(40 ILCS 5/7-208)
(from Ch. 108 1/2, par. 7-208)
Earnings and experience variation reserve.
earnings and experience variation reserve shall be maintained. All other
accounts for this purpose shall be abolished upon the effective date of this
amendatory Act of 1995. Moneys in abolished reserve accounts shall be
transferred to the earnings and experience variation reserve. No more than
one-half of all interest income and earnings on investments of whatever type,
including realized gains on disposition of investments and unrealized
gains in market value, shall be credited thereto. All investment earnings
expense of whatever type, including realized losses on disposition of
investments and unrealized losses in market value, shall be charged
thereto. All administrative expenses directly relating to investments may be
charged thereto. Excess or deficiencies in the annuity and disability reserves
shall be charged or credited to this reserve. Whenever a balance exists in
such reserve, it shall be included in the basis used for determining the
effective 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 municipality 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 7-172 a percentage of earnings on the earnings of
all participating employees to provide an amount required for the
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.
(Source: P.A. 89-136, eff. 7-14-95.)