(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
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(b) Allocate duties among themselves and designate
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| others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.
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(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.
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 retirement system, pension fund, or
investment board shall make its best efforts to ensure that
the racial and ethnic makeup of its senior administrative
staff represents the racial and ethnic makeup of its
membership. Each system, fund, and investment board shall annually review the goals established under this subsection.
(6) 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) 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) 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.
(Source: P.A. 99-462, eff. 8-25-15; 100-391, eff. 8-25-17; 100-902, eff. 8-17-18.)
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(40 ILCS 5/1-110.6)
Sec. 1-110.6. Transactions prohibited by retirement systems; Republic of the Sudan. (a) The Government of the United States has determined that Sudan is a nation that sponsors terrorism and genocide. The General Assembly finds that acts of terrorism have caused injury and death to Illinois and United States residents who serve in the United States military, and pose a significant threat to safety and health in Illinois. The General Assembly finds that public employees and their families, including police officers and firefighters, are more likely than others to be affected by acts of terrorism. The General Assembly finds that Sudan continues to solicit investment and commercial activities by forbidden entities, including private market funds. The General Assembly finds that investments in forbidden entities are inherently and unduly risky, not in the interests of public pensioners and Illinois taxpayers, and against public policy. The General Assembly finds that Sudan's capacity to sponsor terrorism and genocide depends on or is supported by the activities of forbidden entities. The General Assembly further finds and re-affirms that the people of the State, acting through their representatives, do not want to be associated with forbidden entities, genocide, and terrorism.
(b) For purposes of this Section: "Business operations" means maintaining, selling, or leasing equipment, facilities, personnel, or any other apparatus of business or commerce in the Republic of the Sudan, including the ownership or possession of real or personal property located in the Republic of the Sudan. "Certifying company" means a company that (1) directly provides asset management services or advice to a retirement system or (2) as directly authorized or requested by a retirement system (A) identifies particular investment options for consideration or approval; (B) chooses particular investment options; or (C) allocates particular amounts to be invested. If no company meets the criteria set forth in this paragraph, then "certifying company" shall mean the retirement system officer who, as designated by the board, executes the investment decisions made by the board, or, in the alternative, the company that the board authorizes to complete the certification as the agent of that officer.
"Company" is any entity capable of affecting commerce, including but not limited to (i) a government, government agency, natural person, legal person, sole proprietorship, partnership, firm, corporation, subsidiary, affiliate, franchisor, franchisee, joint venture, trade association, financial institution, utility, public franchise, provider of financial services, trust, or enterprise; and (ii) any association thereof. "Division" means the Public Pension Division of the Department of Insurance.
"Forbidden entity" means any of the following: (1) The government of the Republic of the Sudan and |
| any of its agencies, including but not limited to political units and subdivisions;
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(2) Any company that is wholly or partially managed
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| or controlled by the government of the Republic of the Sudan and any of its agencies, including but not limited to political units and subdivisions;
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(3) Any company (i) that is established or organized
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| under the laws of the Republic of the Sudan or (ii) whose principal place of business is in the Republic of the Sudan;
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(4) Any company (i) identified by the Office of
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| Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities in the Republic of the Sudan; or (ii) fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to the Republic of the Sudan that occurred at any time following the effective date of this Act;
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(5) Any publicly traded company that is individually
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| identified by an independent researching firm that specializes in global security risk and that has been retained by a certifying company as provided in subsection (c) of this Section as being a company that owns or controls property or assets located in, has employees or facilities located in, provides goods or services to, obtains goods or services from, has distribution agreements with, issues credits or loans to, purchases bonds or commercial paper issued by, or invests in (A) the Republic of the Sudan; or (B) any company domiciled in the Republic of the Sudan; and
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(6) Any private market fund that fails to satisfy the
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| requirements set forth in subsections (d) and (e) of this Section.
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Notwithstanding the foregoing, the term "forbidden entity" shall exclude (A) mutual funds that meet the requirements of item (iii) of paragraph (13) of Section 1-113.2 and (B) companies that transact business in the Republic of the Sudan under the law, license, or permit of the United States, including a license from the United States Department of the Treasury, and
companies, except agencies of the Republic of the Sudan, who are certified as Non-Government Organizations by the United Nations, or who engage solely in (i) the provision of goods and services intended to relieve human suffering or to promote welfare, health, religious and spiritual activities, and education or humanitarian purposes; or (ii) journalistic activities.
"Private market fund" means any private equity fund, private equity fund of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
"Republic of the Sudan" means those geographic areas of the Republic of Sudan that are subject to sanction or other restrictions placed on commercial activity imposed by the United States Government due to an executive or congressional declaration of genocide.
"Retirement system" means the State Employees' Retirement System of Illinois, the Judges Retirement System of Illinois, the General Assembly Retirement System, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois.
(c) A retirement system shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless, as provided in this Section, a certifying company
certifies to the retirement system that, (1) with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk and (2) 100% of the retirement system's assets for which the certifying company provides services or advice are not and have not been invested or reinvested in any forbidden entity at any time after 4 months after the effective date of this Section.
The certifying company shall make the certification required under this subsection (c) to a retirement system 6 months after the effective date of this Section and annually thereafter. A retirement system shall submit the certifications to the Division, and the Division shall notify the Director of Insurance if a retirement system fails to do so.
(d) With respect to a commitment or investment made pursuant to a written agreement executed prior to the effective date of this Section, each private market fund shall submit to the appropriate certifying company, at no additional cost to the retirement system:
(1) an affidavit sworn under oath in which an
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| expressly authorized officer of the private market fund avers that the private market fund (A) does not own or control any property or asset located in the Republic of the Sudan and (B) does not conduct business operations in the Republic of the Sudan; or
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(2) a certificate in which an expressly authorized
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| officer of the private market fund certifies that the private market fund, based on reasonable due diligence, has determined that, other than direct or indirect investments in companies certified as Non-Government Organizations by the United Nations, the private market fund has no direct or indirect investment in any company (A) organized under the laws of the Republic of the Sudan; (B) whose principal place of business is in the Republic of the Sudan; or (C) that conducts business operations in the Republic of the Sudan. Such certificate shall be based upon the periodic reports received by the private market fund, and the private market fund shall agree that the certifying company, directly or through an agent, or the retirement system, as the case may be, may from time to time review the private market fund's certification process.
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(e) With respect to a commitment or investment made pursuant to a written agreement executed after the effective date of this Section, each private market fund shall, at no additional cost to the retirement system:
(1) submit to the appropriate certifying company an
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| affidavit or certificate consistent with the requirements pursuant to subsection (d) of this Section; or
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(2) enter into an enforceable written agreement with
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| the retirement system that provides for remedies consistent with those set forth in subsection (g) of this Section if any of the assets of the retirement system shall be transferred, loaned, or otherwise invested in any company that directly or indirectly (A) has facilities or employees in the Republic of the Sudan or (B) conducts business operations in the Republic of the Sudan.
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(f) In addition to any other penalties and remedies available under the law of Illinois and the United States, any transaction, other than a transaction with a private market fund that is governed by subsections (g) and (h) of this Section, that violates the provisions of this Act shall be against public policy and voidable, at the sole discretion of the retirement system.
(g) If a private market fund fails to provide the affidavit or certification required in subsections (d) and (e) of this Section, then the retirement system shall, within 90 days, divest, or attempt in good faith to divest, the retirement system's interest in the private market fund, provided that the Board of the retirement system confirms through resolution that the divestment does not have a material and adverse impact on the retirement system. The retirement system shall immediately notify the Division, and the Division shall notify all other retirement systems, as soon as practicable, by posting the name of the private market fund on the Division's Internet website or through e-mail communications. No other retirement system may enter into any agreement under which the retirement system directly or indirectly invests in the private market fund unless the private market fund provides that retirement system with the affidavit or certification required in subsections (d) and (e) of this Section and complies with all other provisions of this Section.
(h) If a private market fund fails to fulfill its obligations under any agreement provided for in paragraph (2) of subsection (e) of this Section, the retirement system shall immediately take legal and other action to obtain satisfaction through all remedies and penalties available under the law and the agreement itself. The retirement system shall immediately notify the Division, and the Division shall notify all other retirement systems, as soon as practicable, by posting the name of the private market fund on the Division's Internet website or through e-mail communications, and no other retirement system may enter into any agreement under which the retirement system directly or indirectly invests in the private market fund.
(i) This Section shall have full force and effect during any period in which the Republic of the Sudan, or the officials of the government of that Republic, are subject to sanctions authorized under any statute or executive order of the United States or until such time as the State Department of the United States confirms in the federal register or through other means that the Republic of the Sudan is no longer subject to sanctions by the government of the United States.
(j) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Section that can be given effect without the invalid provision or application.
(Source: P.A. 103-426, eff. 8-4-23.)
