted for to indicate ownership by the Board. The Board may direct the registration of securities or the holding of interests in real property in its own name or in the name of a nominee created for the express purpose of registration of securities or the holding of interests in real property by a savings and loan association or national or State bank or trust company authorized to conduct a trust business in the State of Illinois. The Board may hold title to interests in real property in the name of the Fund or in the name of a title holding corporation created for the express purpose of holding title to interests in real property.

Investments shall be carried at cost or at a book value in accordance with generally accepted accounting principles and accounting procedures approved by the Board.

The book value of investments held by any pension fund or retirement system in one or more commingled investment accounts shall be the cost of its units of participation in such commingled account or accounts as recorded on the books of the Board. Beginning January 1, 1998, the board shall invest funds in accordance with Sections 1-113.1 through 1-113.10 of this Code.

(Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/4-130) (from Ch. 108 1/2, par. 4-130)

Sec. 4-130. Custodian. Treasurer of the Board. The Board shall appoint one or more custodians to receive and hold the assets of the Fund on such terms as the Board may agree.

The treasurer of the municipality shall be the treasurer of the board and the custodian of the Fund pension fund, and shall secure and safely keep the Fund's fund's assets, subject to the control and direction of the Board board. The custodian treasurer shall keep books and accounts concerning the Fund fund in such manner as may be prescribed by the Board board. The books and accounts shall be subject to the inspection of the Board board or any member thereof.

The treasurer, within 10 days after his or her election or appointment, shall execute a bond to the municipality, with good and sufficient securities, in such penal sums as the board shall direct, to be approved by the board, conditioned for the faithful performance of the duties of the office, and for the safekeeping and proper accounting of all moneys and property which come to the treasurer; and that on the expiration of his or her term of office all moneys and property of the fund will be turned over to his or her successor.

The bond shall be filed in the office of the clerk of the municipality or in the office of the secretary of the board of trustees of the fire protection district, as the case may be. In case of a breach of the bond, or any of its conditions, suit may be brought thereon in the name of the municipality for the use of the board, or of any person or persons injured by such breach.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-130.1 new)

Sec. 4-130.1. Deposit and disposition of funds.

(a) All money received by the Board shall immediately be deposited with the custodian for the account of the Fund. All payments from the accounts of the Fund shall be made by the custodian only, and only by a check or draft signed by the president of the Board or the executive director, as the board may direct. Such checks and drafts shall be drawn only upon proper authorization by the Board, as properly recorded in the official minute books of the meetings of the Board.

(b) In the course of consolidation, all securities of the Fund when received shall be deposited with the custodian, which shall hold and account for them as required by the Board and provided by law.

(c) The assets of the Fund shall be invested as one fund, and no particular person or municipality shall have any right in any specific security or in any item of cash other than an undivided interest in the whole.

(d) If a participating municipality terminates participation because it fails to meet the requirements of Section 4-103, it shall pay to the Fund the amount equal to any net debit balance in its municipal account and any account receivable. Its successors, assigns, and transferees of its assets shall be obligated to make this payment to the extent of the value of assets transferred to them. The Fund shall pay an amount equal to any net credit balance to the participating municipality or its successors or assigns. Any remaining net debit or credit balance not collectible or payable shall be transferred to a terminated municipality reserve. The Fund shall pay to each firefighter of the participating municipality an amount equal to his or her credits in the employee reserves. The employees shall have no further rights to any benefits from the Fund, except that annuities awarded prior to the date of termination shall continue to be paid.

(40 ILCS 5/4-130.2 new)

Sec. 4-130.2. Earnings and interest.

(a) Balances at the beginning of each year that remain in employee reserves at the end of the year shall be credited with interest annually at the prescribed rate.

(b) Municipal reserves shall be charged or credited, as the case may be, with interest at the prescribed rate applied to the balance therein at the beginning of the year.

