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Illinois Compiled Statutes
Information maintained by the Legislative Reference Bureau Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.
PENSIONS
(40 ILCS 5/) Illinois Pension Code. 40 ILCS 5/22A-105
(40 ILCS 5/22A-105) (from Ch. 108 1/2, par. 22A-105)
Sec. 22A-105.
Pension Fund.
"Pension Fund": The reserves, funds, assets, securities, monies and
property of any pension fund or retirement system.
(Source: P.A. 77-611.)
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40 ILCS 5/22A-105.1
(40 ILCS 5/22A-105.1) (from Ch. 108 1/2, par. 22A-105.1)
Sec. 22A-105.1.
"Education fund":
The monies, funds, reserves,
assets, securities, and property of the Illinois Bank Examiners' Education
Foundation held in the Illinois Bank Examiners' Education Fund in the State Treasury.
(Source: P.A. 84-1127.)
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40 ILCS 5/22A-106
(40 ILCS 5/22A-106) (from Ch. 108 1/2, par. 22A-106)
Sec. 22A-106. "Manage": To invest, reinvest, exchange and to perform all investment
functions with regard to reserves, funds, assets, securities and moneys
which the board is authorized to invest, and to preserve and protect such
reserves, funds, assets, securities and moneys, including, but not limited
to, authority to vote any stocks, bonds or other securities and to give
general or special proxies or powers of attorney with or without power of
substitution, except that the authority to vote proxies is subject to
Section 22A-113.4. This term shall not include any functions, duties and
responsibilities incident to the operation and administration of pension
funds or education fund other than that of investments.
(Source: P.A. 103-468, eff. 8-4-23.)
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40 ILCS 5/22A-107
(40 ILCS 5/22A-107) (from Ch. 108 1/2, par. 22A-107)
Sec. 22A-107.
Invest.
"Invest": To acquire, invest, reinvest, exchange or retain property held
for a pension fund or education fund, sell and manage the reserves,
funds, securities, moneys
or assets of any pension fund, retirement system or education
fund in accordance with this
Article.
(Source: P.A. 84-1127.)
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40 ILCS 5/22A-108
(40 ILCS 5/22A-108) (from Ch. 108 1/2, par. 22A-108)
Sec. 22A-108.
Investment.
"Investment": Any property acquired by the board for a pension fund,
any retirement system or education fund.
(Source: P.A. 84-1127.)
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40 ILCS 5/22A-108.1
(40 ILCS 5/22A-108.1) (from Ch. 108 1/2, par. 22A-108.1)
Sec. 22A-108.1.
Investment Advisor:
Any person or business entity
which provides investment advice to the Board on a personalized basis and with an
understanding of the policies and goals of the Board. "Investment Advisor" shall
not include any person or business entity which provides statistical or general
market research data available for purchase or use by others.
(Source: P.A. 79-1171.)
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40 ILCS 5/22A-109
(40 ILCS 5/22A-109) (from Ch. 108 1/2, par. 22A-109)
Sec. 22A-109. Membership of board. The board shall consist of the following
members: (1) Five trustees appointed by the Governor with the | | advice and consent of the Senate who may not hold an elective State office.
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| (2) The Treasurer.
(3) The Comptroller, who shall represent the State
| | Employees' Retirement System of Illinois.
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| (4) The Chairperson of the General Assembly
| | (5) The Chairperson of the Judges Retirement System
| | The appointive
members shall serve for terms of 4 years except that the terms of office of the
original appointive members pursuant to this amendatory Act of the 96th General Assembly shall be as follows: One member for a term of 1
year; 1 member for a term of 2 years; 1 member for a term of 3 years; and 2 members for a term of 4 years. Vacancies among the appointive
members shall be filled for unexpired terms by appointment in
like manner as for original appointments, and appointive members shall
continue in office until their successors have been appointed and have
qualified.
Notwithstanding any provision of this Section to the contrary, the term of office of each trustee of the Board appointed by the Governor who is sitting on the Board on the effective date of this amendatory Act of the 96th General Assembly is terminated on that effective date. A trustee sitting on the board on the effective date of this amendatory Act of the 96th General Assembly may not hold over in office for more than 60 days after the effective date of this amendatory Act of the 96th General Assembly. Nothing in this Section shall prevent the Governor from making a temporary appointment or nominating a trustee holding office on the day before the effective date of this amendatory Act of the 96th General Assembly.
Each person appointed to membership shall qualify by taking an oath of
office before the Secretary of State stating that he will diligently and
honestly administer the affairs of the board and will not violate or knowingly
permit the violation of any provisions of this Article.
Members of the board shall receive no salary for service on the board but
shall be reimbursed for travel expenses incurred while on business for the
board according to the standards in effect for members of the Commission on Government Forecasting and Accountability.
A majority of the members of the board shall constitute a quorum. The
board shall elect from its membership, biennially, a Chairman, Vice Chairman
and a Recording Secretary. These officers, together with one other member
elected by the board, shall constitute the executive committee. During the
interim between regular meetings of the board, the executive committee shall
have authority to conduct all business of the board and shall report such
business conducted at the next following meeting of the board for ratification.
No member of the board shall have any interest in any brokerage fee,
commission or other profit or gain arising out of any investment made by
the board. This paragraph does not preclude ownership by any member of any
minority interest in any common stock or any corporate obligation in which
investment is made by the board.
The board shall contract for a blanket fidelity bond in the penal sum of
not less than $1,000,000.00 to cover members of the board, the director and
all other employees of the board conditioned for the faithful performance of
the duties of their respective offices, the premium on which shall be paid by
the board.
(Source: P.A. 99-708, eff. 7-29-16; 100-1148, eff. 12-10-18.)
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40 ILCS 5/22A-110
(40 ILCS 5/22A-110) (from Ch. 108 1/2, par. 22A-110)
Sec. 22A-110.
Administration.
The board shall appoint a director to administer
the affairs of the board subject to and under its supervision and fix his
compensation. The Board may appoint investment officers and fix their compensation.
With the approval of the board, the director may employ such personnel,
professional or clerical, as may be desirable and fix their compensation.
The appointment and compensation of the personnel other than the director
and investment officers shall be subject to the Personnel Code.
The board may adopt such rules and regulations (not inconsistent with this
Article) as in its judgment are desirable to implement and properly administer
this Article. A copy thereof shall be filed with the Secretary of State.
The board may exercise any of the powers granted to boards of trustees
of pension funds under Sections 1-107 or 1-108 of this Act, and may by resolution
provide for the indemnification of its members and any of its directors,
officers, advisors or employees in a manner consistent with those Sections.
No such resolution adopted on or after September 27, 1977 shall be deemed
invalid for the reason that it was adopted prior to the effective date of
this amendatory Act of 1983.
An office for meetings of the board and for administrative personnel shall
be established at any suitable place within the State as may be selected
by the board. All books and records of the board shall be kept in such
office.
(Source: P.A. 83-974.)
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40 ILCS 5/22A-111
(40 ILCS 5/22A-111) (from Ch. 108 1/2, par. 22A-111)
Sec. 22A-111.
The Board shall manage the investments of any pension
fund, retirement system, or education fund for the purpose
of obtaining a total return on
investments for the long term. It also shall perform such other functions as
may be assigned or directed by the General Assembly.
The authority of the board to manage pension fund investments and the
liability shall begin when there has been a physical transfer of the pension
fund investments to the board and placed in the custody of the board's custodian.
The authority of the board to manage monies from the education fund for
investment and the liability of the board shall begin when there has been a
physical transfer of education fund investments to the board and placed in
the custody of the board's custodian.
The board may not delegate its management functions, but it may, but is not required to, arrange
to compensate for personalized investment advisory service
for any or all investments under its control with any national or state bank
or trust company authorized to do a trust business and domiciled in Illinois,
other financial institution organized under the laws of Illinois, or an
investment advisor who is qualified under the Federal Investment Advisers Act of 1940
and is registered under the Illinois Securities Law of 1953. Nothing contained
herein shall prevent the Board from subscribing to general investment research
services available for purchase or use by others. The Board shall also have
the authority to compensate for accounting services.
This Section shall not be construed to prohibit the Illinois State Board of Investment from directly investing pension assets in public market investments, private investments, real estate investments, or other investments authorized by this Code. (Source: P.A. 99-708, eff. 7-29-16; 100-201, eff. 8-18-17.)
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40 ILCS 5/22A-111.1
(40 ILCS 5/22A-111.1) (from Ch. 108 1/2, par. 22A-111.1)
Sec. 22A-111.1.
Public Employees Deferred Compensation Plan.
The Board shall also have the responsibilities imposed on it by Article
24 of this Act in relation to a deferred compensation plan for public
employees.
(Source: P.A. 78-1277.)
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40 ILCS 5/22A-112
(40 ILCS 5/22A-112) (from Ch. 108 1/2, par. 22A-112)
Sec. 22A-112.
Investment authority.
The board shall have the authority
to invest funds, subject to the requirements and restrictions set forth
in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114 and 1-115 of this
Code.
No bank or savings and loan association shall receive investment funds
as permitted by this Section, unless it has complied with the requirements
established pursuant to Section 6 of "An Act relating to certain investments
of public funds by public agencies", approved July 23, 1943, as now or
hereafter amended. The limitations set forth in such Section 6 shall be
applicable only at the time of investment and shall not require the liquidation
of any investment at any time.
The board shall have the authority to enter into such agreements and to
execute such documents as it determines to be necessary to complete any
investment transaction.
All investments shall be clearly held and accounted for to indicate
ownership by the board. The board may direct the registration of
securities 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 the board.
The value of investments held by any pension fund, retirement system
or education fund in one or more commingled investment accounts shall be
determined in accordance with generally accepted accounting principles.
(Source: P.A. 90-19, eff. 6-20-97.)
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40 ILCS 5/22A-113
(40 ILCS 5/22A-113) (from Ch. 108 1/2, par. 22A-113)
Sec. 22A-113.
Transfer of securities and investment functions.