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(40 ILCS 5/1-110.15)
Sec. 1-110.15. Transactions prohibited by retirement systems; Iran.
(a) As used in this Section: "Active business operations" means all business
operations that are not inactive business operations. "Business operations" means engaging in commerce
in any form in Iran, including, but not limited to,
acquiring, developing, maintaining, owning, selling,
possessing, leasing, or operating equipment, facilities,
personnel, products, services, personal property, real
property, or any other apparatus of business or commerce. "Company" means any sole proprietorship,
organization, association, corporation, partnership, joint
venture, limited partnership, limited liability partnership,
limited liability company, or other entity or business
association, including all wholly owned subsidiaries,
majority-owned subsidiaries, parent companies, or affiliates
of those entities or business associations, that exists for
the purpose of making profit. "Direct holdings" in a company means all
securities of that company that are held directly by the
retirement system or in an account or fund in which the retirement system
owns all shares or interests. "Inactive business operations" means the mere
continued holding or renewal of rights to property previously
operated for the purpose of generating revenues but not
presently deployed for that purpose. "Indirect holdings" in a company means all
securities of that company which are held in an account or
fund, such as a mutual fund, managed by one or more persons
not employed by the retirement system, in which the retirement system owns
shares or interests together with other investors not subject
to the provisions of this Section. "Mineral-extraction activities" include exploring,
extracting, processing, transporting, or wholesale selling or
trading of elemental minerals or associated metal alloys or
oxides (ore), including gold, copper, chromium, chromite,
diamonds, iron, iron ore, silver, tungsten, uranium, and zinc. "Oil-related activities" include, but are not
limited to, owning rights to oil blocks; exporting,
extracting, producing, refining, processing, exploring for,
transporting, selling, or trading of oil; and constructing,
maintaining, or operating a pipeline, refinery, or other
oil-field infrastructure. The mere retail sale of gasoline and
related consumer products is not considered an oil-related
activity. "Petroleum resources" means petroleum, petroleum
byproducts, or natural gas. "Private market fund" means any private equity fund, private equity fund of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
"Retirement system" means the State Employees' Retirement System of Illinois, the Judges Retirement System of Illinois, the General Assembly Retirement System, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois. "Scrutinized business operations" means business operations that have caused a company to become a scrutinized company.
"Scrutinized company" means the company has
business operations that involve contracts with or provision
of supplies or services to the Government of Iran, companies
in which the Government of Iran has any direct or indirect
equity share, consortiums or projects commissioned by the
Government of Iran, or companies involved in consortiums or
projects commissioned by the Government of Iran and: (1) more than 10% of the company's revenues produced |
| in or assets located in Iran involve oil-related activities or mineral-extraction activities; less than 75% of the company's revenues produced in or assets located in Iran involve contracts with or provision of oil-related or mineral-extraction products or services to the Government of Iran or a project or consortium created exclusively by that government; and the company has failed to take substantial action; or
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(2) the company has, on or after August 5, 1996, made
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| an investment of $20 million or more, or any combination of investments of at least $10 million each that in the aggregate equals or exceeds $20 million in any 12-month period, that directly or significantly contributes to the enhancement of Iran's ability to develop petroleum resources of Iran.
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"Substantial action" means adopting, publicizing,
and implementing a formal plan to cease scrutinized business
operations within one year and to refrain from any such new
business operations.
(b) Within 90 days after the effective date of this
Section, a retirement system shall make its best efforts to identify all scrutinized companies in which the retirement system has direct or indirect holdings.
These efforts shall include the following, as appropriate in the retirement system's judgment:
(1) reviewing and relying on publicly available
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| information regarding companies having business operations in Iran, including information provided by nonprofit organizations, research firms, international organizations, and government entities;
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(2) contacting asset managers contracted by the
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| retirement system that invest in companies having business operations in Iran; and
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(3) Contacting other institutional investors that
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| have divested from or engaged with companies that have business operations in Iran.
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The retirement system may retain an independent research firm to identify scrutinized companies in which the retirement system has direct or indirect holdings. By the first meeting of the retirement system following
the 90-day period described in this subsection (b), the retirement system
shall assemble all scrutinized companies identified into a
scrutinized companies list.
The retirement system shall update the scrutinized
companies list annually based on evolving information from,
among other sources, those listed in this subsection (b).
(c) The retirement system shall adhere to
the following procedures for companies on the scrutinized
companies list:
(1) The retirement system shall determine the
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| companies on the scrutinized companies list in which the retirement system owns direct or indirect holdings.
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(2) For each company identified in item (1) of this
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| subsection (c) that has only inactive business operations, the retirement system shall send a written notice informing the company of this Section and encouraging it to continue to refrain from initiating active business operations in Iran until it is able to avoid scrutinized business operations. The retirement system shall continue such correspondence semiannually.
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(3) For each company newly identified in item (1) of
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| this subsection (c) that has active business operations, the retirement system shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the retirement system. The notice must inform the company of the opportunity to clarify its Iran-related activities and encourage the company, within 90 days, to cease its scrutinized business operations or convert such operations to inactive business operations in order to avoid qualifying for divestment by the retirement system.
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(4) If, within 90 days after the retirement system's
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| first engagement with a company pursuant to this subsection (c), that company ceases scrutinized business operations, the company shall be removed from the scrutinized companies list and the provisions of this Section shall cease to apply to it unless it resumes scrutinized business operations. If, within 90 days after the retirement system's first engagement, the company converts its scrutinized active business operations to inactive business operations, the company is subject to all provisions relating thereto.
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(d) If, after 90 days following the retirement system's first
engagement with a company pursuant to subsection (c), the
company continues to have scrutinized active business
operations, and only while such company continues to have
scrutinized active business operations, the retirement system shall
sell, redeem, divest, or withdraw all publicly traded
securities of the company, except as provided in paragraph
(f), from the retirement system's assets under management within 12
months after the company's most recent appearance on the
scrutinized companies list.
If a company that ceased scrutinized active
business operations following engagement pursuant to subsection (c) resumes such operations, this subsection (d) immediately
applies, and the retirement system shall send a written notice to
the company. The company shall also be immediately
reintroduced onto the scrutinized companies list.
(e) The retirement system may not acquire
securities of companies on the scrutinized companies list
that have active business operations, except as provided in
subsection (f).
(f) A company that the United States
Government affirmatively declares to be excluded from its
present or any future federal sanctions regime relating to
Iran is not subject to divestment or the investment
prohibition pursuant to subsections (d) and (e).
(g) Notwithstanding the
provisions of this Section, paragraphs (d) and (e) do not apply to
indirect holdings in a private market fund.
However, the retirement system shall submit letters to the managers
of those investment funds containing companies that have
scrutinized active business operations requesting that they
consider removing the companies from the fund or create a
similar actively managed fund having indirect holdings devoid
of the companies. If the manager creates a similar fund, the
retirement system shall replace all applicable investments with
investments in the similar fund in an expedited timeframe
consistent with prudent investing standards.
(h) The retirement system shall file a report with the Public Pension Division of the Department of Insurance that includes the scrutinized companies list
within 30 days after the list is created. This report shall be
made available to the public.
The retirement system shall file an annual report with the Public Pension Division, which shall be made available to the public, that includes all of the following:
(1) A summary of correspondence with companies
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| engaged by the retirement system under items (2) and (3) of subsection (c).
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(2) All investments sold, redeemed, divested, or
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| withdrawn in compliance with subsection (d).
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(3) All prohibited investments under subsection (e).
(4) A summary of correspondence with private market
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| funds notified under subsection (g).
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(i) This Section expires upon the occurrence
of any of the following:
(1) The United States revokes all sanctions imposed
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| against the Government of Iran.
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(2) The Congress or President of the United States
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| declares that the Government of Iran has ceased to acquire weapons of mass destruction and to support international terrorism.
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(3) The Congress or President of the United States,
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| through legislation or executive order, declares that mandatory divestment of the type provided for in this Section interferes with the conduct of United States foreign policy.
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(j) With respect to actions
taken in compliance with this Act, including all good-faith
determinations regarding companies as required by this Act,
the retirement system is exempt from any conflicting statutory or
common law obligations, including any fiduciary duties under this Article and any obligations with
respect to choice of asset managers, investment funds, or
investments for the retirement system's securities portfolios.
(k) Notwithstanding any
other provision of this Section to the contrary, the retirement system
may cease divesting from scrutinized companies
pursuant to subsection (d) or reinvest in
scrutinized companies from which it divested pursuant to
subsection (d) if clear and convincing evidence shows that the value of investments in scrutinized companies with active scrutinized business operations becomes equal to or less than 0.5% of the market value of all assets under management by the retirement system. Cessation of
divestment, reinvestment, or any subsequent ongoing investment
authorized by this Section is limited to the minimum steps
necessary to avoid the contingency set forth in this
subsection (k). For any cessation of divestment, reinvestment, or
subsequent ongoing investment authorized by this Section, the
retirement system shall provide a written report to the Public Pension Division in advance of initial reinvestment, updated
semiannually thereafter as applicable, setting forth the
reasons and justification, supported by clear and convincing
evidence, for its decisions to cease divestment, reinvest, or
remain invested in companies having scrutinized active
business operations. This Section does not apply to reinvestment
in companies on the grounds that they have ceased to have
scrutinized active business operations.