(c) Municipal accounts receivable shall be charged with interest at a rate of 1% per month on the balance therein unpaid one month or more. The unpaid balance shall include charges established retroactively because of failure of the municipality to report amounts that should be receivable. Credit balances shall be disregarded in this calculation.

(d) The annuity and disability benefit reserves shall be credited with interest at the prescribed rate at the end of each year. For purposes of this computation, the prescribed rate shall be applied to the balances therein at the beginning of the year.

(e) Amounts credited or charged under subsection (a), (b), (c), or (d) of this Section shall be charged or credited to the earnings and experience variation reserve. Any remaining balance shall be transferred to the municipal reserves in proportion to present values of the annuities of the annuitants of each participating municipality plus the balance in their municipal reserve.

(f) The Board shall fix the rate of interest to be charged on back or reinstatement contributions.

(40 ILCS 5/4-130.3 new)

Sec. 4-130.3. Authorizations.

(a) Each participating municipality shall:

(1) deduct all normal and additional contributions from each payment of earnings payable to each participating firefighter who is entitled to any earnings from the municipality, and remit all normal and additional contributions immediately to the Board; and

(2) pay to the Board all contributions required by this Article.

(b) Each participating firefighter shall, by virtue of the payment of contributions to this Fund, receive a vested interest in the benefits provided in this Article and in consideration of such vested interest shall be deemed to have agreed to and authorized the deduction from earnings of all contributions payable to this Fund in accordance with this Article.

(c) Payment of earnings less the amount of contributions provided in this Article shall be a full and complete discharge of all claims for payment for services rendered by a firefighter during the period covered by such payment.

(40 ILCS 5/4-130.4 new)

Sec. 4-130.4. Executive director. The executive director shall be in charge of the general administration of the Fund and shall have such special powers and duties as may be properly delegated or assigned by the Board from time to time.

The executive director's general administrative duties shall include: the computation of the amounts of benefits, service credits, and contributions required for reinstatement of credits for Board consideration; the processing of approved benefit claims and expenses of administration for payment; the placing of any and all matters before the Board that require action or are in the interest of the Board or the Fund; the preparation and maintenance of necessary and proper records for administrative and actuarial purposes; the conduct of any necessary or desirable communications in the course of the operations of the Fund; and the carrying out of any actions of the Board that are so delegated.

With respect to any of these general duties that are delegated to benefit boards as agents of the Fund, the executive director's duty shall include providing direction and oversight to the benefit boards, evaluating their performance, and informing the Board of matters of interest or concern that may arise with respect to the operation or circumstances of any benefit board.

(40 ILCS 5/4-130.5 new)

Sec. 4-130.5. Actuary.

(a) The actuary shall be the technical advisor of the Board. In addition to general advice, the actuary shall specifically be responsible for and shall make a general investigation, at least once every 3 years, of the experience of the participating municipalities as to mortality, disability, retirement, separation, marital status of employees, marriage of surviving spouses, interest, and employee earnings rates, and to make recommendations as a result of any such investigation as to:

(1) the actuarial tables to be used for computing annuities and benefits and for determining the premiums for disability and death benefit purposes;

(2) the tables to be used in any regular actuarial valuations; and

(3) the prescribed rate of interest.

(b) The actuary shall make the computations of municipality obligations and contribution rates (including annual valuations of the liabilities and reserves for present and prospective annuities and benefits) and shall certify to the correctness thereof.

(c) The actuary shall advise the Board on any matters of an actuarial nature affecting the Fund.