(a) As soon as possible or practicable following the enactment of this
Article and prior to July 1, 1970, the trustees of the State Employees'
Retirement System, the General Assembly Retirement System and the Judges
Retirement System, shall transfer to this board for management and
investment all of their securities or for which commitments have been made,
and all funds, assets or moneys representing permanent or temporary
investments, or cash reserves maintained for the purpose of obtaining
income thereon.
(b) The board of trustees or retirement board of any pension fund or
retirement system electing to come under the authority of the Illinois
State Board of Investment for the management of its investments and the
performance of investment functions previously performed by such board of
that pension fund or retirement system shall effect a transfer of
securities and other assets thereof not later than the first day of the 4th
month next following the date of such election after completion of an audit
by a certified public accountant of such securities and other assets as
authorized by the Illinois State Board of Investment and approved by the
Auditor General of the State, the expense of which shall be assumed by the
pension fund or retirement system. Upon such transfer, the authority of the
Illinois State Board of Investment in the case of such pension fund or
retirement system is effective. These transfers shall be receipted for in
detail by the Chairman and director of the board.
(c) The board of trustees or retirement board of any pension fund or
retirement system authorized under the Illinois Pension Code to participate
in any commingled investment fund or funds established and managed by the
Illinois State Board of Investment under this Article may invest in such
commingled investment fund or funds upon written notice to the Illinois
State Board of Investment. The board of trustees of the Illinois Bank
Examiners' Education Foundation is authorized to participate in any
commingled investment fund or funds established and managed by the Illinois
State Board of Investment upon providing written notice to the Illinois
State Board of Investment. Any participation in a commingled fund and the
management thereof shall be in accordance with the governing law and the
rules, policies and directives of the Illinois State Board of Investment.
(Source: P.A. 84-1127.)
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40 ILCS 5/22A-113.1
(40 ILCS 5/22A-113.1) (from Ch. 108 1/2, par. 22A-113.1)
Sec. 22A-113.1. Investable funds.
Each retirement system under the management of the Illinois State Board
of Investment shall report to the board from time to time the amounts of
funds available for investment. These amounts shall be transferred
immediately to the board's custodian or the custodian's authorized agent for the account
of the board to be applied for investment by the board. Notice to the
Illinois State Board of Investment of each such transfer shall be given by
the retirement system as the transfer occurs.
(Source: P.A. 99-708, eff. 7-29-16.)
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40 ILCS 5/22A-113.2
(40 ILCS 5/22A-113.2) (from Ch. 108 1/2, par. 22A-113.2)
Sec. 22A-113.2. Custodian.
The securities, funds and other assets transferred to the Illinois State
Board of Investment or otherwise acquired by the board shall be placed in
the custody of the board's custodian. The custodian shall provide adequate safe deposit facilities therefor and hold all
such securities, funds and other assets subject to the order of the board.
As soon as may be practicable, but in no event later than December 31, 2016, the board shall appoint and retain a qualified custodian. Until a custodian has been appointed by the board, the State Treasurer shall serve as official custodian of
the board. The custodian shall furnish a corporate surety bond of such amount
as the board designates, which bond shall indemnify the board against any
loss that may result from any action or failure to act by the custodian or
any of the custodian's agents. All charges incidental to the procuring and giving of
such bond shall be paid by the board. The bond shall be in the custody of
the board.
(Source: P.A. 99-708, eff. 7-29-16.)
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40 ILCS 5/22A-113.3
(40 ILCS 5/22A-113.3) (from Ch. 108 1/2, par. 22A-113.3)
Sec. 22A-113.3. Investable funds of education foundation. The
Illinois Bank Examiners'
Education Foundation shall report to the board from time to time the
amounts of monies available for investment by the board. These amounts shall be
transferred promptly to the board's custodian or the custodian's authorized agent for the
account of the board to be applied for investment by the board. Notice to
the board of each such transfer shall be given by the Illinois Bank
Examiners' Education Foundation after the transfer occurs.
(Source: P.A. 99-708, eff. 7-29-16.)
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40 ILCS 5/22A-113.4 (40 ILCS 5/22A-113.4) (Section scheduled to be repealed on January 1, 2027) Sec. 22A-113.4. Proxy voting. (a) In this Section, "fiduciary" has the meaning given to that term in Section 1-101.2. (b) Notwithstanding the Board's investment authority, and upon the affirmative vote of at least three-fifths of the members of the Board, the State Treasurer shall be authorized to manage the domestic and international proxy voting activity for shares held directly by the Board and execute required ballots on behalf of the Board. The Board's consent granted under this Section may be revoked at any time upon the affirmative vote of a majority of the members of the Board. (c) When the State Treasurer is managing any proxy voting activity in accordance with subsection (b), the following shall apply: (1) the State Treasurer shall provide the Board with (i) comprehensive proxy voting reports on a quarterly basis and as requested by the Board and (ii) access to communications with its third-party proxy voting service, if any, used in preparing the comprehensive proxy voting reports requested by the Board; and (2) the Board may provide the State Treasurer with guidance for proxy voting, which, if provided, the State Treasurer shall consider when voting. (d) The State Treasurer shall act as a fiduciary to the Illinois State Board of Investment with regard to all aspects of the State Treasurer's management of the proxy voting activity as provided under subsection (b). (e) With respect to this Section, and with respect to the State Treasurer's management of the proxy voting activity as provided for under subsection (b), the Board is exempt from any conflicting statutory or common law obligations, including any fiduciary or co-fiduciary duties under this Article and Article 1. (f) With respect to this Section and with respect to the State Treasurer's management of the proxy voting activity as provided for under subsection (b), the Board, its staff, and the trustees of the Board shall not be liable for any damage or suits where damages are sought for negligent or wrongful acts alleged to have been committed in connection with the management of proxy voting activity as provided for under this Section. (g) In order to facilitate the State Treasurer's proxy voting activities under this Section and before the State Treasurer begins proxy voting activities, the State Treasurer and the Board shall enter into an intergovernmental agreement concerning costs, proxy voting guidance, reports and other documents, and other issues. (h) This Section is repealed on January 1, 2027.
(Source: P.A. 103-468, eff. 8-4-23.) |
40 ILCS 5/22A-113.5 (40 ILCS 5/22A-113.5) Sec. 22A-113.5. Fiduciary report. On or before September 1, 2023, and annually thereafter, the Board shall publish its guidelines for voting proxy ballots and a detailed report on its website describing how the Board is considering sustainability factors as defined in the Illinois Sustainable Investing Act. The report shall: (1) describe the Board's strategy as it relates to | | the consideration of sustainable investment factors;
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| (2) outline the process for regular assessment across
| | the total portfolio of potential effects from systemic and regulatory risks and opportunities, including, but not limited to, sustainability factors on the assets of the plan;
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| (3) disclose how each investment manager serving as a
| | fiduciary to the Board integrates sustainability factors into the investment manager's investment decision-making process;
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| (4) provide a comprehensive proxy voting report;
(5) provide an overview of all corporate engagement
| | and stewardship activities; and
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| (6) include any other information the Board deems
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(Source: P.A. 103-468, eff. 8-4-23.)
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40 ILCS 5/22A-114
(40 ILCS 5/22A-114) (from Ch. 108 1/2, par. 22A-114)
Sec. 22A-114.
Accounting.
In the management of pension and education funds
the board:
(1) may, for investment purposes, commingle all or a part of the
invested assets of one or more pension or education funds under its
jurisdiction and authority;
(2) shall carry assets of all funds at cost or a value determined in accordance with
generally accepted
accounting principles and accounting procedures approved by the board. Each investment initially transferred to the board by
a pension fund or monies transferred to the board by an education fund shall be
similarly valued except that the board may elect to place such value on any
investment conditionally in which case the amount of any later realization of
such asset in cash that is in excess of or is less than the amount so credited
shall be credited or charged to the fund that made the transfer;
(3) shall keep proper books of account which shall reflect at all times
the value of all investments held by the board for a pension fund or education
fund whether for the separate account of the fund or in a commingled fund;
(4) shall charge each pension fund or education fund with its share of all
expenses of the board (including those repayable under Section 22A-116) at
quarter-yearly periods pro rata according to the value of the investments held
for the respective funds at the beginning of the quarter or any other equitable
formula;
(5) shall charge all distributions made by the board to or for a pension
fund or education fund to the account maintained for that fund.
(Source: P.A. 90-19, eff. 6-20-97.)
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40 ILCS 5/22A-115
(40 ILCS 5/22A-115) (from Ch. 108 1/2, par. 22A-115)
Sec. 22A-115.
Audits and reports.
At least annually, the books, records, accounts and securities of the
board shall be audited by a certified public accountant designated by the
Auditor General of the State. The audit opinion shall be published as a
part of the annual report of the board.
For the quarterly periods ending September 30, December 31, and March
31, the board shall submit to each pension fund, retirement
system or education fund under
its jurisdiction a report embracing, among other things, the following
information: (a) a full description of the investments acquired, showing
average costs; (b) a full description of the securities sold or exchanged,
showing average proceeds or other conditions of an exchange; (c) gains or
losses realized during the period; (d) income from investments; (e)
administrative expenses of the board; and (f) the proportion of
administrative expenses allocable to each pension fund, retirement
system or education fund.
An annual report shall be prepared by the board for submission to each
pension fund, retirement system or education fund under its
jurisdiction within 6 months
after the close of each fiscal year. A fiscal year shall date from July 1
of one year to June 30 of the year next following. This report shall embody
full information concerning the results of investment operations of the
board for the year, including the foregoing information and, in addition
thereto, the following:
(a) a listing of the investments held by the board as at the end of the
year showing their book values and market values and their income yields on
market values;
(b) the amounts as determined under paragraph (a) above allocable to
each pension fund or education fund managed by the board;
(c) comments on the pertinent factors affecting the operations of the
board for the year;
(d) a review of the policies maintained by the board and any changes
therein that occurred during the year;
(e) a copy of the audited financial statements for the year;
(f) recommendations for possible changes in the law governing the
operations of the board; and
(g) a listing of the names of securities brokers and dealers dealt with
during the year showing the total amount of commissions received by each on
transactions with the board.