(l) If any provision of this Section or its
application to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of
the Act which can be given effect without the invalid
provision or application, and to this end the provisions of
this Section are severable.
(Source: P.A. 103-426, eff. 8-4-23.)
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(40 ILCS 5/1-110.16) Sec. 1-110.16. Transactions prohibited by retirement systems; companies that boycott Israel, for-profit companies that contract to shelter migrant children, Iran-restricted companies, Sudan-restricted companies, expatriated entities, companies that are domiciled or have their principal place of business in Russia or Belarus, and companies that are subject to Russian Harmful Foreign Activities Sanctions. (a) As used in this Section: "Boycott Israel" means engaging in actions that are |
| politically motivated and are intended to penalize, inflict economic harm on, or otherwise limit commercial relations with the State of Israel or companies based in the State of Israel or in territories controlled by the State of Israel.
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"Company" means any sole proprietorship,
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| organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of those entities or business associations, that exist for the purpose of making profit.
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|
"Company that is subject to Russian Harmful Foreign
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| Activities Sanctions" means a company that is subject to sanctions under the Russian Harmful Foreign Activities Sanctions Regulations (31 CFR Part 587), any Presidential Executive Order imposing sanctions against Russia, or any federal directive issued pursuant to any such Executive Order.
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|
"Contract to shelter migrant children" means entering
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| into a contract with the federal government to shelter migrant children under the federal Unaccompanied Alien Children Program or a substantially similar federal program.
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|
"Direct holdings" in a company means all publicly
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| traded securities of that company that are held directly by the retirement system in an actively managed account or fund in which the retirement system owns all shares or interests.
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|
"Expatriated entity" has the meaning ascribed to it
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| in Section 1-15.120 of the Illinois Procurement Code.
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|
"Illinois Investment Policy Board" means the board
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| established under subsection (b) of this Section.
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|
"Indirect holdings" in a company means all securities
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| of that company that are held in an account or fund, such as a mutual fund, managed by one or more persons not employed by the retirement system, in which the retirement system owns shares or interests together with other investors not subject to the provisions of this Section or that are held in an index fund.
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|
"Iran-restricted company" means a company that meets
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| the qualifications under Section 1-110.15 of this Code.
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|
"Private market fund" means any private equity fund,
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| private equity funds of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
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|
"Restricted companies" means companies that boycott
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| Israel, for-profit companies that contract to shelter migrant children, Iran-restricted companies, Sudan-restricted companies, expatriated entities, companies that are domiciled or have their principal place of business in Russia or Belarus, and companies that are subject to Russian Harmful Foreign Activities Sanctions.
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|
"Retirement system" means a retirement system
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| established under Article 2, 14, 15, 16, or 18 of this Code or the Illinois State Board of Investment.
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|
"Sudan-restricted company" means a company that meets
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| the qualifications under Section 1-110.6 of this Code.
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|
(b) There shall be established an Illinois Investment Policy Board. The Illinois Investment Policy Board shall consist of 7 members. Each board of a pension fund or investment board created under Article 15, 16, or 22A of this Code shall appoint one member, and the Governor shall appoint 4 members. The Governor shall designate one member of the Board as the Chairperson.
(b-5) The term of office of each member appointed by the Governor, who is serving on the Board on June 30, 2022, is abolished on that date. The terms of office of members appointed by the Governor after June 30, 2022 shall be as follows: 2 initial members shall be appointed for terms of 2 years, and 2 initial members shall be appointed for terms of 4 years. Thereafter, the members appointed by the Governor shall hold office for 4 years, except that any member chosen to fill a vacancy occurring otherwise than by expiration of a term shall be appointed only for the unexpired term of the member whom he or she shall succeed. Board members may be reappointed. The Governor may remove a Governor's appointee to the Board for incompetence, neglect of duty, malfeasance, or inability to serve.
(c) Notwithstanding any provision of law to the contrary, beginning January 1, 2016, Sections 1-110.15 and 1-110.6 of this Code shall be administered in accordance with this Section.
(d) By April 1, 2016, the Illinois Investment Policy Board shall make its best efforts to identify all Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel and assemble those identified companies into a list of restricted companies, to be distributed to each retirement system.
These efforts shall include the following, as appropriate in the Illinois Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
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| information regarding Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel, including information provided by nonprofit organizations, research firms, and government entities;
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|
(2) contacting asset managers contracted by the
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| retirement systems that invest in Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel;
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|
(3) contacting other institutional investors that
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| have divested from or engaged with Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel; and
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|
(4) retaining an independent research firm to
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| identify Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel.
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|
The Illinois Investment Policy Board shall review the list of restricted companies on a quarterly basis based on evolving information from, among other sources, those listed in this subsection (d) and distribute any updates to the list of restricted companies to the retirement systems and the State Treasurer.
By April 1, 2018, the Illinois Investment Policy Board shall make its best efforts to identify all expatriated entities and include those companies in the list of restricted companies distributed to each retirement system and the State Treasurer. These efforts shall include the following, as appropriate in the Illinois Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
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| information regarding expatriated entities, including information provided by nonprofit organizations, research firms, and government entities;
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|
(2) contacting asset managers contracted by the
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| retirement systems that invest in expatriated entities;
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|
(3) contacting other institutional investors that
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| have divested from or engaged with expatriated entities; and
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|
(4) retaining an independent research firm to
|
| identify expatriated entities.
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|
By July 1, 2022, the Illinois Investment Policy Board shall make its best efforts to identify all for-profit companies that contract to shelter migrant children and include those companies in the list of restricted companies distributed to each retirement system. These efforts shall include the following, as appropriate in the Illinois Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
|
| information regarding for-profit companies that contract to shelter migrant children, including information provided by nonprofit organizations, research firms, and government entities;
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|
(2) contacting asset managers contracted by the
|
| retirement systems that invest in for-profit companies that contract to shelter migrant children;
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|
(3) contacting other institutional investors that
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| have divested from or engaged with for-profit companies that contract to shelter migrant children; and
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|
(4) retaining an independent research firm to
|
| identify for-profit companies that contract to shelter migrant children.
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|
No later than 6 months after the effective date of this amendatory Act of the 102nd General Assembly, the Illinois Investment Policy Board shall make its best efforts to identify all companies that are domiciled or have their principal place of business in Russia or Belarus and companies that are subject to Russian Harmful Foreign Activities Sanctions and include those companies in the list of restricted companies distributed to each retirement system. These efforts shall include the following, as appropriate in the Illinois Investment Policy Board's judgment:
(1) reviewing and relying on publicly available
|
| information regarding companies that are domiciled or have their principal place of business in Russia or Belarus and companies that are subject to Russian Harmful Foreign Activities Sanctions, including information provided by nonprofit organizations, research firms, and government entities;
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|
(2) contacting asset managers contracted by the
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| retirement systems that invest in companies that are domiciled or have their principal place of business in Russia or Belarus and companies that are subject to Russian Harmful Foreign Activities Sanctions;
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|
(3) contacting other institutional investors that
|
| have divested from or engaged with companies that are domiciled or have their principal place of business in Russia or Belarus and companies that are subject to Russian Harmful Foreign Activities Sanctions; and
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|
(4) retaining an independent research firm to
|
| identify companies that are domiciled or have their principal place of business in Russia or Belarus and companies that are subject to Russian Harmful Foreign Activities Sanctions.
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|
(e) The Illinois Investment Policy Board shall adhere to the following procedures for companies on the list of restricted companies:
(1) For each company newly identified in subsection
|
| (d), the Illinois Investment Policy Board, unless it determines by an affirmative vote that it is unfeasible, shall send a written notice informing the company of its status and that it may become subject to divestment or shareholder activism by the retirement systems.
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|
(2) If, following the Illinois Investment Policy
|
| Board's engagement pursuant to this subsection (e) with a restricted company, that company ceases activity that designates the company to be an Iran-restricted company, a Sudan-restricted company, a company that boycotts Israel, an expatriated entity, or a for-profit company that contracts to shelter migrant children, the company shall be removed from the list of restricted companies and the provisions of this Section shall cease to apply to it unless it resumes such activities.
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|
(3) For a company that is domiciled or has its
|
| principal place of business in Russia or Belarus, if, following the Illinois Investment Policy Board's engagement pursuant to this subsection (e), that company is no longer domiciled or has its principal place of business in Russia or Belarus, the company shall be removed from the list of restricted companies and the provisions of this Section shall cease to apply to it unless it becomes domiciled or has its principal place of business in Russia or Belarus.