(40 ILCS 5/4-131) (from Ch. 108 1/2, par. 4-131)

Sec. 4-131. Payment to the Fund by a municipality Warrants. The mayor or president of the board of trustees and clerk, secretary, or the comptroller, if there be one, and the officer or officers of the municipality, who are authorized by law to draw warrants upon the treasurer of the municipality, upon request made in writing by the Board board, shall draw such warrants, payable to the Fund, treasurer of the board for all funds in the hands of the municipality's treasurer belonging to the Fund pension fund.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-132) (from Ch. 108 1/2, par. 4-132)

Sec. 4-132. Disbursements by benefit boards. Disbursements from the Fund for payment of benefits or administrative expenses may be made by a benefit board, in its capacity as payment agent for the Fund, only by check or draft drawn upon the specific revolving account established by the Board for that purpose. Each such check or draft shall be Payments from the pension fund shall be made by the treasurer of the board only upon warrants signed by the president of the board and countersigned by its secretary. No such check or draft warrant shall be drawn except by order of the benefit board duly entered in the records of the benefit board's proceedings.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-133) (from Ch. 108 1/2, par. 4-133)

Sec. 4-133. Interest on deposits. If the pension fund, or any part thereof, by order of the Board board or otherwise, is deposited in any bank or savings and loan association, or loaned, all interest or money which is paid or agreed to be paid on the loan or deposit shall become a part of the fund. No such loan or deposit shall be made without Board board authorization.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-134) (from Ch. 108 1/2, par. 4-134)

Sec. 4-134. Report for tax levy.

(a) The Board board shall report to the governing body of each participating city council or board of trustees of the municipality on the condition of the Fund pension fund at the end of its most recently completed fiscal year. The report shall be made prior to the council or board meeting held for appropriating and levying taxes for the year for which the report is made.

The pension board in the report shall certify and provide the following information to the city council or board of trustees of the municipality:

(1) the total assets of the Fund fund and the their current market value of those assets;

(2) the estimated receipts during the next succeeding fiscal year from deductions from the salaries or wages of firefighters, and from all other sources;

(3) the estimated amount necessary during the fiscal year to meet the annual actuarial requirements of the pension fund as provided in Section 4-118.3 Sections 4-118 and 4-120;

(4) the total net income received from investment of assets along with the assumed investment return and actual investment return received by the Fund fund during its most recently completed fiscal year compared to the total net income, assumed investment return, and actual investment return received during the preceding fiscal year;

(5) the increase in employer pension contributions that results from the implementation of the provisions of Public Act 93-689 this amendatory Act of the 93rd General Assembly;

(6) the total number of active employees who are financially contributing to the fund;

(7) the total amount that was disbursed in benefits during the fiscal year, including the number of and total amount disbursed to (i) annuitants in receipt of a regular retirement pension, (ii) recipients being paid a disability pension, and (iii) survivors and children in receipt of benefits;

(8) the funded ratio of the Fund fund; and

(9) the unfunded liability carried by the Fund fund, along with an actuarial explanation of the unfunded liability. ; and

(10) the investment policy of the pension board under the statutory investment restrictions imposed on the fund.

Before the Board pension board makes its report, the Fund municipality shall have the assets of the Fund fund and their current market value verified by an independent certified public accountant of its choice.

(b) A participating The municipality is authorized to publish the report submitted under this Section. This publication may be made, without limitation, by publication in a local newspaper of general circulation in the municipality or by publication on the municipality's Internet website. If the municipality publishes the report, then that publication must include all of the information relating to that municipality submitted by the Board pension board under subsection (a).

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/4-135) (from Ch. 108 1/2, par. 4-135)

Sec. 4-135. Benefits; exempt Benefits - Exempt.

(a) All pensions, refunds, and disability pension benefits granted under this Article, and every portion thereof, shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained or levied upon by virtue of any judgment, or any process or proceedings whatsoever issued out of or by any court for the payment and satisfaction in whole or in part of any debt, damage, claim, demand or judgment against a pensioner, refund applicant or other beneficiary hereunder.