(Source: P.A. 84-1127.)
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40 ILCS 5/22A-116
(40 ILCS 5/22A-116) (from Ch. 108 1/2, par. 22A-116)
Sec. 22A-116.
(Repealed).
(Source: P.A. 76-1829. Repealed by P.A. 89-657, eff. 8-14-96.)
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40 ILCS 5/Art. 22B
(40 ILCS 5/Art. 22B heading)
ARTICLE 22B. THE POLICE OFFICERS' PENSION INVESTMENT FUND
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-101 (40 ILCS 5/22B-101) Sec. 22B-101. Establishment. The Police Officers' Pension Investment Fund is created with authority to manage the reserves, funds, assets, securities, properties, and moneys of the police pension funds created pursuant to Article 3 of this Code, all as provided in this Article.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-102 (40 ILCS 5/22B-102) Sec. 22B-102. Definitions. For the purposes of this Article, the following words and phrases shall have the meaning ascribed to them unless the context requires otherwise.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-103 (40 ILCS 5/22B-103) Sec. 22B-103. Fund. "Fund" means the Police Officers' Pension Investment Fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-104 (40 ILCS 5/22B-104) Sec. 22B-104. Transferor pension fund. "Transferor pension fund" means any pension fund established pursuant to Article 3 of this Code.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-105 (40 ILCS 5/22B-105) Sec. 22B-105. Participating pension fund. "Participating pension fund" means any pension fund established pursuant to Article 3 of this Code that has transferred securities, funds, assets, and moneys, and responsibility for custody and control of those securities, funds, assets, and moneys, to the Fund pursuant to Section 3-132.1.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-106 (40 ILCS 5/22B-106) Sec. 22B-106. Pension fund assets. "Pension fund assets" means the reserves, funds, assets, securities, and moneys of any transferor pension fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-107 (40 ILCS 5/22B-107) Sec. 22B-107. Invest. "Invest" means to acquire, invest, reinvest, exchange, or retain pension fund assets of the transferor pension funds and to sell and manage the reserves, funds, securities, moneys, or assets of the transferor pension fund, all in accordance with this Article.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-108 (40 ILCS 5/22B-108) Sec. 22B-108. Investment advisor. "Investment advisor" means any person or business entity that provides investment advice to the Board on a personalized basis and with an understanding of the policies and goals of the Board. "Investment advisor" does not include any person or business entity that provides statistical or general market research data available for purchase or use by others.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-112 (40 ILCS 5/22B-112) Sec. 22B-112. Transition period. "Transition period" means the period immediately following the effective date of this amendatory Act of the 101st General Assembly during which pension fund assets, and responsibility for custody and control of those assets, will be transferred from the transferor pension funds to the board, as described in Section 22B-120.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-113 (40 ILCS 5/22B-113) Sec. 22B-113. Illinois Municipal League. "Illinois Municipal League" means the unincorporated, nonprofit, nonpolitical association of Illinois cities, villages, and incorporated towns described in Section 1-8-1 of the Illinois Municipal Code.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-114 (40 ILCS 5/22B-114) Sec. 22B-114. Purpose, establishment, and governance. The Fund is established to consolidate the transferor pension funds to streamline investments and eliminate unnecessary and redundant administrative costs, thereby ensuring more money is available to fund pension benefits for the beneficiaries of the transferor pension funds. The transition board trustees and permanent board trustees of the Fund shall be fiduciaries for the participants and beneficiaries of the participating pension funds and shall discharge their duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries. Further, the transition board trustees and permanent board trustees, acting prudently and as fiduciaries, shall take all reasonable steps to ensure that all of the transferor pension funds are treated equitably and that the financial condition of one participating pension fund, including, but not limited to, pension benefit funding levels and ratios, will have no effect on the financial condition of any other transferor pension fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-115 (40 ILCS 5/22B-115) Sec. 22B-115. Board of Trustees of the Fund. (a) No later than one month after the effective date of this amendatory Act of the 101st General Assembly or as soon thereafter as may be practicable, the Governor shall appoint, by and with the advice and consent of the Senate, a transition board of trustees consisting of 9 members as follows: (1) three members representing municipalities who are | | mayors, presidents, chief executive officers, chief financial officers, or other officers, executives, or department heads of municipalities and appointed from among candidates recommended by the Illinois Municipal League;
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| (2) three members representing participants and who
| | are participants, 2 of whom shall be appointed from among candidates recommended by a statewide fraternal organization representing more than 20,000 active and retired police officers in the State of Illinois, and one of whom shall be appointed from among candidates recommended by a benevolent association representing sworn police officers in the State of Illinois;
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| (3) two members representing beneficiaries and who
| | are beneficiaries, one of whom shall be appointed from among candidates recommended by a statewide fraternal organization representing more than 20,000 active and retired police officers in the State of Illinois, and one of whom shall be appointed from among candidates recommended by a benevolent association representing sworn police officers in the State of Illinois; and
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| (4) one member who is a representative of the
| | Illinois Municipal League.
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| The transition board members shall serve until the initial permanent board members are elected and qualified.
The transition board of trustees shall select the chairperson of the transition board of trustees from among the trustees for the duration of the transition board's tenure.
(b) The permanent board of trustees shall consist of 9 members as follows:
(1) Three members who are mayors, presidents, chief
| | executive officers, chief financial officers, or other officers, executives, or department heads of municipalities that have participating pension funds and are elected by the mayors and presidents of municipalities that have participating pension funds.
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| (2) Three members who are participants of
| | participating pension funds and are elected by the participants of participating pension funds.
|
| (3) Two members who are beneficiaries of
| | participating pension funds and are elected by the beneficiaries of participating pension funds.
|
| (4) One member recommended by the Illinois
| | Municipal League who shall be appointed by the Governor with the advice and consent of the Senate.
|
| The permanent board of trustees shall select the chairperson of the permanent board of trustees from among the trustees for a term of 2 years. The holder of the office of chairperson shall alternate between a person elected or appointed under item (1) or (4) of this subsection (b) and a person elected under item (2) or (3) of this subsection (b).
(c) Each trustee shall qualify by taking an oath of office before the Secretary of State or the legal counsel of the fund stating that he or she will diligently and honestly administer the affairs of the board and will not violate or knowingly permit the violation of any provision of this Article.
(d) Trustees shall receive no salary for service on the board but shall be reimbursed for travel expenses incurred while on business for the board according to Article 1 of this Code and rules adopted by the board.
A municipality employing a police officer who is an elected or appointed trustee of the board must allow reasonable time off with compensation for the police officer to conduct official business related to his or her position on the board, including time for travel. The board shall notify the municipality in advance of the dates, times, and locations of this official business. The Fund shall timely reimburse the municipality for the reasonable costs incurred that are due to the police officer's absence.
(e) No trustee shall have any interest in any brokerage fee, commission, or other profit or gain arising out of any investment directed by the board. This subsection does not preclude ownership by any member of any minority interest in any common stock or any corporate obligation in which an investment is directed by the board.
(f) Notwithstanding any provision or interpretation of law to the contrary, any member of the transition board may also be elected or appointed as a member of the permanent board.
Notwithstanding any provision or interpretation of law to the contrary, any trustee of a fund established under Article 3 of this Code may also be appointed as a member of the transition board or elected or appointed as a member of the permanent board.
The restriction in Section 3.1 of the Lobbyist Registration Act shall not apply to a member of the transition board appointed pursuant to item (4) of subsection (a) or to a member of the permanent board appointed pursuant to item (4) of subsection (b).
(Source: P.A. 103-506, eff. 8-4-23.)
|
40 ILCS 5/22B-116 (40 ILCS 5/22B-116) Sec. 22B-116. Conduct and administration of elections; terms of office. (a) For the election of the permanent trustees, the transition board shall administer the initial elections and the permanent board shall administer all subsequent elections. Each board shall develop and implement such procedures as it determines to be appropriate for the conduct of such elections. For the purposes of obtaining information necessary to conduct elections under this Section, participating pension funds shall cooperate with the Fund. (b) All nominations for election shall be by petition. Each petition for a trustee shall be executed as follows: (1) for trustees to be elected by the mayors and | | presidents of municipalities that have participating pension funds, by at least 20 such mayors and presidents;
|
| (2) for trustees to be elected by participants, by at
| | least 400 participants; and
|
| (3) for trustees to be elected by beneficiaries, by
| | at least 100 beneficiaries.
|
| (c) A separate ballot shall be used for each class of trustee. The board shall prepare and send ballots and ballot envelopes to the participants and beneficiaries eligible to vote in accordance with rules adopted by the board. The ballots shall contain the names of all candidates in alphabetical order. The ballot envelope shall have on the outside a form of certificate stating that the person voting the ballot is a participant or beneficiary entitled to vote.
Participants and beneficiaries, upon receipt of the ballot, shall vote the ballot and place it in the ballot envelope, seal the envelope, execute the certificate thereon, and return the ballot to the Fund.
The board shall set a final date for ballot return, and ballots received prior to that date in a ballot envelope with a properly executed certificate and properly voted shall be valid ballots.
The board shall set a day for counting the ballots and name judges and clerks of election to conduct the count of ballots and shall make any rules necessary for the conduct of the count.
The candidate or candidates receiving the highest number of votes for each class of trustee shall be elected. In the case of a tie vote, the winner shall be determined in accordance with procedures developed by the Department of Insurance.
In lieu of conducting elections via mail balloting as described in this Section, the board may instead adopt rules to provide for elections to be carried out solely via Internet balloting or phone balloting. Nothing in this Section prohibits the Fund from contracting with a third party to administer the election in accordance with this Section.
(d) At any election, voting shall be as follows:
(1) Each person authorized to vote for an elected
| | trustee may cast one vote for each related position for which such person is entitled to vote and may cast such vote for any candidate or candidates on the ballot for such trustee position.
|
| (2) If only one candidate for each position is
| | properly nominated in petitions received, that candidate shall be deemed the winner and no election under this Section shall be required.
|
| (3) The results shall be entered in the minutes of
| | the first meeting of the board following the tally of votes.
|
| (e) The initial election for permanent trustees shall be held and the permanent board shall be seated no later than 12 months after the effective date of this amendatory Act of the 101st General Assembly. Each subsequent election shall be held no later than 30 days prior to the end of the term of the incumbent trustees.