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|
(4) For a company that is subject to Russian Harmful
|
| Foreign Activities Sanctions, if, following the Illinois Investment Policy Board's engagement pursuant to this subsection (e), that company is no longer subject to Russian Harmful Foreign Activities Sanctions, the company shall be removed from the list of restricted companies and the provisions of this Section shall cease to apply to it unless it becomes subject to Russian Harmful Foreign Activities Sanctions.
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|
(f) Except as provided in subsection (f-1) of this Section the retirement system shall adhere to the following procedures for companies on the list of restricted companies:
(1) The retirement system shall identify those
|
| companies on the list of restricted companies in which the retirement system owns direct holdings and indirect holdings.
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|
(2) The retirement system shall instruct its
|
| investment advisors to sell, redeem, divest, or withdraw all direct holdings of restricted companies from the retirement system's assets under management in an orderly and fiduciarily responsible manner within 12 months after the company's most recent appearance on the list of restricted companies.
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|
(3) The retirement system may not acquire securities
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|
(4) The provisions of this subsection (f) do not
|
| apply to the retirement system's indirect holdings or private market funds. The Illinois Investment Policy Board shall submit letters to the managers of those investment funds containing restricted companies requesting that they consider removing the companies from the fund or create a similar actively managed fund having indirect holdings devoid of the companies. If the manager creates a similar fund, the retirement system shall replace all applicable investments with investments in the similar fund in an expedited timeframe consistent with prudent investing standards.
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|
(f-1) The retirement system shall adhere to the following procedures for restricted companies that are expatriated entities or for-profit companies that contract to shelter migrant children:
(1) To the extent that the retirement system believes
|
| that shareholder activism would be more impactful than divestment, the retirement system shall have the authority to engage with a restricted company prior to divesting.
|
|
(2) Subject to any applicable State or Federal laws,
|
| methods of shareholder activism utilized by the retirement system may include, but are not limited to, bringing shareholder resolutions and proxy voting on shareholder resolutions.
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|
(3) The retirement system shall report on its
|
| shareholder activism and the outcome of such efforts to the Illinois Investment Policy Board by April 1 of each year.
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|
(4) If the engagement efforts of the retirement
|
| system are unsuccessful, then it shall adhere to the procedures under subsection (f) of this Section.
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|
(f-5) Beginning on the effective date of this amendatory Act of the 102nd General Assembly, no retirement system shall invest moneys in Russian or Belarusian sovereign debt, Russian or Belarusian government-backed securities, any investment instrument issued by an entity that is domiciled or has its principal place of business in Russia or Belarus, or any investment instrument issued by a company that is subject to Russian Harmful Foreign Activities Sanctions, and no retirement system shall invest or deposit State moneys in any bank that is domiciled or has its principal place of business in Russia or Belarus. As soon as practicable after the effective date of this amendatory Act of the 102nd General Assembly, each retirement system shall instruct its investment advisors to sell, redeem, divest, or withdraw all direct holdings of Russian or Belarusian sovereign debt and direct holdings of Russian or Belarusian government-backed securities from the retirement system's assets under management in an orderly and fiduciarily responsible manner.
Notwithstanding any provision of this Section to the contrary, a retirement system may cease divestment pursuant to this subsection (f-5) if clear and convincing evidence shows that the value of investments in such Russian or Belarusian sovereign debt and Russian or Belarusian government-backed securities becomes equal to or less than 0.05% of the market value of all assets under management by the retirement system. For any cessation of divestment authorized by this subsection (f-5), the retirement system shall provide a written notice to the Illinois Investment Policy Board in advance of the cessation of divestment, setting forth the reasons and justification, supported by clear and convincing evidence, for its decision to cease divestment under this subsection (f-5).
The provisions of this subsection (f-5) do not apply to the retirement system's indirect holdings or private market funds.
(g) Upon request, and by April 1 of each year, each retirement system shall provide the Illinois Investment Policy Board with information regarding investments sold, redeemed, divested, or withdrawn in compliance with this Section.
(h) Notwithstanding any provision of this Section to the contrary, a retirement system may cease divesting from companies pursuant to subsection (f) if clear and convincing evidence shows that the value of investments in such companies becomes equal to or less than 0.5% of the market value of all assets under management by the retirement system. For any cessation of divestment authorized by this subsection (h), the retirement system shall provide a written notice to the Illinois Investment Policy Board in advance of the cessation of divestment, setting forth the reasons and justification, supported by clear and convincing evidence, for its decision to cease divestment under subsection (f).
(i) The cost associated with the activities of the Illinois Investment Policy Board shall be borne by the boards of each pension fund or investment board created under Article 15, 16, or 22A of this Code.
(j) With respect to actions taken in compliance with this Section, including all good-faith determinations regarding companies as required by this Section, the retirement system and Illinois Investment Policy Board are exempt from any conflicting statutory or common law obligations, including any fiduciary duties under this Article and any obligations with respect to choice of asset managers, investment funds, or investments for the retirement system's securities portfolios.
(k) It is not the intent of the General Assembly in enacting this amendatory Act of the 99th General Assembly to cause divestiture from any company based in the United States of America. The Illinois Investment Policy Board shall consider this intent when developing or reviewing the list of restricted companies.
(l) If any provision of this amendatory Act of the 99th General Assembly or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this amendatory Act of the 99th General Assembly that can be given effect without the invalid provision or application.
If any provision of Public Act 100-551 or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of Public Act 100-551 that can be given effect without the invalid provision or application.
If any provision of Public Act 102-118 or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of Public Act 102-118 that can be given effect without the invalid provision or application.
If any provision of this amendatory Act of the 102nd General Assembly or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this amendatory Act of the 102nd General Assembly that can be given effect without the invalid provision or application.
(Source: P.A. 102-118, eff. 7-23-21; 102-699, eff. 4-19-22; 102-1108, eff. 12-21-22.)
|
(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.
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|
(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.
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|
(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.
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|
(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.
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|
(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.
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|
(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:
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|
(a) The total investments in such obligations
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| shall not exceed 5% of the book value of the aggregate investments owned by the board;
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|
(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;
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|
(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;
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|
(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;
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|
(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.
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|
(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.
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|
(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);
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|
(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;
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|
(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
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|
(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.
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|
(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.
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|
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.
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|
(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 5/1-119)
Sec. 1-119. Qualified Illinois Domestic Relations Orders.
(a) For the purposes of this Section:
(1) "Alternate payee" means the spouse, former |
| spouse, child, or other dependent of a member, as designated in a QILDRO.
|
|
(2) "Death benefit" means any nonperiodic benefit
|
| payable upon the death of a member to a survivor of the member or to the member's estate or designated beneficiary, including any refund of contributions following the member's death, whether or not the benefit is so called under the applicable Article of this Code.
|
|
(3) "Disability benefit" means any periodic or
|
| nonperiodic benefit payable to a disabled member based on occupational or nonoccupational disability or disease, including any periodic or nonperiodic increases in the benefit, whether or not the benefit is so called under the applicable Article of this Code.
|
|
(4) "Member" means any person who participates in or
|
| has service credits in a retirement system, including a person who is receiving or is eligible to receive a retirement or disability benefit, without regard to whether the person has withdrawn from service.
|
|
(5) "Member's refund" means a return of all or a
|
| portion of a member's contributions that is elected by the member (or provided by operation of law) and is payable before the member's death.
|
|
(5.5) "Permissive service" means service credit
|
| purchased by the member, unused vacation, and unused sick leave that the retirement system includes by statute in a member's benefit calculations.
|
|
(6) "Qualified Illinois Domestic Relations Order" or
|
| "QILDRO" means an Illinois court order that creates or recognizes the existence of an alternate payee's right to receive all or a portion of a member's accrued benefits in a retirement system, is issued pursuant to this Section and Section 503(b)(2) of the Illinois Marriage and Dissolution of Marriage Act, and meets the requirements of this Section. A QILDRO is not the same as a qualified domestic relations order or QDRO issued pursuant to Section 414(p) of the Internal Revenue Code of 1986. The requirements of paragraphs (2) and (3) of that Section do not apply to orders issued under this Section and shall not be deemed a guide to the interpretation of this Section; a QILDRO is intended to be a domestic relations order within the meaning of paragraph (11) of that Section.
|
|
(7) "Regular payee" means the person to whom a
|
| benefit would be payable in the absence of an effective QILDRO.
|
|
(7.5) "Regular service" means service credit earned
|
| by the member, including a repayment of a refund for regular service that the retirement system includes by statute in a member's benefit calculations. "Regular service" does not include service credit purchased by the member, unused vacation, or unused sick leave.
|
|
(8) "Retirement benefit" means any periodic or
|
| nonperiodic benefit payable to a retired member based on age or service, or on the amounts accumulated to the credit of the member for retirement purposes, including any periodic or nonperiodic increases in the benefit, whether or not the benefit is so called under the applicable Article of this Code.
|
|
(9) "Retirement system" or "system" means any
|
| retirement system, pension fund, or other public employee retirement benefit plan that is maintained or established under any of Articles 2 through 18 of this Code.
|
|
(10) "Surviving spouse" means the spouse of a member
|
| at the time of the member's death.
|
|
(11) "Survivor's benefit" means any periodic benefit
|
| payable to a surviving spouse, child, parent, or other survivor of a deceased member, including any periodic or nonperiodic increases in the benefit or nonperiodic payment included with the benefit, whether or not the benefit is so called under the applicable Article of this Code.
|
|
(b) (1) An Illinois court of competent jurisdiction in a proceeding for
declaration of invalidity of marriage, legal separation, or dissolution of
marriage that provides for support or the distribution of property, or any proceeding to
amend or enforce such support or property distribution, may order that all or any part
of any (i) member's retirement benefit, (ii) member's refund payable to or on behalf
of the member, or (iii) death benefit, or portion thereof, that would otherwise be payable to the member's death benefit beneficiaries or estate be instead paid by the retirement system to the
alternate payee.