(b) No portion of the assets of the Fund pension fund shall, either before or after the Board's a board's order of distribution to any retired firefighter or his or her beneficiaries, be held, seized, taken subject to, or detained or levied on by virtue of any process, injunction interlocutory or other order or judgment, or any process or proceeding whatever issued by any court of this State, for the payment or satisfaction in whole or in part of any debt, damages, claim, demand or judgment against any firefighter or his or her beneficiaries, but the assets of the Fund fund shall be held, secured and distributed for the purposes of pensioning such firefighter and beneficiaries and for no other purposes whatever.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-136.05 new)

Sec. 4-136.05. Accounts. An adequate system of accounts shall be kept in accordance with generally accepted accounting and sound actuarial principles. The accounts and reserves designated in Sections 4-136.1 through 4-136.6, inclusive, shall be maintained.

(40 ILCS 5/4-136.1 new)

Sec. 4-136.1. Employee reserves. Separate reserves shall be maintained for each participating employee in such detail as is necessary to administer all benefits provided in this Article, and to segregate accurately the separate liabilities of each participating municipality with respect to each participating employee.

(40 ILCS 5/4-136.2 new)

Sec. 4-136.2. Municipal reserves.

(a) Except as provided in subsection (b) of this Section, each participating municipality shall be treated as an independent unit within the Fund. Separate municipal reserves shall be maintained in such form and detail as is necessary to show the net accumulated balances of each municipality created or arising under this Article.

(b) In the event that a participating municipality is terminated and its obligations are not assumed or transferred by law to another municipality, any net debit or credit balance remaining in the reserve account of such municipality shall be transferred to a terminated municipality reserve, which shall be used to fund any future benefits of its employees arising out of service with the terminated municipality.

Any deficiency arising in the terminated municipality reserve shall be eliminated by a contribution by all remaining municipalities at a uniform percent of payroll, to be determined by the Board and collected with other contributions required under Section 4-118.3.

(40 ILCS 5/4-136.3 new)

Sec. 4-136.3. Reserves for annuities.

(a) Appropriate reserves shall be created for payment of all annuities granted under this Article at the time such annuities are granted and in amounts determined to be necessary under actuarial tables adopted by the Board upon recommendation of the actuary of the Fund. All annuities payable shall be charged to the annuity reserve.

(b) Amounts credited to annuity reserves shall be derived by transfer of all the employee credits from the appropriate employee reserves and by charges to the municipal reserve of those municipalities in which the retiring employee has accumulated service. If a retiring employee has accumulated service in more than one participating municipality, the municipality charges for non-concurrent service shall be calculated as follows:

(1) for purposes of calculating the annuity reserve, an annuity shall be calculated based on service and adjusted earnings with each employer (without regard to the vesting requirements contained in Section 4-109.3); and

(2) the difference between the municipality charges for the actual annuity granted and the aggregation of the municipality charges based upon the ratio of each from those calculations to the aggregated total from paragraph (1).

Aggregate municipality charges for concurrent service shall be prorated based on the employee's earnings.

(c) Supplemental annuity, if any, shall be handled as a separate annuity and amounts to be credited to the annuity reserve shall be derived in the same manner as a regular annuity.

(d) When a retirement annuity is granted to an employee with a spouse eligible for a surviving spouse annuity, there shall be credited to the annuity reserve an amount to fund the cost of both the retirement and surviving spouse annuity as a joint and survivors annuity.

(e) All annuity reserves shall be revalued annually as of December 31. Any adjustment required therein by such revaluation shall be charged or credited to the earnings and experience variation reserve.

(f) The excess in the annuity reserve shall be transferred to the municipal reserves. An amount equal to the deficiency in the reserve of participating municipalities that have no participating employees shall be allocated to their reserves. The remainder shall be allocated in amounts proportionate to the present value of annuities of annuitants of the remaining participating municipalities.

(40 ILCS 5/4-136.4 new)

Sec. 4-136.4. Reserves for disability benefits. A disability benefit reserve shall be created for payment of all disability benefits.

(1) Amounts to fund the cost of total and permanent disability benefits shall be established at the time such benefits are granted under actuarial tables adopted by the Board upon recommendation of the actuary of the Fund. All total and permanent disability benefits payable shall be charged to this reserved amount.