(f) The elected trustees shall each serve for terms of 4 years commencing on the first business day of the first month after election; except that the terms of office of the initially elected trustees shall be as follows:
(1) one trustee elected pursuant to item (1) of
| | subsection (b) of Section 22B-115 shall serve for a term of 2 years and 2 trustees elected pursuant to item (1) of subsection (b) of Section 22B-115 shall serve for a term of 4 years;
|
| (2) two trustees elected pursuant to item (2) of
| | subsection (b) of Section 22B-115 shall serve for a term of 2 years and one trustee elected pursuant to item (2) of subsection (b) of Section 22B-115 shall serve for a term of 4 years; and
|
| (3) one trustee elected pursuant to item (3) of
| | subsection (b) of Section 22B-115 shall serve for a term of 2 years and one trustee elected pursuant to item (3) of subsection (b) of Section 22B-115 shall serve for a term of 4 years.
|
| (g) The trustee appointed pursuant to item (4) of subsection (b) of Section 22B-115 shall serve for a term of 2 years commencing on the first business day of the first month after the election of the elected trustees.
(h) A member of the board who was elected pursuant to item (1) of subsection (b) of Section 22B-115 who ceases to serve as a mayor, president, chief executive officer, chief financial officer, or other officer, executive, or department head of a municipality that has a participating pension fund shall not be eligible to serve as a member of the board and his or her position shall be deemed vacant. A member of the board who was elected by the participants of participating pension funds who ceases to be a participant may serve the remainder of his or her elected term.
For a vacancy of a trustee under item (1) of subsection (b) of Section 22B-115, the vacancy shall be filled by appointment by the board for the unexpired term from a list of candidates recommended by the trustees under item (1) of subsection (b) of Section 22B-115. The list of candidates shall be compiled and presented to the board by the executive director of the Fund.
For a vacancy of a trustee under item (2) of subsection (b) of Section 22B-115, the vacancy shall be filled by appointment by the board for the unexpired term from a list of candidates recommended by the trustees under item (2) of subsection (b) of Section 22B-115. The list of candidates shall be compiled and presented to the board by the executive director of the Fund.
For a vacancy of a trustee under item (3) of subsection (b) of Section 22B-115, the vacancy shall be filled by appointment by the board for the unexpired term from a list of candidates recommended by the trustees under item (3) of subsection (b) of Section 22B-115. The list of candidates shall be compiled and presented to the board by the executive director of the Fund.
A trustee appointed to fill the vacancy of an elected trustee shall serve until a successor is elected. Special elections to fill the remainder of an unexpired term vacated by an elected trustee shall be held concurrently with and in the same manner as the next regular election for an elected trustee position.
Vacancies among the appointed trustees shall be filled for unexpired terms by appointment in like manner as for the original appointments.
(Source: P.A. 103-506, eff. 8-4-23.)
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40 ILCS 5/22B-117 (40 ILCS 5/22B-117) Sec. 22B-117. Meetings of the board. (a) The transition board and the permanent board shall each meet at least quarterly and otherwise upon written request of either the Chairperson or 3 other members. The Chairperson shall preside over meetings of the board. The executive director and personnel of the board shall prepare agendas and materials and required postings for meetings of the board. (b) Six members of the board shall constitute a quorum. (c) All actions taken by the transition board and the permanent board shall require a vote of least 5 trustees, except that the following shall require a vote of at least 6 trustees: the adoption of actuarial assumptions; the selection of the chief investment officer, fiduciary counsel, or a consultant as defined under Section 1-101.5 of this Code; the adoption of rules for the conduct of election of trustees; and the adoption of asset allocation policies and investment policies.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-118 (40 ILCS 5/22B-118) Sec. 22B-118. Operation and administration of the Fund. (a) The operation and administration of the Fund shall be managed by an executive director. No later than 2 months after the transition board is appointed or as soon thereafter as may be practicable, the transition board shall appoint an interim executive director who shall serve until a permanent executive director is appointed by the board, with such appointment to be made no later than 6 months after the end of the transition period. The executive director shall act subject to and under the supervision of the board and the board shall fix the compensation of the executive director. (b) The board may appoint one or more custodians to facilitate the transfer of pension fund assets during the transition period, and subsequently to provide custodial and related fiduciary services on behalf of the board, and enter into contracts for such services. The board may also appoint external legal counsel and an independent auditing firm and may appoint investment advisors and other consultants as it determines to be appropriate and enter into contracts for such services. With approval of the board, the executive director may retain such other consultants, advisors, fiduciaries, and service providers as may be desirable and enter into contracts for such services. (c) The board shall separately calculate account balances for each participating pension fund. The operations and financial condition of each participating pension fund account shall not affect the account balance of any other participating pension fund. Further, investment returns earned by the Fund shall be allocated and distributed pro rata among each participating pension fund account in accordance with the value of the pension fund assets attributable to each fund. (d) With approval of the board, the executive director may employ such personnel, professional or clerical, as may be desirable and fix their compensation. The appointment and compensation of the personnel, including the executive director, shall not be subject to the Personnel Code. (e) The board shall annually adopt a budget to support its operations and administration. The board shall apply moneys derived from the pension fund assets transferred and under its control to pay the costs and expenses incurred in the operation and administration of the Fund. The board shall from time to time transfer moneys and other assets to the participating pension funds as required for the participating pension funds to pay expenses, benefits, and other required payments to beneficiaries in the amounts and at the times prescribed in this Code. (f) The board may exercise any of the powers granted to boards of trustees of pension funds under Sections 1-107 and 1-108 of this Code and may by resolution provide for the indemnification of its members and any of its officers, advisors, or employees in a manner consistent with those Sections. (g) An office for meetings of the board and for its administrative personnel shall be established at any suitable place within the State as may be selected by the board. All books and records of the board shall be kept in such office. (h) The board shall contract for a blanket fidelity bond in the penal sum of not less than $1,000,000 to cover members of the board of trustees, the executive director, and all other employees of the board, conditioned for the faithful performance of the duties of their respective offices, the premium on which shall be paid by the board.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-119 (40 ILCS 5/22B-119) Sec. 22B-119. Adoption of rules. The board shall adopt such rules (not inconsistent with this Code) as in its judgment are desirable to implement and properly administer this Article. Such rules shall specifically provide for the following: (1) the implementation of the transition process described in Section 22B-120; (2) the process by which the participating pension funds may request transfer of funds; (3) the process for the transfer in, receipt for, and investment of pension assets received by the Fund after the transition period from the participating pension funds; (4) the process by which contributions from municipalities for the benefit of the participating pension funds may, but are not required to, be directly transferred to the Fund; and (5) compensation and benefits for its employees. A copy of the rules adopted by the Fund shall be filed with the Secretary of State and the Department of Insurance. The adoption and effectiveness of such rules shall not be subject to Article 5 of the Illinois Administrative Procedure Act.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-120 (40 ILCS 5/22B-120) Sec. 22B-120. Transition period; transfer of securities, assets, and investment functions. (a) The transition period shall commence on the effective date of this amendatory Act of the 101st General Assembly and shall end as determined by the board, consistent with and in the application of its fiduciary responsibilities, but in no event later than 30 months thereafter. (b) The board may retain the services of custodians, investment consultants, and other professional services it deems prudent to implement the transition of assets described in this Section. The permanent board of trustees shall not be bound by any contract or agreement regarding such custodians, investment consultants, or other professional services entered into by the transition board of trustees. (c) As soon as practicable after the effective date of this amendatory Act of the 101st General Assembly, the board, in cooperation with the Department of Insurance, shall audit the investment assets of each transferor pension fund to determine a certified investment asset list for each transferor pension fund. The audit shall be performed by a certified public accountant engaged by the board, and the board shall be responsible for payment of the costs and expenses associated with the audit. Upon completion of the audit for any transferor pension fund, the board and the Department of Insurance shall provide the certified investment asset list to that transferor pension fund. Upon determination of the certified investment asset list for any transferor pension fund, the board shall, within 10 business days or as soon thereafter as may be practicable as determined by the board, initiate the transfer of assets from that transferor pension fund. Further and to maintain accuracy of the certified investment asset list, upon determination of the certified investment asset list for a transferor pension fund, that fund shall not purchase or sell any of its pension fund assets. (d) When the Fund is prepared to receive pension fund assets from any transferor pension fund, the executive director shall notify in writing the board of trustees of that transferor pension fund of the Fund's intent to assume fiduciary control of those pension fund assets, and the date at which it will assume such control and that the transferor pension fund will cease to exercise fiduciary responsibility. This letter shall be transmitted no less than 30 days prior to the transfer date. A copy of the letter shall be transmitted to the Department of Insurance. Upon receipt of the letter, the transferor pension fund shall promptly notify its custodian, as well as any and all entities with fiduciary control of any portion of the pension assets. Each transferor pension fund shall have sole fiduciary and statutory responsibility for the management of its pension assets until the start of business on the transfer date. At the start of business on the transfer date, statutory and fiduciary responsibility for the investment of pension fund assets shall shift exclusively to the Fund and the Fund shall promptly and prudently transfer all such pension fund assets to the board and terminate the relationship with the local custodian of that transferor pension fund. The Fund shall provide a receipt for the transfer to the transferor pension fund within 30 days of the transfer date. As used in this subsection, "transfer date" means the date at which the Fund will assume fiduciary control of the transferor pension fund's assets and the transferor pension fund will cease to exercise fiduciary responsibility. (e) Within 90 days after the end of the transition period or as soon thereafter as may be practicable as determined by the board, the Fund and the Department of Insurance shall cooperate in transferring to the Fund all pension fund assets remaining in the custody of the transferor pension funds. (f) The board shall adopt such rules as in its judgment are desirable to implement the transition process, including, without limitation, the transfer of the pension fund assets of the transferor pension funds, the assumption of fiduciary control of such assets by the Fund, and the termination of relationships with local custodians. The adoption and effectiveness of such rules and regulations shall not be subject to Article 5 of the Illinois Administrative Procedure Act. (g) Within 6 months after the end of the transition period or as soon thereafter as may be practicable as determined by the board, the books, records, accounts, and securities of the Fund shall be audited by a certified public accountant selected by the board. This audit shall include, but not be limited to, the following: (1) a full description of the investments acquired, showing average costs; (2) a full description of the securities sold or exchanged, showing average proceeds or other conditions of an exchange; (3) gains or losses realized during the period; (4) income from investments; and (5) administrative expenses incurred by the board. This audit report shall be published on the Fund's official website and filed with the Department of Insurance. (h) To provide funds for payment of the ordinary and regular costs associated with the implementation of this transition process, the Illinois Finance Authority is authorized to loan to the Fund up to $7,500,000 of any of the Authority's funds, including, but not limited to, funds in its Illinois Housing Partnership Program Fund, its Industrial Project Insurance Fund, or its Illinois Venture Investment Fund, for such purpose. Such loan shall be repaid by the Fund with an interest rate tied to the Federal Funds Rate or an equivalent market established variable rate. The Fund and the Illinois Finance Authority shall enter into a loan or similar agreement that specifies the period of the loan, the payment interval, procedures for making periodic loans, the variable rate methodology to which the interest rate for loans should be tied, the funds of the Illinois Finance Authority that will be used to provide the loan, and such other terms that the Fund and the Illinois Finance Authority reasonably believe to be mutually beneficial. Such agreement shall be a public record and the Fund shall post the terms of the agreement on its official website.