(2) An order issued under this Section provides only for the diversion to
an alternate payee of certain benefits otherwise payable by the retirement
system under the provisions of this Code. The existence of a QILDRO shall
not cause the retirement system to pay any benefit, or any amount of benefit,
to an alternate payee that would not have been payable by the system to a
regular payee in the absence of the QILDRO.
(3) A QILDRO shall not affect the vesting, accrual, or amount of any
benefit, nor the date or conditions upon which any benefit becomes payable,
nor the right of the member or the member's survivors to make any election
otherwise authorized under this Code, except as provided in subsections (i)
and (j).
(4) A QILDRO shall not apply to or affect the payment of any survivor's
benefit, disability benefit, life insurance benefit, or health
insurance benefit.
(c) (1) A QILDRO must contain the name, mailing
address, and social
security number of the member and of the alternate payee and must identify
the retirement system to which it is directed and the court issuing the order.
(2) A QILDRO must specify each benefit to which it applies, and it must
specify the amount of the benefit to be paid to the alternate payee. In the case of a non-periodic benefit, this amount must be specified as a dollar amount or as a percentage as specifically provided in subsection (n). In the case of a periodic benefit, this amount must be specified as a dollar amount per month or as a percentage per month as specifically provided in subsection (n).
(3) With respect to each benefit to which it applies, a QILDRO must specify
when the order will take effect. In the case of a lump sum benefit payable to an alternate payee of a participant in the self-managed plan authorized under Article 15 of this Code, the benefit shall be paid upon the proper request of the alternate payee. In the case of a periodic benefit that is
being paid at the time the order is received, a QILDRO shall take effect
immediately or on a specified later date; if it takes effect
immediately, it shall become effective on the first benefit payment date
occurring at least 30 days after the order is received by the retirement
system. In the case of any other benefit, a QILDRO shall take effect when
the benefit becomes payable, unless some later date is specified pursuant to subsection (n).
However, in no event shall a QILDRO apply to any benefit paid by the retirement
system before or within 30 days after the order is received. A retirement
system may adopt rules to prorate the amount of the first and final periodic
payments to an alternate payee.
(4) A QILDRO must also contain any provisions required under subsection (n)
or (p).
(5) If a QILDRO indicates that the alternate payee is to receive a percentage of any retirement system benefit, the calculations required shall be performed by the member, the alternate payee, their designated representatives or their designated experts. The results of said calculations shall be provided to the retirement system via a QILDRO Calculation Court Order issued by an Illinois court of competent jurisdiction in a proceeding for declaration of invalidity of marriage, legal separation, or dissolution of marriage. The QILDRO Calculation Court Order shall follow the form provided in subsection (n-5). The retirement system shall have no duty or obligation to assist in such calculations or in completion of the QILDRO Calculation Court Order, other than to provide the information required to be provided pursuant to subsection (h).
(6) Within 45 days after the receipt of a QILDRO Calculation Court Order, the retirement system shall notify the member and the alternate payee (or one designated representative of each) of the receipt of the Order. If a valid QILDRO underlying the QILDRO Calculation Court Order has not been filed with the retirement system, or if the QILDRO Calculation Court Order does not clearly indicate the amount the retirement system is to pay to the alternate payee, then the retirement system shall at the same time notify the member and the alternate payee (or one designated representative of each) of the situation. Unless a valid QILDRO has not been filed with the retirement system, or the QILDRO Calculation Court Order does not clearly indicate the amount the retirement system is to pay the alternate payee, the retirement system shall implement the QILDRO based on the QILDRO Calculation Court Order as soon as administratively possible once benefits are payable. The retirement system shall have no obligation to make any determination as to whether the calculations in the QILDRO Calculation Court Order are accurate or whether the calculations are in accordance with the parties' QILDRO, agreement, or judgment. The retirement system shall not reject a QILDRO Calculation Court Order because the calculations are not accurate or not in accordance with the parties' QILDRO, agreement, or judgment. The retirement system shall have no responsibility for the consequences of its implementation of a QILDRO Calculation Court Order that is inaccurate or not in accordance with the parties' QILDRO, agreement, or judgment.
(d) (1) An order issued under this Section shall not be implemented
unless a certified copy of the order has been filed with the retirement
system. The system shall promptly notify the member and the alternate
payee by first class mail of its receipt of the order.
(2) Neither the retirement system, nor its board, nor any of its employees
shall be liable to the member, the regular payee, or any other person for
any amount of a benefit that is paid in good faith to an alternate payee in
accordance with a QILDRO.
(3) Each new or modified QILDRO or QILDRO Calculation Court Order that is submitted to the retirement system
shall be accompanied by a nonrefundable $50 processing fee payable to the
retirement system, to be used by the system to defer any administrative costs
arising out of the implementation of the order.
(e) (1) Each alternate payee is responsible for maintaining a current
mailing address on file with the retirement system. The retirement
system shall have no duty to attempt to locate any alternate payee by any
means other than sending written notice to the last known address of the
alternate payee on file with the system.
(2) In the event that the system cannot locate an alternate payee when a
benefit becomes payable, the system shall hold the amount of the benefit
payable to the alternate payee and make payment to the alternate payee
if he or she is located within the following 180 days. If the alternate
payee has not been located within 180 days from the date the benefit
becomes payable, the system shall pay the benefit and the amounts held
to the regular payee. If the alternate payee is subsequently
located, the system shall thereupon implement the QILDRO, but the interest
of the alternate payee in any amounts already paid to the regular payee
shall be extinguished. Amounts held under this subsection shall
not bear interest.
(f) (1) If the amount of a benefit that is specified in a QILDRO or QILDRO Calculation Court Order for
payment to an alternate payee exceeds the actual amount of that benefit
payable by the retirement system, the excess shall be disregarded. The
retirement system shall have no liability to any alternate payee or any
other person for the disregarded amounts.
(2) In the event of multiple QILDROs against a member, the retirement
system shall honor all of the QILDROs to the extent possible. However, if the
total amount of a benefit to be paid to alternate payees under all
QILDROs in effect against the member exceeds the actual amount of that
benefit payable by the system, the QILDROs shall be satisfied in the order
of their receipt by the system until the amount of the benefit is
exhausted, and shall not be adjusted pro rata. Any amounts that cannot be
paid due to exhaustion of the benefit shall remain unpaid, and the
retirement system shall have no liability to any alternate payee or any
other person for such amounts.
(3) A modification of a QILDRO shall be filed with the retirement system in
the same manner as a new QILDRO. A modification that does not increase the
amount of any benefit payable to the alternate payee, as that amount was designated in the QILDRO, and does not expand the
QILDRO to affect any benefit not affected by the unmodified QILDRO, does not
affect the priority of payment under subdivision (f)(2); the priority of
payment of a QILDRO that has been modified to increase the amount of any
benefit payable to the alternate payee, or to expand the QILDRO to affect a
benefit not affected by the unmodified QILDRO, shall be based on the date on
which the system receives the modification of the QILDRO.
(4) A modification of a QILDRO Calculation Court Order shall be filed with the retirement system in the same manner as a new QILDRO Calculation Court Order.
(g) (1) Upon the death of the alternate payee under a QILDRO, the QILDRO
shall expire and cease to be effective, and in the absence of another
QILDRO, the right to receive any affected benefit shall revert to the
regular payee.
(2) All QILDROs relating to a member's participation in a particular
retirement system shall expire and cease to be effective upon the issuance
of a member's refund that terminates the member's participation in that
retirement system, without regard to whether the refund was paid to the
member or to an alternate payee under a QILDRO. An expired QILDRO shall
not be automatically revived by any subsequent return by the member to service
under that retirement system.