(2) Temporary disability benefit payments shall be charged to the disability benefit reserve when made.

(3) Amounts credited to the disability benefit reserve shall be derived from municipality contributions made pursuant to paragraph (3) of subsection (b) of Section 4-118.3.

(4) The disability benefit reserve shall be revalued annually as of December 31. Any adjustment required in the disability benefit reserve by such revaluation shall be charged or credited to the earnings and experience variation reserve.

(40 ILCS 5/4-136.5 new)

Sec. 4-136.5. Reserve for Variation in Benefit Payments.

(a) A Reserve for Variation in Benefit Payments may be established.

(b) Credits to the Reserve shall consist of:

(1) Any employee contributions, not in excess of $10, received by the Fund subsequent to claim for and payment of a separation refund; provided, however, that upon request of any employee rightfully entitled thereto, the aforesaid amount shall be paid to the employee from this Reserve.

(2) Any benefit checks or warrants issued and outstanding more than 2 years.

(3) Any balances in employee or municipal reserves that are not properly creditable to those reserves.

(c) Charges to the Reserve shall consist of:

(1) Benefit claims properly payable under this Article, the reserves for which have been previously transferred to this reserve or for which no reserves exist.

(2) Benefit overpayments deemed uncollectible by the Board.

(3) Amounts required to adjust employee or municipal reserves to the correct balance.

(40 ILCS 5/4-136.6 new)

Sec. 4-136.6. Earnings and experience variation reserve. One earnings and experience variation reserve shall be maintained. Moneys in abolished reserve accounts shall be transferred to the earnings and experience variation reserve. Excess or deficiencies in the annuity and disability benefit reserves shall be charged or credited to this reserve. Whenever a balance exists in this reserve, it shall be included in the basis used for determining the prescribed interest rate. The balance in the reserve shall be distributed as of the end of each year, but a contingency balance of not more than twice the projected interest requirement for the next year may be maintained. If the balance ever exceeds twice the projected requirement, the excess shall be distributed to municipal reserves.

If the Board determines that the funds available in this reserve, after required transfers, will not be sufficient to provide administrative expenses of the Fund, the Board may include in the municipality contribution rate authorized by Section 4-118.3 a percentage of earnings on the earnings of all participating employees to provide an amount required for the administrative expenses.

Upon adoption of generally accepted accounting procedures that allow for the recognition of unrealized gains or losses in market value, those gains or losses shall be allocated to employer accounts, including the earnings and experience variation reserve, in the same proportion those accounts were to total assets prior to the implementation of market value accounting.

(40 ILCS 5/4-138.5)

Sec. 4-138.5. Fraud. Any person, member, trustee, or employee of the Board or a benefit board board who knowingly makes any false statement or falsifies or permits to be falsified any record of a fund in any attempt to defraud such fund as a result of such act, or intentionally or knowingly defrauds a fund in any manner, is guilty of a Class A misdemeanor.

(Source: P.A. 95-950, eff. 8-29-08.)

(40 ILCS 5/4-138.10)

Sec. 4-138.10. Mistake in benefit.

(a) If the Fund commits a mistake by setting any benefit at an incorrect amount, it shall adjust the benefit to the correct level as soon as may be practicable after the mistake is discovered.

The term "mistake" includes a clerical or administrative error executed by the Fund (or by a benefit board acting as agent of the Fund or by a former pension fund that has been consolidated into the Fund) or by the participant as it relates to a benefit under this Article; however, in no case shall "mistake" include any benefit as it relates to the reasonable calculation of the benefit or aspects of the benefit based on salary, service credit, calculation or determination of a disability, date of retirement, or other factors significant to the calculation of the benefit that were reasonably understood or agreed to by the Fund (or by a benefit board acting as agent of the Fund or by a former pension fund that has been consolidated into the Fund) at the time of retirement.