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-121 (40 ILCS 5/22B-121) Sec. 22B-121. Management and direction of investments. (a) The board shall have the authority to manage the pension fund assets of the transferor pension funds for the purpose of obtaining a total return on investments for the long term. (b) The authority of the board to manage pension fund assets and the liability shall begin when there has been a physical transfer of the pension fund assets to the Fund and placed in the custody of the Fund's custodian or custodians, as described in Section 22B-123. (c) The pension fund assets of the Fund shall be maintained in accounts held outside the State treasury. Moneys in those accounts are not subject to administrative charges or chargebacks, including, but not limited to, those authorized under the State Finance Act. (d) The board may not delegate its management functions, but it may, but is not required to, arrange to compensate for personalized investment advisory service for any or all investments under its control with any national or state bank or trust company authorized to do a trust business and domiciled in Illinois, other financial institution organized under the laws of Illinois, or an investment advisor who is qualified under the federal Investment Advisers Act of 1940 and is registered under the Illinois Securities Law of 1953. Nothing contained in this Article prevents the board from subscribing to general investment research services available for purchase or use by others. The board shall also have the authority to compensate for accounting services. (e) This Section does not prohibit the board from directly investing pension fund assets in public market investments, private investments, real estate investments, or other investments authorized by this Code.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-122 (40 ILCS 5/22B-122) Sec. 22B-122. Investment authority. The Fund shall have the authority to invest funds, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of this Code. The Fund shall not be subject to any of the limitations applicable to investments of pension fund assets by the transferor pension funds under Sections 1-113.1 through 1-113.12 or Article 3 of this Code. The Fund shall not, for purposes of Article 1 of this Code, be deemed to be a retirement system, pension fund, or investment board whose investments are restricted by Section 1-113.2 of this Code, and, as a result, the Fund shall be subject to the provisions of Section 1-109.1, including, but not limited to: utilization of emerging investment managers; increasing racial, ethnic, and gender diversity of its fiduciaries; utilization of businesses owned by minorities, women, and persons with disabilities; utilization of minority broker-dealers; utilization of minority investment managers; and applicable reporting requirements. No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in Section 6 of the Public Funds Investment Act shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time. The Fund shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction. All investments shall be clearly held and accounted for to indicate ownership by the Fund. The Fund 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 the Fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-123 (40 ILCS 5/22B-123) Sec. 22B-123. Custodian. The pension fund assets transferred to or otherwise acquired by the Fund shall be placed in the custody of a custodian who shall provide adequate safe deposit facilities for those assets and hold all such securities, funds, and other assets subject to the order of the Fund. Each custodian shall furnish a corporate surety bond of such amount as the board designates, which bond shall indemnify the Fund, the board, and the officers and employees of the Fund against any loss that may result from any action or failure to act by the custodian or any of the custodian's agents. All charges incidental to the procuring and giving of any bond shall be paid by the board and each bond shall be in the custody of the board.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22B-124 (40 ILCS 5/22B-124) Sec. 22B-124. Accounting for pension fund assets. In the management of the pension fund assets of the transferor pension funds, the Fund: (1) shall carry all pension fund assets at fair | | market value determined in accordance with generally accepted accounting principles and accounting procedures approved by the board. Each investment initially transferred to the Fund by a transferor pension fund shall be similarly valued, except that the board may elect to place such value on any investment conditionally in which case, the amount of any later realization of such asset in cash that is in excess of or is less than the amount so credited shall be credited or charged to the account maintained for the transferor pension fund that made the transfer;
|
| (2) shall keep proper books of account that shall
| | reflect at all times the value of all investments held by the Fund; and
|
| (3) shall charge all distributions made by the Fund
| | to or for a transferor pension fund to the account maintained for that fund.
|
|
(Source: P.A. 101-610, eff. 1-1-20.)
|
40 ILCS 5/22B-125 (40 ILCS 5/22B-125) Sec. 22B-125. Audits and reports. (a) At least annually, the books, records, accounts, and securities of the Fund shall be audited by a certified public accountant selected by the board and conducted in accordance with the rules and procedures promulgated by the Governmental Accounting Standards Board. The audit opinion shall be published as a part of the annual report of the Fund, which shall be submitted to the transferor pension funds and to the Department of Insurance. (b) For the quarterly periods ending September 30, December 31, and March 31, the Fund shall submit to the participating pension funds and to the Department of Insurance a report providing, among other things, the following information: (1) a full description of the investments acquired, | | (2) a full description of the securities sold or
| | exchanged, showing average proceeds or other conditions of an exchange;
|
| (3) gains or losses realized during the period;
(4) income from investments; and
(5) administrative expenses.
(c) An annual report shall be prepared by the Fund for submission to the participating pension funds and to the Department of Insurance within 6 months after the close of each fiscal year. A fiscal year shall date from July 1 of one year to June 30 of the year next following. This report shall contain full information concerning the results of investment operations of the Fund. This report shall include the information described in subsection (b) and, in addition thereto, the following information:
(1) a listing of the investments held by the Fund at
| | the end of the year, showing their book values and market values and their income yields on market values;
|
| (2) comments on the pertinent factors affecting such
| | (3) a review of the policies maintained by the Fund
| | and any changes that occurred during the year;
|
| (4) a copy of the audited financial statements for
| | (5) recommendations for possible changes in this
| | Article or otherwise governing the operations of the Fund; and
|
| (6) a listing of the names of securities brokers and
| | dealers dealt with during the year showing the total amount of commissions received by each on transactions with the Fund.
|
|
(Source: P.A. 101-610, eff. 1-1-20.)
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40 ILCS 5/Art. 22C
(40 ILCS 5/Art. 22C heading)
ARTICLE 22C. THE FIREFIGHTERS' PENSION INVESTMENT FUND
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-101 (40 ILCS 5/22C-101) Sec. 22C-101. Establishment. The Firefighters' Pension Investment Fund is created with authority to manage the reserves, funds, assets, securities, properties, and moneys of the firefighter pension funds created pursuant to Article 4 of this Code, all as provided in this Article.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-102 (40 ILCS 5/22C-102) Sec. 22C-102. Definitions. For the purposes of this Article, the following words and phrases shall have the meaning ascribed to them unless the context requires otherwise.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-103 (40 ILCS 5/22C-103) Sec. 22C-103. Fund. "Fund" means the Firefighters' Pension Investment Fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-104 (40 ILCS 5/22C-104) Sec. 22C-104. Transferor pension fund. "Transferor pension fund" means any pension fund established pursuant to Article 4 of this Code.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-105 (40 ILCS 5/22C-105) Sec. 22C-105. Participating pension fund. "Participating pension fund" means any pension fund established pursuant to Article 4 of this Code that has transferred securities, funds, assets, and moneys, and responsibility for custody and control of those securities, funds, assets, and moneys, to the Fund pursuant to Section 4-123.2.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-106 (40 ILCS 5/22C-106) Sec. 22C-106. Pension fund assets. "Pension fund assets" means the reserves, funds, assets, securities, and moneys of any transferor pension fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-107 (40 ILCS 5/22C-107) Sec. 22C-107. Invest. "Invest" means to acquire, invest, reinvest, exchange, or retain pension fund assets of the transferor pension funds and to sell and manage the reserves, funds, securities, moneys, or assets of the transferor pension fund, all in accordance with this Article.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-108 (40 ILCS 5/22C-108) Sec. 22C-108. Investment advisor. "Investment advisor" means any person or business entity that provides investment advice to the board on a personalized basis and with an understanding of the policies and goals of the board. "Investment advisor" does not include any person or business entity that provides statistical or general market research data available for purchase or use by others.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-112 (40 ILCS 5/22C-112) Sec. 22C-112. Transition period. "Transition period" means the period immediately following the effective date of this amendatory Act of the 101st General Assembly during which pension fund assets, and responsibility for custody and control of those assets, will be transferred from the transferor pension funds to the board, as described in Section 22C-120.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-113 (40 ILCS 5/22C-113) Sec. 22C-113. Illinois Municipal League. "Illinois Municipal League" means the unincorporated, nonprofit, nonpolitical association of Illinois cities, villages, and incorporated towns described in Section 1-8-1 of the Illinois Municipal Code.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-114 (40 ILCS 5/22C-114) Sec. 22C-114. Purpose, establishment, and governance. The Fund is established to consolidate the transferor pension funds to streamline investments and eliminate unnecessary and redundant administrative costs, thereby ensuring more money is available to fund pension benefits for the beneficiaries of the transferor pension funds. The transition board trustees and permanent board trustees of the Fund shall be fiduciaries for the participants and beneficiaries of the participating pension funds and shall discharge their duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries. Further, the transition board trustees and permanent board trustees, acting prudently and as fiduciaries, shall take all reasonable steps to ensure that all of the transferor pension funds are treated equitably and that the financial condition of one participating pension fund, including, but not limited to, pension benefit funding levels and ratios, will have no effect on the financial condition of any other transferor pension fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-115 (40 ILCS 5/22C-115) Sec. 22C-115. Board of Trustees of the Fund. (a) No later than February 1, 2020 (one month after the effective date of Public Act 101-610) or as soon thereafter as may be practicable, the Governor shall appoint, by and with the advice and consent of the Senate, a transition board of trustees consisting of 9 members as follows: (1) three members representing municipalities and | | fire protection districts who are mayors, presidents, chief executive officers, chief financial officers, or other officers, executives, or department heads of municipalities or fire protection districts and appointed from among candidates recommended by the Illinois Municipal League;
|
| (2) three members representing participants who are
| | participants and appointed from among candidates recommended by the statewide labor organization representing firefighters employed by at least 85 municipalities that is affiliated with the Illinois State Federation of Labor;
|
| (3) one member representing beneficiaries who is a
| | beneficiary and appointed from among the candidate or candidates recommended by the statewide labor organization representing firefighters employed by at least 85 municipalities that is affiliated with the Illinois State Federation of Labor;
|
| (4) one member recommended by the Illinois Municipal
| | (5) one member who is a participant recommended by
| | the statewide labor organization representing firefighters employed by at least 85 municipalities and that is affiliated with the Illinois State Federation of Labor.
