101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3990

 

Introduced 1/8/2020, by Rep. Allen Skillicorn

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1A-110
40 ILCS 5/1A-111

    Amends the Regulation of Public Pension Funds Article of the Illinois Pension Code. Requires an actuary who prepares actuarial statements for a pension fund to post a bond in the amount of $2,000,000,000.


LRB101 15982 RPS 65344 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3990LRB101 15982 RPS 65344 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 1A-110 and 1A-111 as follows:
 
6    (40 ILCS 5/1A-110)
7    Sec. 1A-110. Actuarial statements by pension funds
8established under Articles other than 3 or 4.
9    (a) Each pension fund established under an Article of this
10Code other than Article 3 or 4 shall include as part of its
11annual statement a complete actuarial statement applicable to
12the plan year.
13    The actuarial statement shall be filed with the Division
14within 9 months after the close of the fiscal year of the
15pension fund. Any pension fund that fails to file within that
16time is subject to the penalty provisions of Section 1A-113.
17    The board of trustees of each pension fund subject to this
18Section, on behalf of all its participants, shall engage an
19enrolled actuary who shall be responsible for the preparation
20of the materials comprising the actuarial statement. The
21enrolled actuary shall post a bond in the amount of
22$2,000,000,000. The enrolled actuary shall utilize such
23assumptions and methods as are necessary for the contents of

 

 

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1the matters reported in the actuarial statement to be
2reasonably related to the experience of the plan and to
3reasonable expectations, and to represent in the aggregate the
4actuary's best estimate of anticipated experience under the
5plan.
6    The actuarial statement shall include a description of the
7actuarial assumptions and methods used to determine the
8actuarial values in the statement and shall disclose the impact
9of significant changes in the actuarial assumptions and
10methods, plan provisions, and other pertinent factors on the
11actuarial position of the plan.
12    The actuarial statement shall include a statement by the
13enrolled actuary that to the best of his or her knowledge the
14actuarial statement is complete and accurate and has been
15prepared in accordance with generally accepted actuarial
16principles and practice.
17    For the purposes of this Section, "enrolled actuary" means
18an actuary who (1) is a member of the Society of Actuaries or
19the American Academy of Actuaries and (2) either is enrolled
20under Subtitle C of Title III of the Employee Retirement Income
21Security Act of 1974 or was engaged in providing actuarial
22services to a public retirement plan in Illinois on July 1,
231983.
24    (b) The actuarial statement referred to in subsection (a)
25shall include all of the following:
26        (1) The dates of the plan year and the date of the

 

 

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1    actuarial valuation applicable to the plan year for which
2    the actuarial statement is filed.
3        (2) The amount of (i) the contributions made by the
4    participants, and (ii) all other contributions, including
5    those made by the employer or employers.
6        (3) The total estimated amount of the covered
7    compensation with respect to active participants for the
8    plan year for which the statement is filed.
9        (4) The number of (i) active participants, (ii)
10    terminated participants currently eligible for deferred
11    vested pension benefits or the return of contributions made
12    by those participants, and (iii) all other participants and
13    beneficiaries included in the actuarial valuation.
14        (5) The following values as of the date of the
15    actuarial valuation applicable to the plan year for which
16    the statement is filed:
17            (i) The current value of assets accumulated in the
18        plan.
19            (ii) The unfunded accrued liability. The major
20        factors that have resulted in the change in the
21        unfunded accrued liability from the previous year
22        shall be identified. Effects that are individually
23        significant shall be separately identified. As a
24        minimum, the effect of the following shall be shown:
25        plan amendments; changes in actuarial assumptions;
26        experience less (or more) favorable than that assumed;

 

 

HB3990- 4 -LRB101 15982 RPS 65344 b

1        and contributions less (or more) than the normal cost
2        plus interest on the unfunded accrued liability.
3            (iii) The amount of accumulated contributions for
4        active participants (including interest, if any).
5            (iv) The actuarial present value of credited
6        projected benefits for vested participants currently
7        receiving benefits, other vested participants, and
8        non-vested participants.
9        (6) The actuarial value of assets.
10        (7) Any other information that is necessary to fully
11    and fairly disclose the actuarial position of the plan and
12    any other information the enrolled actuary may present.
13        (8) Any other information regarding the plan that the
14    Division may by rule request.
15(Source: P.A. 90-507, eff. 8-22-97.)
 
16    (40 ILCS 5/1A-111)
17    Sec. 1A-111. Actuarial statements by pension funds
18established under Article 3 or 4.
19    (a) Each pension fund established under Article 3 or 4 of
20this Code shall include as part of its annual statement a
21complete actuarial statement applicable to the plan year.
22    If the actuarial statement is prepared by a person other
23than the Department, it shall be filed with the Division within
249 months after the close of the fiscal year of the pension
25fund. Any pension fund that fails to file within that time

 

 

HB3990- 5 -LRB101 15982 RPS 65344 b

1shall be subject to the penalty provisions of Section 1A-113.
2The statement shall be prepared by or under the supervision of
3a qualified actuary, signed by the qualified actuary, and
4contain such information as the Division may by rule require.
5The qualified actuary shall post a bond in the amount of
6$2,000,000,000.
7    (b) For the purposes of this Section, "qualified actuary"
8means (i) a member of the American Academy of Actuaries, or
9(ii) an individual who has demonstrated to the satisfaction of
10the Director that he or she has the educational background
11necessary for the practice of actuarial science and has at
12least 7 years of actuarial experience.
13(Source: P.A. 90-507, eff. 8-22-97.)