(b) If the benefit was mistakenly set too low, the Fund shall make a lump sum payment to the recipient of an amount equal to the difference between the benefits that should have been paid and those actually paid, plus interest at the rate prescribed by the Public Pension Division of the Department of Insurance from the date the unpaid amounts accrued to the date of payment.

(c) If the benefit was mistakenly set too high, the Fund may recover the amount overpaid from the recipient thereof, either directly or by deducting such amount from the remaining benefits payable to the recipient as is indicated by the recipient. If the overpayment is recovered by deductions from the remaining benefits payable to the recipient, the monthly deduction shall not exceed 10% of the corrected monthly benefit unless otherwise indicated by the recipient.

However, if (i) the amount of the benefit was mistakenly set too high, and (ii) the error was undiscovered for 3 years or longer, and (iii) the error was not the result of fraud committed by the affected participant or beneficiary, then upon discovery of the mistake the benefit shall be adjusted to the correct level, but the recipient of the benefit need not repay to the Fund the excess amounts received in error.

(d) Adjustments and repayments of benefit mistakes shall be charged or credited to the appropriate municipal accounts and reserves.

(Source: P.A. 98-1117, eff. 8-26-14.)

(40 ILCS 5/4-139) (from Ch. 108 1/2, par. 4-139)

Sec. 4-139. Administrative review.

(a) Except as it relates to any time limitation to correct a mistake as provided in Section 4-138.10, the provisions of the Administrative Review Law, and all amendments and modifications thereof and the rules adopted pursuant thereto, shall apply to and govern all proceedings for the judicial review of final administrative decisions of the Board, of a benefit board acting as agent of the Fund, or of a former pension fund that has been consolidated into the Fund, as retirement board provided for under this Article.

(b) The term "administrative decision" is as defined in Section 3-101 of the Code of Civil Procedure. For purposes of administrative review, "final administrative decision" refers to:

(1) the final administrative decision of the benefit board in the case of a benefit that arises from service as a firefighter under only one participating municipality, unless the Board of Trustees rejects the benefit determination or findings of the benefit board and assumes control of the benefit determination in the course of the benefit determination review process;

(2) the final administrative decision of the Board of Trustees, in the case of (i) a benefit that arises from service as a firefighter under more than one participating municipality and is subject to subsection (b) of Section 4-121.5, or (ii) any instance in which the Board of Trustees rejects the benefit determination or findings of the benefit board and assumes control of the benefit determination in the course of the benefit determination review process; or

(3) the final administrative decision of the board of a former pension fund that has been consolidated into the Fund, in the case of a decision that occurred before January 1, 2021 (the consolidation date).

(Source: P.A. 98-1117, eff. 8-26-14.)

(40 ILCS 5/4-141) (from Ch. 108 1/2, par. 4-141)

Sec. 4-141. Referendum in municipalities less than 5,000. This Article shall become effective in any municipality of less than 5,000, population if the proposition to adopt the Article is submitted to and approved by the voters of the municipality in the manner herein provided.

Whenever the electors of the municipality equal in number to 5% of the number of legal votes cast at the last preceding general municipal election for mayor or president, as the case may be, petition the corporate authorities of the municipality to submit the proposition whether that municipality shall adopt this Article, the municipal clerk shall certify the proposition to the proper election official who shall submit it to the electors in accordance with the general election law at the next succeeding regular election in the municipality. If the proposition is not adopted at that election, it may be submitted in like manner at any regular election thereafter.

The proposition shall be substantially in the following form:

-------------------------------------------------------------

Shall the city (or village or incorporated town as the case may YES be) of .... adopt Article 4 of the "Illinois Pension Code", providing for --------------

participation in the Downstate Firefighters a Firefighters' Pension Fund NO and the levying of an annual tax therefor?

-------------------------------------------------------------

If a majority of the votes cast on the proposition is for the proposition, this Article is adopted in that municipality.