|
| The transition board members shall serve until the initial permanent board members are elected and qualified.
The transition board of trustees shall select the chairperson of the transition board of trustees from among the trustees for the duration of the
transition board's tenure.
(b) The permanent board of trustees shall consist of 9 members comprised as follows:
(1) Three members who are mayors, presidents, chief
| | executive officers, chief financial officers, or other officers, executives, or department heads of municipalities or fire protection districts that have participating pension funds and are elected by the mayors and presidents of municipalities or fire protection districts that have participating pension funds.
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| (2) Three members who are participants of
| | participating pension funds and elected by the participants of participating pension funds.
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| (3) One member who is a beneficiary of a
| | participating pension fund and is elected by the beneficiaries of participating pension funds.
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| (4) One member recommended by the Illinois
| | Municipal League who shall be appointed by the Governor with the advice and consent of the Senate.
|
| (5) One member recommended by the statewide labor
| | organization representing firefighters employed by at least 85 municipalities and that is affiliated with the Illinois State Federation of Labor who shall be appointed by the Governor with the advice and consent of the Senate.
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| The permanent board of trustees shall select the chairperson of the permanent board of trustees from among the trustees for a term of 2 years. The holder of the office of chairperson shall alternate between a person elected or appointed under item (1) or (4) of this subsection (b) and a person elected or appointed under item (2), (3), or (5) of this subsection (b).
(c) Each trustee shall qualify by taking an oath of office before the Secretary of State or the Board's appointed legal counsel stating that he or she will diligently and honestly administer the affairs of the board and will not violate or knowingly permit the violation of any provision of this Article.
(d) Trustees shall receive no salary for service on the board but shall be reimbursed for travel expenses incurred while on business for the board.
A municipality or fire protection district employing a firefighter who is an elected or appointed trustee of the board must allow reasonable time off with compensation for the firefighter to conduct official business related to his or her position on the board, including time for travel. The board shall notify the municipality or fire protection district in advance of the dates, times, and locations of this official business. The Fund shall timely reimburse the municipality or fire protection district for the reasonable costs incurred that are due to the firefighter's absence.
(e) No trustee shall have any interest in any brokerage fee, commission, or other profit or gain arising out of any investment directed by the board. This subsection does not preclude ownership by any member of any minority interest in any common stock or any corporate obligation in which an investment is directed by the board.
(f) Notwithstanding any provision or interpretation of law to the contrary, any member of the transition board may also be elected or appointed as a member of the permanent board.
Notwithstanding any provision or interpretation of law to the contrary, any trustee of a fund established under Article 4 of this Code may also be appointed as a member of the transition board or elected or appointed as a member of the permanent board.
The restriction in Section 3.1 of the Lobbyist Registration Act shall not apply to a member of the transition board appointed pursuant to items (4) or (5) of subsection (a) or to a member of the permanent board appointed pursuant to items (4) or (5) of subsection (b).
(Source: P.A. 102-558, eff. 8-20-21; 103-552, eff. 8-11-23.)
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40 ILCS 5/22C-116 (40 ILCS 5/22C-116) Sec. 22C-116. Conduct and administration of elections; terms of office. (a) For the election of the permanent trustees, the transition board shall administer the initial elections and the permanent board shall administer all subsequent elections. Each board shall develop and implement such procedures as it determines to be appropriate for the conduct of such elections. For the purposes of obtaining information necessary to conduct elections under this Section, participating pension funds shall cooperate with the Fund. (b) All nominations for election shall be by petition. Each petition for a trustee shall be executed as follows: (1) for trustees to be elected by the mayors and | | presidents of municipalities or fire protection districts that have participating pension funds, by at least 20 such mayors and presidents; except that this item (1) shall apply only with respect to participating pension funds;
|
| (2) for trustees to be elected by participants, by at
| | least 400 participants; and
|
| (3) for trustees to be elected by beneficiaries, by
| | at least 100 beneficiaries.
|
| (c) A separate ballot shall be used for each class of trustee. The board shall prepare and send ballots and ballot envelopes to eligible voters in accordance with rules adopted by the board. The ballots shall contain the names of all candidates in alphabetical order.
Eligible voters, upon receipt of the ballot, shall vote the ballot and place it in the ballot envelope, seal the envelope, and return the ballot to the Fund.
The board shall set a final date for ballot return, and ballots received prior to that date in a ballot envelope shall be valid ballots.
The board shall set a day for counting the ballots and name judges and clerks of election to conduct the count of ballots and shall make any rules necessary for the conduct of the count.
The candidate or candidates receiving the highest number of votes for each class of trustee shall be elected. In the case of a tie vote, the winner shall be determined in accordance with procedures developed by the Department of Insurance.
In lieu of conducting elections via mail balloting as described in this Section, the board may instead adopt rules to provide for elections to be carried out solely via Internet balloting or phone balloting. Nothing in this Section prohibits the Fund from contracting with a third party to administer the election in accordance with this Section.
(d) At any election, voting shall be as follows:
(1) Each person authorized to vote for an elected
| | trustee may cast one vote for each related position for which such person is entitled to vote and may cast such vote for any candidate or candidates on the ballot for such trustee position.
|
| (2) If only one candidate for each position is
| | properly nominated in petitions received, that candidate shall be deemed the winner and no election under this Section shall be required.
|
| (3) The results shall be entered in the minutes of
| | the first meeting of the board following the tally of votes.
|
| (e) The initial election for permanent trustees shall be held and the permanent board shall be seated no later than 12 months after the effective date of this amendatory Act of the 101st General Assembly. Each subsequent election shall be held no later than 30 days prior to the end of the term of the incumbent trustees.
(f) The elected trustees shall each serve for terms of 4 years commencing on the first business day of the first month after election; except that the terms of office of the initially elected trustees shall be as follows:
(1) One trustee elected pursuant to item (1) of
| | subsection (b) of Section 22C-115 shall serve for a term of 2 years and 2 trustees elected pursuant to item (1) of subsection (b) of Section 22C-115 shall serve for a term of 4 years;
|
| (2) One trustee elected pursuant to item (2) of
| | subsection (b) of Section 22C-115 shall serve for a term of 2 years and 2 trustees elected pursuant to item (2) of subsection (b) of Section 22C-115 shall serve for a term of 4 years; and
|
| (3) The trustee elected pursuant to item (3) of
| | subsection (b) of Section 22C-115 shall serve for a term of 2 years.
|
| (g) The trustees appointed pursuant to items (4) and (5) of subsection (b) of Section 22C-115 shall each serve for a term of 4 years commencing on the first business day of the first month after the election of the elected trustees.
(h) A member of the board who was elected pursuant to item (1) of subsection (b) of Section 22C-115 who ceases to serve as a mayor, president, chief executive officer, chief financial officer, or other officer, executive, or department head of a municipality or fire protection district that has a participating pension fund shall not be eligible to serve as a member of the board and his or her position shall be deemed vacant. A member of the board who was elected by the participants of participating pension funds who ceases to be a participant may serve the remainder of his or her elected term.
For a vacancy of an elected trustee, the vacancy shall be filled by appointment by the board as follows: a vacancy of a member elected pursuant to item (1) of subsection (b) of Section 22C-115 shall be filled by a mayor, president, chief executive officer, chief financial officer, or other officer, executive, or department head of a municipality or fire protection district that has a participating pension fund; a vacancy of a member elected pursuant to item (2) of subsection (b) of Section 22C-115 shall be filled by a participant of a participating pension fund; and a vacancy of a member elected under item (3) of subsection (b) of Section 22C-115 shall be filled by a beneficiary of a participating pension fund. A trustee appointed to fill the vacancy of an elected trustee shall serve until a successor is elected. Special elections to fill the remainder of an unexpired term vacated by an elected trustee shall be held concurrently with and in the same manner as the next regular election for an elected trustee position.
Vacancies among the appointed trustees shall be filled for unexpired terms by appointment in like manner as for the original appointments.
(Source: P.A. 103-552, eff. 8-11-23.)
