(40 ILCS 5/15-125)
(from Ch. 108 1/2, par. 15-125)
"Prescribed Rate of Interest; Effective Rate of Interest".
(1) "Prescribed rate of interest": The rate of interest to be used in
actuarial valuations and in development of actuarial tables as determined
by the board on the basis of the probable average effective rate of
interest on a long term basis.
(2) "Effective rate of interest": The interest rate for all or any part of
a fiscal year that is determined by the board based
on factors including the system's past and expected investment experience;
historical and expected fluctuations in the market value of investments; the
desirability of minimizing volatility in the effective rate of interest from
year to year; and the provision of reserves for anticipated losses upon sales,
redemptions, or other disposition of investments and for variations in interest
experience; except that for the purpose of determining the accumulated normal contributions used in calculating retirement annuities under Rule 2 of Section 15-136, the effective rate of interest shall be determined by the State Comptroller rather than the board. The State Comptroller shall determine the effective rate of interest to be used for this purpose using the factors listed above, and shall certify to the board and the Commission on Government Forecasting and Accountability the rate to be used for this purpose for fiscal year 2006 as soon as possible after the effective date of this amendatory Act of the 94th General Assembly, and for each fiscal year thereafter no later than the January 31 immediately preceding the start of that fiscal year.
(3) The change made to this Section by Public Acts 90-65 and 90-511 is a clarification of existing law.
(Source: P.A. 94-4, eff. 6-1-05; 94-982, eff. 6-30-06.)