(h) (1) Within 45 days after receiving a subpoena from any party to a
proceeding for declaration of invalidity of marriage, legal separation, or
dissolution of marriage in which a QILDRO may be issued, or after receiving a
request from the member, a retirement system shall provide in response a statement
of a member's accumulated contributions, accrued benefits, and other
interests in the plan administered by the retirement system based on the data
on file with the system on the date the subpoena is received. If so requested in the subpoena, the retirement system shall also provide in response general retirement plan information available to a member and
any
relevant procedures, rules, or modifications to the model QILDRO form
that have been adopted by the retirement system.
(1.5) If a QILDRO provides for the alternate payee to receive a percentage of a retirement benefit (as opposed to providing for the alternate payee to receive specified dollar amounts of a retirement benefit), then the retirement system shall provide the applicable information to the member and to the alternate payee, or to one designated representative of each (e.g., the member's attorney and the alternate payee's attorney) as indicated below:
(A) If the member is a participant in the
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| self-managed plan authorized under Article 15 of this Code and the QILDRO provides that the only benefit the alternate payee is to receive is a percentage of a lump sum benefit as of a specific date that has already past, then, within 45 days after the retirement system receives the QILDRO, the retirement system shall provide the lump sum amount to which the QILDRO percentage is to be applied.
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|
(B) For all situations except that situation
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| described in item (A), if the retirement system receives the QILDRO before the member's effective date of retirement, then, within 45 days after the retirement system receives the QILDRO, the retirement system shall provide all of the following information:
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|
(i) The date of the member's initial membership
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| in the retirement system, expressed as month, day, and year, if available, or the most exact date that is available to the retirement system.
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|
(ii) The amount of permissive and regular service
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| the member accumulated in the retirement system from the time of initial membership through the most recent date available prior to the retirement system receiving the QILDRO (the dates used by the retirement system shall also be provided). Service amounts shall be expressed using the most exact time increments available to the retirement system (e.g., months or fractions of years).
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|
(iii) The gross amount of the member's
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| non-reduced monthly annuity benefit earned, calculated as of the most recent date available prior to the retirement system receiving the QILDRO, the date used by the retirement system, and the earliest date the member may be eligible to commence the benefit. This amount shall include any permissive service and upgrades purchased by the member, and those amounts shall be noted separately.
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|
(iv) The gross amount of the member's refund or
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| partial refund, including any interest payable on those amounts, calculated as of the most recent date available prior to the retirement system receiving the QILDRO (the date used by the retirement system shall also be provided).
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|
(v) The gross amount of the death benefits that
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| would be payable to the member's death benefit beneficiaries or estate, assuming the member died on the date or a date as close as possible to the date the QILDRO was received by the retirement system, including any interest payable on the amounts, calculated as of the most recent date available prior to the retirement system receiving the QILDRO (the date used by the retirement system shall also be provided).
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(vi) Whether the member has notified the
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| retirement system of the date the member intends to retire, and if so, that date.
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|
(vii) If the member has provided a date that he
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| or she intends to retire, the date, if available, that the retirement system reasonably believes will be the member's effective date of retirement.
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|
(C) For all situations except that situation
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| described in item (A), if the retirement system receives the QILDRO after the effective date of retirement, then, within 45 days after the retirement system receives the QILDRO, or, if the retirement system receives the QILDRO before the member's effective date of retirement, then as soon as administratively possible before or after the member's effective date of retirement (but not later than 45 days after the member's effective date of retirement), the retirement system shall provide all of the following information:
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(i) The member's effective date of retirement.
(ii) The date the member commenced benefits or,
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| if not yet commenced, the date the retirement system has scheduled the member's benefits to commence.
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|
(iii) The amount of permissive and regular
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| service the member accumulated in the retirement system from the time of initial membership through the member's effective date of retirement. Service amounts shall be expressed using the most exact time increments available to the retirement system (e.g., months or fractions of years).
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|
(iv) The gross amount of the member's monthly
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| retirement benefit, calculated as of the member's effective date of retirement. This amount shall include any permissive service and upgrades purchased by the member, and those amounts shall be noted separately.
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(v) The gross amount of the member's refund or
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| partial refund, including any interest payable on those amounts, calculated as of the member's effective date of retirement.
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(vi) The gross amount of death benefits that
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| would be payable to the member's death benefit beneficiaries or estate, assuming the member died on the member's effective date of retirement, including any interest payable on those amounts.
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|
(D) If, and only if, the alternate payee is entitled
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| to benefits under Section VII of the QILDRO, then, within 45 days after the retirement system receives notice of the member's death, the retirement system shall provide the gross amount of death benefits payable, including any interest payable on those amounts, calculated as of the member's date of death.
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|
(2) In no event shall the retirement system be required to furnish to any
person an actuarial opinion as to the present value of the member's benefits or
other interests.
(3) The papers, entries, and records, or parts thereof, of any retirement
system may be proved by a copy thereof, certified under the signature of the
secretary of the system or other duly appointed keeper of the records of the
system and the corporate seal, if any.
(i) In a retirement system in which a member or beneficiary is
required to apply to the system for payment of a benefit, the required
application may be made by an alternate payee who is entitled to all
of a termination refund or retirement benefit or part of a death benefit that is payable
under a QILDRO, provided that all other
qualifications and requirements have been met. However, the alternate payee
may not make the required application for death benefits while the member is alive or for a member's refund or a retirement
benefit if the member is in active service or below the minimum age for
receiving an undiscounted retirement annuity in the retirement system that has
received the QILDRO or in any other retirement system in which the member has
regular or permissive service and in which the member's rights under the Retirement
Systems Reciprocal Act would be affected as a result of the alternate payee's
application for a member's refund or retirement benefit.
(j) (1) So long as there is in effect a QILDRO relating to a member's
retirement benefit, the affected member may not elect a form of payment that
has the effect of diminishing the amount of the payment to which any alternate
payee is entitled, unless the alternate payee has consented to the election in
a
writing that includes the alternate payee's notarized signature, and this written and notarized consent has been filed with the retirement system.
(2) If a member attempts to make an election prohibited under subdivision
(j)(1), the retirement system shall reject the election and advise the member
of the need to obtain the alternate payee's consent.
(3) If a retirement system discovers that it has mistakenly allowed an
election prohibited under subdivision (j)(1), it shall thereupon disallow that
election and recalculate any benefits affected thereby. If the system
determines that an amount paid to a regular payee should have been paid to an
alternate payee, the system shall, if possible, recoup the amounts as provided
in subsection (k) of this Section.
(k) In the event that a regular payee or an alternate payee is overpaid, the
retirement system shall have the authority to and shall recoup the amounts by deducting the overpayment from
future payments and making payment to the other payee. The system may make
deductions for recoupment over a period of time in the same manner as is
provided by law or rule for the recoupment of other amounts incorrectly
disbursed by the system in instances not involving a QILDRO. The retirement
system shall incur no liability to either the alternate payee or the regular
payee as a result of any payment made in good faith, regardless of whether the
system is able to accomplish recoupment.
(l) (1) A retirement system that has, before the effective date of this
Section, received and implemented a domestic relations order that directs
payment of a benefit to a person other than the regular payee may continue
to implement that order, and shall not be liable to the regular payee for
any amounts paid in good faith to that other person in accordance with
the order.
(2) A domestic relations order directing payment of a benefit to a
person other than the regular payee that was issued by a court but not
implemented by a retirement system prior to the effective date of this
Section shall be void. However, a person who is the beneficiary or alternate
payee of a domestic relations order that is rendered void under this subsection
may petition the court that issued the order for an amended order that complies
with this Section.
(3) A retirement system that received a valid QILDRO before the effective date of this amendatory Act of the 94th General Assembly shall continue to implement the QILDRO and shall not be liable to any party for amounts paid in good faith pursuant to the QILDRO.
(m) (1) In accordance with Article XIII, Section 5 of the Illinois
Constitution, which prohibits the impairment or diminishment of benefits
granted under this Code, a QILDRO issued against a member of a retirement
system established under an Article of this Code that exempts the payment of
benefits or refunds from attachment, garnishment, judgment or other legal
process shall not be effective without the written consent of the member if the
member began participating in the retirement system on or before the effective
date of this Section. That consent must specify the retirement system, the
court case number, and the names and social security numbers of the member and
the alternate payee. The consent must accompany the QILDRO when it is filed
with the retirement system, and must be in substantially the following form:
CONSENT TO ISSUANCE OF QILDRO
Case Caption: ...................................
Court Case Number: ....................
Member's Name: ..................................
Member's Social Security Number: ........................
Alternate payee's Name: .........................
Alternate payee's Social Security Number: ...............