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40 ILCS 5/22C-117 (40 ILCS 5/22C-117) Sec. 22C-117. Meetings of the board. (a) The transition board and the permanent board shall each meet at least quarterly and otherwise upon written request of either the Chairperson or 3 other members. The Chairperson shall preside over meetings of the board. The executive director and personnel of the board shall prepare agendas and materials and required postings for meetings of the board. (b) Six members of the board shall constitute a quorum. (c) All actions taken by the transition board and the permanent board shall require a vote of least 5 trustees, except that the following shall require a vote of at least 6 trustees: the adoption of actuarial assumptions; the selection of the chief investment officer, fiduciary counsel, or a consultant as defined under Section 1-101.5 of this Code; the adoption of rules for the conduct of election of trustees; and the adoption of asset allocation policies and investment policies.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-118 (40 ILCS 5/22C-118) Sec. 22C-118. Operation and administration of the Fund. (a) The operation and administration of the Fund shall be managed by an executive director. No later than 2 months after the transition board is appointed or as soon thereafter as may be practicable, the transition board shall appoint an interim executive director who shall serve until a permanent executive director is appointed by the board, with such appointment to be made no later than 6 months after the end of the transition period. The executive director shall act subject to and under the supervision of the board and the board shall fix the compensation of the executive director. (b) The board may appoint one or more custodians to facilitate the transfer of pension fund assets during the transition period, and subsequently to provide custodial and related fiduciary services on behalf of the board, and enter into contracts for such services. The board may also appoint external legal counsel and an independent auditing firm and may appoint investment advisors and other consultants as it determines to be appropriate and enter into contracts for such services. With approval of the board, the executive director may retain such other consultants, advisors, fiduciaries, and service providers as may be desirable and enter into contracts for such services. (c) The board shall separately calculate account balances for each participating pension fund. The operations and financial condition of each participating pension fund account shall not affect the account balance of any other participating pension fund. Further, investment returns earned by the Fund shall be allocated and distributed pro rata among each participating pension fund account in accordance with the value of the pension fund assets attributable to each fund. (d) With approval of the board, the executive director may employ such personnel, professional or clerical, as may be desirable and fix their compensation. The appointment and compensation of the personnel, including the executive director, shall not be subject to the Personnel Code. (e) The board shall annually adopt a budget to support its operations and administration. The board shall apply moneys derived from the pension fund assets transferred and under its control to pay the costs and expenses incurred in the operation and administration of the Fund. The board shall from time to time transfer moneys and other assets to the participating pension funds as required for the participating pension funds to pay expenses, benefits, and other required payments to beneficiaries in the amounts and at the times prescribed in this Code. (f) The board may exercise any of the powers granted to boards of trustees of pension funds under Sections 1-107 and 1-108 of this Code and may by resolution provide for the indemnification of its members and any of its officers, advisors, or employees in a manner consistent with those Sections. (g) An office for meetings of the board and for its administrative personnel shall be established at any suitable place within the State as may be selected by the board. All books and records of the board shall be kept in such office. (h) The board shall contract for a blanket fidelity bond in the penal sum of not less than $1,000,000 to cover members of the board of trustees, the executive director, and all other employees of the board, conditioned for the faithful performance of the duties of their respective offices, the premium on which shall be paid by the board.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-119 (40 ILCS 5/22C-119) Sec. 22C-119. Adoption of rules. The board shall adopt such rules (not inconsistent with this Code) as in its judgment are desirable to implement and properly administer this Article. Such rules shall specifically provide for the following: (1) the implementation of the transition process described in Section 22C-120; (2) the process by which the participating pension funds may request transfer of funds; (3) the process for the transfer in, receipt for, and investment of pension assets received by the Fund after the transition period from the participating pension funds; (4) the process by which contributions from municipalities and fire protection districts for the benefit of the participating pension funds may, but are not required to, be directly transferred to the Fund; and (5) compensation and benefits for its employees. A copy of the rules adopted by the Fund shall be posted on the Fund's website. The adoption and effectiveness of such rules shall not be subject to Article 5 of the Illinois Administrative Procedure Act.
(Source: P.A. 103-552, eff. 8-11-23.) |
40 ILCS 5/22C-120 (40 ILCS 5/22C-120) Sec. 22C-120. Transition period; transfer of securities, assets, and investment functions. (a) The transition period shall commence on the effective date of this amendatory Act of the 101st General Assembly and shall end as determined by the board, consistent with and in the application of its fiduciary responsibilities, but in no event later than 30 months thereafter. (b) The board may retain the services of custodians, investment consultants, and other professional services it deems prudent to implement the transition of assets described in this Section. The permanent board of trustees shall not be bound by any contract or agreement regarding such custodians, investment consultants, or other professional services entered into by the transition board of trustees. (c) As soon as practicable after the effective date of this amendatory Act of the 101st General Assembly, the board, in cooperation with the Department of Insurance, shall audit the investment assets of each transferor pension fund to determine a certified investment asset list for each transferor pension fund. The audit shall be performed by a certified public accountant engaged by the board, and the board shall be responsible for payment of the costs and expenses associated with the audit. Upon completion of the audit for any transferor pension fund, the board and the Department of Insurance shall provide the certified investment asset list to that transferor pension fund. Upon determination of the certified investment asset list for any transferor pension fund, the board shall, within 10 business days or as soon thereafter as may be practicable, as determined by the board, initiate the transfer of assets from that transferor pension fund. Further and to maintain accuracy of the certified investment asset list, upon determination of the certified investment asset list for a transferor pension fund, that fund shall not purchase or sell any of its pension fund assets. (d) When the Fund is prepared to receive pension fund assets from any transferor pension fund, the executive director shall notify in writing the board of trustees of that transferor pension fund of the Fund's intent to assume fiduciary control of those pension fund assets, and the date at which it will assume such control and that the transferor pension fund will cease to exercise fiduciary responsibility. This letter shall be transmitted no less than 30 days prior to the transfer date. A copy of the letter shall be transmitted to the Department of Insurance. Upon receipt of the letter, the transferor pension fund shall promptly notify its custodian, as well as any and all entities with fiduciary control of any portion of the pension assets. Each transferor pension fund shall have sole fiduciary and statutory responsibility for the management of its pension assets until the start of business on the transfer date. At the start of business on the transfer date, statutory and fiduciary responsibility for the investment of pension fund assets shall shift exclusively to the Fund and the Fund shall promptly and prudently transfer all such pension fund assets to the board and terminate the relationship with the local custodian of that transferor pension fund. The Fund shall provide a receipt for the transfer to the transferor pension fund within 30 days of the transfer date. As used in this subsection, "transfer date" means the date at which the Fund will assume fiduciary control of the transferor pension fund's assets and the transferor pension fund will cease to exercise fiduciary responsibility. (e) Within 90 days after the end of the transition period or as soon thereafter as may be practicable as determined by the board, the Fund and the Department of Insurance shall cooperate in transferring to the Fund all pension fund assets remaining in the custody of the transferor pension funds. (f) The board shall adopt such rules as in its judgment are desirable to implement the transition process, including, without limitation, the transfer of the pension fund assets of the transferor pension funds, the assumption of fiduciary control of such assets by the Fund, and the termination of relationships with local custodians. The adoption and effectiveness of such rules and regulations shall not be subject to Article 5 of the Illinois Administrative Procedure Act. (g) Within 6 months after the end of the transition period or as soon thereafter as may be practicable as determined by the board, the books, records, accounts, and securities of the Fund shall be audited by a certified public accountant selected by the board. This audit shall include, but not be limited to, the following: (1) a full description of the investments acquired, showing average costs; (2) a full description of the securities sold or exchanged, showing average proceeds or other conditions of an exchange; (3) gains or losses realized during the period; (4) income from investments; and (5) administrative expenses incurred by the board. This audit report shall be published on the Fund's official website and filed with the Department of Insurance. (h) To provide funds for payment of the ordinary and regular costs associated with the implementation of this transition process, the Illinois Finance Authority is authorized to loan to the Fund up to $7,500,000 of any of the Authority's funds, including, but not limited to, funds in its Illinois Housing Partnership Program Fund, its Industrial Project Insurance Fund, or its Illinois Venture Investment Fund, for such purpose. Such loan shall be repaid by the Fund with an interest rate tied to the Federal Funds Rate or an equivalent market established variable rate. The Fund and the Illinois Finance Authority shall enter into a loan or similar agreement that specifies the period of the loan, the payment interval, procedures for making periodic loans, the variable rate methodology to which the interest rate for loans should be tied, the funds of the Illinois Finance Authority that will be used to provide the loan, and such other terms that the Fund and the Illinois Finance Authority reasonably believe to be mutually beneficial. Such agreement shall be a public record and the Fund shall post the terms of the agreement on its official website.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-121 (40 ILCS 5/22C-121) Sec. 22C-121. Management and direction of investments. (a) The board shall have the authority to manage the pension fund assets of the transferor pension funds for the purpose of obtaining a total return on investments for the long term. (b) The authority of the board to manage pension fund assets and the liability shall begin when there has been a physical transfer of the pension fund assets to the Fund and placed in the custody of the Fund's custodian or custodians, as described in Section 22C-123. (c) The pension fund assets of the Fund shall be maintained in accounts held outside the State treasury. Moneys in those accounts are not subject to administrative charges or chargebacks, including, but not limited to, those authorized under the State Finance Act. (d) The board may not delegate its management functions, but it may, but is not required to, arrange to compensate for personalized investment advisory service for any or all investments under its control with any national or state bank or trust company authorized to do a trust business and domiciled in Illinois, other financial institution organized under the laws of Illinois, or an investment advisor who is qualified under the federal Investment Advisers Act of 1940 and is registered under the Illinois Securities Law of 1953. Nothing contained in this Article prevents the board from subscribing to general investment research services available for purchase or use by others. The board shall also have the authority to compensate for accounting services. (e) This Section does not prohibit the board from directly investing pension fund assets in public market investments, private investments, real estate investments, or other investments authorized by this Code.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-122 (40 ILCS 5/22C-122) Sec. 22C-122. Investment authority. The Fund shall have the authority to invest funds, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114, and 1-115 of this Code. The Fund shall not be subject to any of the limitations applicable to investments of pension fund assets by the transferor pension funds under Sections 1-113.1 through 1-113.12 or Article 4 of this Code. The Fund shall not, for purposes of Article 1 of this Code, be deemed to be a retirement system, pension fund, or investment board whose investments are restricted by Section 1-113.2 of this Code, and, as a result, the Fund shall be subject to the provisions of Section 1-109.1, including, but not limited to: utilization of emerging investment managers; increasing racial, ethnic, and gender diversity of its fiduciaries; utilization of businesses owned by minorities, women, and persons with disabilities; utilization of minority broker-dealers; utilization of minority investment managers; and applicable reporting requirements. No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act. The limitations set forth in Section 6 of the Public Funds Investment Act shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time. The Fund shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction. All investments shall be clearly held and accounted for to indicate ownership by the Fund. The Fund 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 the Fund.