The consolidation of firefighters' pension funds under this Article and the changes to this Section made by this amendatory Act of the 100th General Assembly do not invalidate any previous referendum under this Section. Every such referendum adopted before January 1, 2021 that provides for the creation of a pension fund under this Article shall be deemed to also authorize participation in the Downstate Firefighters Pension Fund created under this Article.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-142) (from Ch. 108 1/2, par. 4-142)

Sec. 4-142. Applicability of home rule powers. A home rule unit, as defined in Article VII of the 1970 Illinois Constitution or any amendment thereto, shall have no power to change, alter, or amend in any way the provisions of this Article. A home rule unit which is a municipality, as defined in Section 4-103, shall not provide for, singly or as a part of any plan or program, by any means whatsoever, any type of retirement or annuity benefit to a firefighter other than through the Downstate Firefighters Pension Fund establishment of a fund as provided in this Article, as now or hereafter amended.

(Source: P.A. 83-1440.)

(40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)

Sec. 7-109. Employee.

(1) "Employee" means any person who:

(a) 1. Receives earnings as payment for the performance of personal services or official duties out of the general fund of a municipality, or out of any special fund or funds controlled by a municipality, or by an instrumentality thereof, or a participating instrumentality, including, in counties, the fees or earnings of any county fee office; and

2. Under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee with a municipality, or any instrumentality thereof, or a participating instrumentality, including aldermen, county supervisors and other persons (excepting those employed as independent contractors) who are paid compensation, fees, allowances or other emolument for official duties, and, in counties, the several county fee offices.

(b) Serves as a township treasurer appointed under the School Code, as heretofore or hereafter amended, and who receives for such services regular compensation as distinguished from per diem compensation, and any regular employee in the office of any township treasurer whether or not his earnings are paid from the income of the permanent township fund or from funds subject to distribution to the several school districts and parts of school districts as provided in the School Code, or from both such sources; or is the chief executive officer, chief educational officer, chief fiscal officer, or other employee of a Financial Oversight Panel established pursuant to Article 1H of the School Code, other than a superintendent or certified school business official, except that such person shall not be treated as an employee under this Section if that person has negotiated with the Financial Oversight Panel, in conjunction with the school district, a contractual agreement for exclusion from this Section.

(c) Holds an elective office in a municipality, instrumentality thereof or participating instrumentality.

(2) "Employee" does not include persons who:

(a) Are eligible for inclusion under any of the following laws:

1. "An Act in relation to an Illinois State Teachers' Pension and Retirement Fund", approved May 27, 1915, as amended;

2. Articles 15 and 16 of this Code.

However, such persons shall be included as employees to the extent of earnings that are not eligible for inclusion under the foregoing laws for services not of an instructional nature of any kind.

However, any member of the armed forces who is employed as a teacher of subjects in the Reserve Officers Training Corps of any school and who is not certified under the law governing the certification of teachers shall be included as an employee.

(b) Are designated by the governing body of a municipality in which a pension fund is required by law to participate in a pension fund be established for policemen or firemen, respectively, as performing police or fire protection duties, except that when such persons are the heads of the police or fire department and are not eligible to be included within any such pension fund, they shall be included within this Article; provided, that such persons shall not be excluded to the extent of concurrent service and earnings not designated as being for police or fire protection duties. However, (i) any head of a police department who was a participant under this Article immediately before October 1, 1977 and did not elect, under Section 3-109 of this Act, to participate in a police pension fund shall be an "employee", and (ii) any chief of police who became a participating employee under this Article before January 1, 2019 and who elects to participate in this Fund under Section 3-109.1 of this Code, regardless of whether such person continues to be employed as chief of police or is employed in some other rank or capacity within the police department, shall be an employee under this Article for so long as such person is employed to perform police duties by a participating municipality and has not lawfully rescinded that election.