I, (name), a member of the (retirement system), hereby irrevocably consent to the
issuance of a Qualified Illinois Domestic Relations Order. I understand
that under the Order, certain benefits that would otherwise be payable to me,
or to my death benefit beneficiaries
or estate, will instead be payable to (name of
alternate payee). I also understand that my right to elect certain forms of
payment of my retirement benefit or member's refund may be limited as a result
of the Order.
DATED:.......................
SIGNED:......................
(2) A member's consent to the issuance of a QILDRO shall be irrevocable,
and shall apply to any QILDRO that pertains to the alternate payee and
retirement system named in the consent.
(n) A QILDRO
issued under this Section shall be in substantially the
following form (omitting any provisions that are not applicable to benefits that are or may be ultimately payable to the member):
QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER
...................................
(Enter Case Caption Here)
................................... (Enter Retirement System Name Here) THIS CAUSE coming before the Court for the purpose of the entry of a Qualified Illinois Domestic Relations Order under the provisions of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), the Court having jurisdiction over the parties and the subject matter hereof; the Court finding that one of the parties to this proceeding is a member of a retirement system subject to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), this Order is entered to implement a division of that party's interest in the retirement system; and the Court being fully advised;
IT IS HEREBY ORDERED AS FOLLOWS: I. The definitions and other provisions of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119) are adopted by reference and made a part of this Order. II. Identification of Retirement System and parties:
Retirement System: ............................
(Name) ............................
(Address)
Member:
............................
(Name) ............................
(Mailing Address) ............................
(Social Security Number)
Alternate payee: ............................
(Name) ............................
(Mailing Address) ............................
(Social Security Number) The alternate payee is the member's .... current or former spouse/ .... child or other dependent [check one].
III. The Retirement System shall pay the indicated amounts of the member's retirement benefits to the alternate payee under the following terms and conditions: (A) The Retirement System shall pay the alternate |
| payee pursuant to one of the following methods [complete the ONE option that applies]:
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|
(1) $...... per month [enter amount]; or
(2) .......% [enter percentage] per month of the
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| marital portion of said benefit with the marital portion defined using the formula in Section IX; or
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|
(3) ........% [enter percentage] per month of the
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| gross amount of said benefit calculated as of the date the .... member's/ .... alternate payee's [check one] benefit commences [check alternate payee only if the alternate payee will commence benefits after the member commences benefits, e.g. if the member is receiving retirement benefits at the time this Order is entered].
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|
(B) If the member's retirement benefit has already
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| commenced, payments to the alternate payee shall commence either [check/complete the ONE option that applies]:
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|
(1) .... as soon as administratively possible
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| upon this order being received and accepted by the Retirement System; or
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|
(2) .... on the date of ........ [enter any
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| benefit payment date that will occur at least 30 days after the date the retirement system receives a valid QILDRO, but ONLY if payment to the alternate payee is to be delayed to some future date; otherwise, check item (1) above].
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|
(C) If the member's retirement benefit has not yet
|
| commenced, payments to the alternate payee shall commence as of the date the member's retirement benefit commences.
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|
(D) Payments to the alternate payee under this
|
| Section III shall terminate [check/complete the ONE option that applies]:
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|
(1) .... upon the death of the member or the
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| death of the alternate payee, whichever is the first to occur; or
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|
(2) .... after ........ payments are made to the
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| alternate payee [enter any set number] or upon the death of the member or the death of the alternate payee, whichever is the first to occur.
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|
IV. If the member's retirement benefits are subject to annual post-retirement increases, the alternate payee's share of said benefits .... shall/ .... shall not [check one] be recalculated or increased annually to include a proportionate share of the applicable annual increases.
V. The Retirement System shall pay to the alternate payee the indicated amounts of any refund upon termination or any lump sum retirement benefit that becomes payable to the member, under the following terms and conditions:
(A) The Retirement System shall pay the alternate
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| payee pursuant to one of the following methods [complete the ONE option that applies]:
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|
(1) $..... [enter amount]; or
(2) .....% [enter percentage] of the marital
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| portion of the refund or lump sum retirement benefit, with the marital portion defined using the formula in Section IX; or
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|
(3) ......% [enter percentage] of the gross
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| amount of the refund or lump sum retirement benefit, calculated when the member's refund or lump sum retirement benefit is paid.
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|
(B) The amount payable to an alternate payee under
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| Section V(A)(2) or V(A)(3) shall include any applicable interest that would otherwise be payable to the member under the rules of the Retirement System.
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|
(C) The alternate payee's share of the refund or lump
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| sum retirement benefit under this Section V shall be paid when the member's refund or lump sum retirement benefit is paid.
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|
VI. The Retirement System shall pay to the alternate payee the indicated amounts of any partial refund that becomes payable to the member under the following terms and conditions:
(A) The Retirement System shall pay the alternate
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| payee pursuant to one of the following methods [complete the ONE option that applies]:
|
|
(1) $...... [enter amount]; or
(2) ......% [enter percentage] of the marital
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| portion of said benefit, with the marital portion defined using the formula in Section IX; or
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|
(3) ......% [enter percentage] of the gross
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| amount of the benefit calculated when the member's refund is paid.
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|
(B) The amount payable to an alternate payee under
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| Section VI(A)(2) or VI(A)(3) shall include any applicable interest that would otherwise be payable to the member under the rules of the Retirement System.
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|
(C) The alternate payee's share of the refund under
|
| this Section VI shall be paid when the member's refund is paid.
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|
VII. The Retirement System shall pay to the alternate payee the indicated amounts of any death benefits that become payable to the member's death benefit beneficiaries or estate under the following terms and conditions:
(A) To the extent and only to the extent required to
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| effectuate this Section VII, the alternate payee shall be designated as and considered to be a beneficiary of the member at the time of the member's death and shall receive [complete ONE of the following options]:
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|
(1) $...... [enter amount]; or
(2) ......% [enter percentage] of the marital
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| portion of death benefits, with the marital portion defined using the formula in Section IX; or
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|
(3) ......% [enter percentage] of the gross
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| amount of death benefits calculated when said benefits become payable.
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|
(B) The amount payable to an alternate payee under
|
| Section VII(A)(2) or VII(A)(3) shall include any applicable interest payable to the death benefit beneficiaries under the rules of the Retirement System.
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|
(C) The alternate payee's share of death benefits
|
| under this Section VII shall be paid as soon as administratively possible after the member's death.
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|
VIII. If this Order indicates that the alternate payee is to receive a percentage of any retirement benefit or refund, upon receipt of the information required to be provided by the Retirement System under Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), the calculations required shall be performed by the member, by the alternate payee, or by their designated representatives or designated experts. The results of the calculations shall be provided to the Retirement System via a QILDRO Calculation Court Order in accordance with Section 1-119 of the Illinois Pension Code.
IX. Marital Portion Benefit Calculation Formula (Option to calculate benefit in items III(A)(2), V(A)(2), VI(A)(2), and VII(A)(2) above). If in this Section "other" is circled in the definition of A, B, or C, then a supplemental order must be entered simultaneously with this QILDRO clarifying the intent of the parties or the Court as to that item. The supplemental order cannot require the Retirement System to take any action not permitted under Illinois law or the Retirement System's administrative rules. To the extent that the supplemental order does not conform to Illinois law or administrative rule, it shall not be binding upon the Retirement System.
(1) The amount of the alternate payee's benefit shall
|
| be the result of (A/B) x C x D where:
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|
"A" equals the number of months of .... regular/
|
| .... regular plus permissive/ .... other [check only one] service that the member accumulated in the Retirement System from the date of marriage ....................... [enter date MM/DD/YYYY] to the date of divorce .................... [enter date MM/DD/YYYY]. This number of months of service shall be calculated as whole months after receipt of information required from the Retirement System pursuant to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
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|
"B" equals the number of months of .... regular/
|
| .... regular plus permissive/ .... other [check only one] service that the member accumulated in the Retirement System from the time of initial membership in the Retirement System through the member's effective date of retirement. The number of months of service shall be calculated as whole months after receipt of information required from the Retirement System pursuant to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
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|
"C" equals the gross amount of:
(i) the member's monthly retirement benefit
|
| (Section III(A)) calculated as of the member's effective date of retirement, .... including/ .... not including/ .... other [check only one] permissive service, upgrades purchased, and other benefit formula enhancements;
|
|
(ii) the member's refund payable upon
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| termination or lump sum retirement benefit that becomes payable, including any payable interest (Section V(A)) calculated as of the time said refund becomes payable to the member;
|
|
(iii) the member's partial refund, including
|
| any payable interest (Section VI(A)) calculated as of the time said partial refund becomes payable to the member; or
|
|
(iv) the death benefit payable to the
|
| member's death benefit beneficiaries or estate, including any payable interest (Section VII(A)) calculated as of the time said benefit becomes payable to the member's beneficiary;
|
|
whichever are applicable pursuant to Section III, V,
|
| VI, or VII of this Order. These gross amounts shall be provided by the Retirement System pursuant to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
|
|
"D" equals the percentage noted in Section
|
| III(A)(2), V(A)(2), VI(A)(2), or VII(A)(2), whichever are applicable.
|
|
(2) The alternate payee's benefit under this Section
|
| IX shall be paid in accordance with all Sections of this Order that apply.
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X. In accordance with subsection (j) of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), so long as this QILDRO is in effect, the member may not elect a form of payment of the retirement benefit that has the effect of diminishing the amount of the payment to which the alternate payee is entitled, unless the alternate payee has consented to the election in writing, the consent has been notarized, and the consent has been filed with the Retirement System.
XI. If the member began participating in the Retirement System before July 1, 1999, this Order shall not take effect unless accompanied by the written consent of the member as required under subsection (m) of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
XII. The Court retains jurisdiction over this matter for all of the following purposes:
(1) To establish or maintain this Order as a
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| Qualified Illinois Domestic Relations Order.
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(2) To enter amended QILDROs and QILDRO Calculation
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| Court Orders to conform to the parties' Marital Settlement Agreement or Agreement for Legal Separation ("Agreement"), to the parties' Judgment for Dissolution of Marriage or Judgment for Legal Separation ("Judgment"), to any modifications of the parties' Agreement or Judgment, or to any supplemental orders entered to clarify the parties' Agreement or Judgment.
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(3) To enter supplemental orders to clarify the
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| intent of the parties or the Court regarding the benefits allocated herein in accordance with the parties' Agreement or Judgment, with any modifications of the parties' Agreement or Judgment, or with any supplemental orders entered to clarify the parties' Agreement or Judgment. A supplemental order may not require the Retirement System to take any action not permitted under Illinois law or the Retirement System's administrative rules. To the extent that the supplemental order does not conform to Illinois law or administrative rule, it shall not be binding upon the Retirement System.
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DATED: ...................... SIGNED: ..................... [Judge's Signature]
(n-5) A QILDRO Calculation Court Order issued under this Section shall be in substantially the following form:
QILDRO Calculation Court Order ...................................
[Enter case caption here]
................................... [Enter Retirement System name here] THIS CAUSE coming before the Court for the purpose of the entry of a QILDRO Calculation Court Order under the provisions of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), the Court having jurisdiction over the parties and the subject matter hereof; the Court finding that a QILDRO has previously been entered in this matter, that the QILDRO has been received and accepted by the Retirement System, and that the QILDRO requires percentage calculations to allocate the alternate payee's share of the member's benefit or refund, the Court not having found that the QILDRO has become void or invalid, and the Court being fully advised; IT IS HEREBY ORDERED AS FOLLOWS: (1) The definitions and other provisions of Section 1-119 of the Illinois Pension Code [40 ILCS 5/1-119] are adopted by reference and made a part of this Order. (2) Identification of Retirement System and parties:
Retirement System: ............................
(Name) ............................
(Address)
Member:
............................
(Name) ............................
(Mailing Address) ............................
(Social Security Number)
Alternate payee: ............................
(Name) ............................
(Mailing Address) ............................
(Social Security Number) The Alternate payee is the member's .... current or former spouse/ .... child or other dependent [check one].
(3) The following shall apply if and only if the QILDRO allocated benefits to the alternate payee in the specific Section noted. The Retirement System shall pay the amounts as directed below, but only if and when the benefits are payable pursuant to the QILDRO and Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119). Parties shall see QILDRO Section IX for the definitions of A, B, C and D as used below. (a) The alternate payee's benefit pursuant to QILDRO |
| Section III(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:
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(......./.......) X ....... X .............. = ............
[Enter A] [Enter B] [Enter C] [Enter D] [Monthly Amount]
(b) The alternate payee's benefit pursuant to QILDRO
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| Section V(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:
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(......./.......) X ....... X .............. = ............
[Enter A] [Enter B] [Enter C] [Enter D] [Amount]
(c) The alternate payee's benefit pursuant to QILDRO
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| Section VI(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:
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(......./.......) X ....... X ............. = ............
[Enter A] [Enter B] [Enter C] [Enter D] [Amount]
(d) The alternate payee's benefit pursuant to QILDRO
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| Section VII(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:
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(......./.......) X ....... X .............. = ............
[Enter A] [Enter B] [Enter C] [Enter D] [Amount]
The Retirement System's sole obligation with respect to the equations in this paragraph (3) is to pay the amounts indicated as the result of the equations. The Retirement System shall have no obligation to review or verify the equations or to assist in the calculations used to determine such amounts.
(4) The following shall apply only if the QILDRO allocated benefits to the alternate payee in the specific Section noted. The Retirement System shall pay the amounts as directed below, but only if and when the benefits are payable pursuant to the QILDRO and Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
(A) The alternate payee's benefit pursuant to QILDRO
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| Section III(A)(3) shall be calculated and paid as follows:
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.................... X ............... = .................
[Gross benefit amount] [Percentage] [Monthly Amount]
(B) The alternate payee's benefit pursuant to QILDRO
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| Section V(A)(3) shall be calculated and paid as follows:
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|
..................... X ............... = .................
[Gross benefit amount] [Percentage] [Amount]
(C) The alternate payee's benefit pursuant to QILDRO
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| Section VI(A)(3) shall be calculated and paid as follows:
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..................... X ............... = .................
[Gross benefit amount] [Percentage] [Amount]
(D) The alternate payee's benefit pursuant to QILDRO
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| Section VII(A)(3) shall be calculated and paid as follows:
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..................... X ............... = .................
[Gross benefit amount] [Percentage] [Amount]
The Retirement System's sole obligation with respect to the equations in this paragraph (4) is to pay the amounts indicated as the result of the equations. The Retirement System shall have no obligation to review or verify the equations or to assist in the calculations used to determine such amounts.
(5) The Court retains jurisdiction over this matter for the following purposes:
(A) to establish or maintain this Order as a QILDRO
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(B) to enter amended QILDROs and QILDRO Calculation
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| Court Orders to conform to the parties' QILDRO, Marital Settlement Agreement or Agreement for Legal Separation ("Agreement"), to the parties' Judgment for Dissolution of Marriage or Judgment for Legal Separation ("Judgment"), to any modifications of the parties' QILDRO, Agreement, or Judgment, or to any supplemental orders entered to clarify the parties' QILDRO, Agreement, or Judgment; and
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(C) To enter supplemental orders to clarify the
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| intent of the parties or the Court regarding the benefits allocated herein in accordance with the parties' Agreement or Judgment, with any modifications of the parties' Agreement or Judgment, or with any supplemental orders entered to clarify the parties' Agreement or Judgment. A supplemental order may not require the Retirement System to take any action not permitted under Illinois law or the Retirement System's administrative rules. To the extent the supplemental order does not conform to Illinois law or administrative rule, it shall not be binding upon the Retirement System.
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DATED: ......................
SIGNED: .....................
[Judge's Signature]
(o) (1) A court in Illinois that has issued a QILDRO shall retain
jurisdiction of all issues relating to the modification of the QILDRO as indicated in Section XII of the QILDRO and in accordance with Illinois law. A court in Illinois that has issued a QILDRO Calculation Court Order shall retain jurisdiction of all issues relating to the modification of the QILDRO Calculation Court Order as indicated in Section 5 of the QILDRO Calculation Court Order and in accordance with Illinois law.
(2) The
Administrative Review Law and the rules adopted pursuant thereto shall govern
and apply to all proceedings for judicial review of final administrative
decisions of the board of trustees of the retirement system arising under this
Section.
The term "administrative decision" is defined as in Section 3-101
of the Code of Civil Procedure. The venue for review under the Administrative
Review Law shall be the same as is provided by law for judicial review of other
administrative decisions of the retirement system.
(p) (1) Each retirement system may adopt any procedures or rules that it
deems necessary or useful for the implementation of this Section.
(2) Each retirement system may by rule modify the model QILDRO form provided
in subsection (n), except that no retirement system may change that form in a way that limits the choices provided to the alternate payee in subsections (n) or (n-5). Each retirement system may by rule
require that additional information be included in
QILDROs presented to the system, as may be necessary to meet the needs of
the retirement system.
(3) Each retirement system shall define its blank model QILDRO form and blank model QILDRO Calculation Court Order form as an original of the forms or a paper copy of the forms. Each retirement system shall, whenever possible, make the forms available on the internet in non-modifiable computer format (for example, Adobe Portable Document Format files) for printing purposes.
(4) If a retirement system in good faith implements an order under this Section that follows substantially the same form as the model order and the retirement system later discovers that the implemented order was not absolutely identical to the retirement system's model order, the retirement system's implementation shall not be a violation of this Section and the retirement system shall have no responsibility to compensate the member or the alternate payee for moneys that would have been paid or not paid had the order been identical to the model order.
(Source: P.A. 93-347, eff. 7-24-03; 94-657, eff. 7-1-06 .)
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