(c) Are contributors to or eligible to contribute to a Taft-Hartley pension plan to which the participating municipality is required to contribute as the person's employer based on earnings from the municipality. Nothing in this paragraph shall affect service credit or creditable service for any period of service prior to the effective date of this amendatory Act of the 98th General Assembly, and this paragraph shall not apply to individuals who are participating in the Fund prior to the effective date of this amendatory Act of the 98th General Assembly.

(d) Become an employee of any of the following participating instrumentalities on or after the effective date of this amendatory Act of the 99th General Assembly: the Illinois Municipal League; the Illinois Association of Park Districts; the Illinois Supervisors, County Commissioners and Superintendents of Highways Association; an association, or not-for-profit corporation, membership in which is authorized under Section 85-15 of the Township Code; the United Counties Council; or the Will County Governmental League.

(3) All persons, including, without limitation, public defenders and probation officers, who receive earnings from general or special funds of a county for performance of personal services or official duties within the territorial limits of the county, are employees of the county (unless excluded by subsection (2) of this Section) notwithstanding that they may be appointed by and are subject to the direction of a person or persons other than a county board or a county officer. It is hereby established that an employer-employee relationship under the usual common law rules exists between such employees and the county paying their salaries by reason of the fact that the county boards fix their rates of compensation, appropriate funds for payment of their earnings and otherwise exercise control over them. This finding and this amendatory Act shall apply to all such employees from the date of appointment whether such date is prior to or after the effective date of this amendatory Act and is intended to clarify existing law pertaining to their status as participating employees in the Fund.

(Source: P.A. 99-830, eff. 1-1-17; 100-281, eff. 8-24-17.)

(40 ILCS 5/7-139.10)

Sec. 7-139.10. Transfer to Article 4 pension fund. A person who has elected under Section 4-108.4 to become an active participant in the Downstate Firefighters Pension Fund or any of its predecessor funds a firefighter pension fund established under Article 4 of this Code may apply for transfer to the Downstate Firefighters Pension Fund that Article 4 fund of his or her creditable service accumulated under this Article for municipal firefighter service. At the time of the transfer, the Fund shall pay to the Downstate Firefighters Pension Fund firefighter pension fund an amount equal to:

(1) the amounts accumulated to the credit of the applicant for municipal firefighter service, including interest;

(2) any interest paid by the applicant in order to reinstate that service; and

(3) the municipality credits based on that service, including interest.

Participation in this fund with respect to the transferred credits shall terminate on the date of transfer.

For the purpose of this Section, "municipal firefighter service" means service with the fire department of a participating municipality for which the applicant established creditable service under this Article.

(Source: P.A. 93-689, eff. 7-1-04.)

(40 ILCS 5/1-113.1 rep.)

(40 ILCS 5/1-113.2 rep.)

(40 ILCS 5/1-113.3 rep.)

(40 ILCS 5/1-113.4 rep.)

(40 ILCS 5/1-113.4a rep.)

(40 ILCS 5/1-113.5 rep.)

(40 ILCS 5/1-113.6 rep.)

(40 ILCS 5/1-113.7 rep.)

(40 ILCS 5/1-113.8 rep.)

(40 ILCS 5/1-113.9 rep.)

(40 ILCS 5/1-113.10 rep.)

(40 ILCS 5/1-113.11 rep.)

(40 ILCS 5/1-113.12 rep.)

(40 ILCS 5/1A-111 rep.)

Section 15. The Illinois Pension Code is amended by repealing Sections 1-113.1, 1-113.2, 1-113.3, 1-113.4, 1-113.4a, 1-113.5, 1-113.6, 1-113.7, 1-113.8, 1-113.9, 1-113.10, 1-113.11, 1-113.12, and 1A-111.

Section 90. The State Mandates Act is amended by adding Section 8.42 as follows:

(30 ILCS 805/8.42 new)

Sec. 8.42. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 100th General Assembly.

Section 99. Effective date. This Act takes effect upon becoming law, except that Sections 10 and 15 take effect January 1, 2021.