(Source: P.A. 101-610, eff. 1-1-20.) |
40 ILCS 5/22C-123 (40 ILCS 5/22C-123) Sec. 22C-123. Custodian. The pension fund assets transferred to or otherwise acquired by the Fund shall be placed in the custody of a custodian who shall provide adequate safe deposit facilities for those assets and hold all such securities, funds, and other assets subject to the order of the Fund. Each custodian shall furnish a corporate surety bond of such amount as the board designates, which bond shall indemnify the Fund, the board, and the officers and employees of the Fund against any loss that may result from any action or failure to act by the custodian or any of the custodian's agents, or provide insurance coverages of such type and limits as the board designates. All charges incidental to the procuring and giving of any bond shall be paid by the board and each bond shall be in the custody of the board.
(Source: P.A. 103-552, eff. 8-11-23.) |
40 ILCS 5/22C-124 (40 ILCS 5/22C-124) Sec. 22C-124. Accounting for pension fund assets. In the management of the pension fund assets of the transferor pension funds, the Fund: (1) shall carry all pension fund assets at fair | | market value determined in accordance with generally accepted accounting principles and accounting procedures approved by the board. Each investment initially transferred to the Fund by a transferor pension fund shall be similarly valued, except that the board may elect to place such value on any investment conditionally in which case, the amount of any later realization of such asset in cash that is in excess of or is less than the amount so credited shall be credited or charged to the account maintained for the transferor pension fund that made the transfer;
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| (2) shall keep proper books of account that shall
| | reflect at all times the value of all investments held by the Fund; and
|
| (3) shall charge all distributions made by the Fund
| | to or for a transferor pension fund to the account maintained for that fund.
|
|
(Source: P.A. 101-610, eff. 1-1-20.)
|
40 ILCS 5/22C-125 (40 ILCS 5/22C-125) Sec. 22C-125. Audits and reports. (a) At least annually, the books, records, accounts, and securities of the Fund shall be audited by a certified public accountant selected by the board and conducted in accordance with the rules and procedures promulgated by the Governmental Accounting Standards Board. The audit opinion shall be published as a part of the annual report of the Fund, which shall be submitted to the transferor pension funds and to the Department of Insurance. (b) For the quarterly periods ending September 30, December 31, and March 31, the Fund shall submit to the participating pension funds and to the Department of Insurance a report providing, among other things, the following information: (1) a full description of the investments acquired, | | (2) a full description of the securities sold or
| | exchanged, showing average proceeds or other conditions of an exchange;
|
| (3) gains or losses realized during the period;
(4) income from investments; and
(5) administrative expenses.
(c) An annual report shall be prepared by the Fund for submission to the participating pension funds and to the Department of Insurance within 6 months after the close of each fiscal year. A fiscal year shall date from July 1 of one year to June 30 of the year next following. This report shall contain full information concerning the results of investment operations of the Fund. This report shall include the information described in subsection (b) and, in addition thereto, the following information:
(1) a listing of the investments held by the Fund at
| | the end of the year, showing their book values and market values and their income yields on market values;
|
| (2) comments on the pertinent factors affecting such
| | (3) a review of the policies maintained by the Fund
| | and any changes that occurred during the year;
|
| (4) a copy of the audited financial statements for
| | (5) recommendations for possible changes in this
| | Article or otherwise governing the operations of the Fund; and
|
| (6) a listing of the names of securities brokers and
| | dealers dealt with during the year showing the total amount of commissions received by each on transactions with the Fund.
|
|
(Source: P.A. 101-610, eff. 1-1-20.)
|
40 ILCS 5/Art. 23
(40 ILCS 5/Art. 23 heading)
ARTICLE 23.
PURPOSE--SAVINGS PROVISIONS--REPEAL
|
40 ILCS 5/23-101
(40 ILCS 5/23-101) (from Ch. 108 1/2, par. 23-101)
Sec. 23-101.
Purpose-Savings provisions.
It is the purpose of this Code to restate, simplify and codify the
respective Acts and parts of Acts repealed by Section 23-102 which
immediately prior to the effective date of this Code governed the publicly
supported retirement systems, annuity and benefit funds and related pension
and benefit Acts. All such systems and funds shall remain separate and
distinct entities. It is intended that this Code shall grant no lesser or
greater rights, credits, equities, pensions or other benefits than existed
under such Acts or parts of Acts so repealed and incorporated as separate
Articles and Divisions of this Code, immediately prior to the effective
date of this Code, except as they may be changed hereafter by specific
amendment to this Code; and all such rights, credits, equities, annuities,
pensions and other benefits are preserved without change, and without loss
or impairment, precisely as if such Acts or parts of Acts had not been
repealed.
In like manner, any rights in annuities, pensions or other benefits
derived from and in force or which would have come into force under any
Acts or parts of Acts repealed by Section 23-102 and not continued in any
Article or Division of this Code shall be preserved without change, loss or
impairment, precisely as if such Acts or parts of Acts had not been
repealed.
The repeal of any Acts or parts of Acts specified in Section 23-102
shall not affect the validity of any taxes levied or extended under such
Acts or parts of Acts, or of any appropriation ordinances adopted pursuant
thereto, or of any warrants issued against and in anticipation of such
taxes, nor shall the repeal of any Acts or parts of Acts validating and
legalizing appropriation or tax levy ordinances, or both, affect the
validity or operative force of such curative Acts or parts of Acts as
enacted.
The repeal of any Act or parts of Acts specified in Section 23-102
shall not affect the validity of any act, decision, determination or other
authority exercised by any retirement board, or other public officer or
agency pursuant to the powers and duties conferred under such Acts or parts
of Acts, nor shall such repeal affect the validity or course of any
judicial or administrative proceeding or action undertaken and pending or
completed on the effective date of this Code.
(Source: Laws 1963, p. 161.)
|
40 ILCS 5/23-102
(40 ILCS 5/23-102) (from Ch. 108 1/2, par. 23-102)
Sec. 23-102.
Repeal.
The following Acts and parts of Acts are repealed except as provided
in Section 23-103:
(1) Divisions 6 through 12, inclusive, of Article 10 of the
"Illinois Municipal Code", approved May 29, 1961, as amended.
(2) "AN ACT to create a firemen's pension fund in cities,
incorporated towns, villages, townships and fire protection districts
having a population of not less than 5,000 nor more than 200,000
inhabitants", filed July 11, 1919, as amended.
(3) "AN ACT to provide for the creation, setting apart, maintenance
and administration of a municipal employees', officers', and officials'
annuity and benefit fund in cities having a population exceeding two
hundred thousand inhabitants", approved June 29, 1921, as amended.
(4) "AN ACT to provide for the creation, setting apart, maintenance,
and administration of a laborers' and retirement board employees'
annuity and benefit fund in cities having a population exceeding two
hundred thousand inhabitants", approved June 21, 1935, as amended.
(5) "AN ACT to provide for the creation and operation of a
retirement and benefit fund for the benefit of certain officers and
employees, and their beneficiaries, of cities having a population of not
more than two hundred thousand inhabitants, villages, incorporated
towns, counties having a population of not more than five hundred
thousand inhabitants, certain other local governmental districts in the
State, and instrumentalities thereof, and of organizations which are
created by the Statutes of the State of Illinois to perform services for
the above, and to supersede certain other pension and benefit funds",
filed July 29, 1939, as amended.
(6) "AN ACT to provide for the creation, setting apart, maintenance
and administration of a county employees' and officers' annuity and
benefit fund in counties having a population exceeding five hundred
thousand inhabitants", approved July 2, 1925, as amended.
(7) "AN ACT for the creation, maintenance and administration of a
Judges Retirement System in order to provide annuities for Judges upon
their retirement and for their widows", approved July 21, 1941, as
amended.
(8) "AN ACT to provide for the creation, setting apart, maintenance
and administration of a Sanitary District Employees' and Trustees
Annuity and Benefit Fund in sanitary districts organized under an Act
entitled 'An Act to create sanitary districts and to remove obstructions
in the Des Plaines and Illinois Rivers', approved May 29, 1889, as
amended, and including within their territorial limits two or more
cities, villages, or towns having a total population exceeding one
million inhabitants", approved July 7, 1931, as amended.
(9) Section 9a of "AN ACT to provide for the creation and management
of forest preserve districts and repealing certain acts therein named",
approved June 27, 1913, as amended.
(10) "AN ACT for the creation, maintenance and administration of a
general Assembly members' and presiding officers' retirement system, to
provide retirement annuities to the participants thereof, and widows'
annuities and other benefits to their beneficiaries upon death", filed
July 8, 1947, as amended.
(11) "AN ACT to provide for the setting apart, formation and
disbursement of a house of correction employees pension fund in cities
having a population exceeding 150,000 inhabitants", approved June 10,
1911, as amended.
(12) "AN ACT to provide for the formation and disbursement of a
public library employees' pension fund in cities having a population
exceeding 500,000 inhabitants", approved May 12, 1905, as amended.
(13) "AN ACT to provide for the creation, setting apart, formation,
administration and disbursement of a park employes' and retirement board
employes' annuity and benefit fund", approved June 21, 1919, as
amended.
(14) Article 25 of "The School Code", approved March 18, 1961, as
amended.
(15) Sections 34-88 to 34-116, inclusive, of Article 34 of "The
School Code", approved March 18, 1961, as amended.
(16) "AN ACT to provide for the creation, maintenance and
administration of a retirement and benefit system for certain officers
and employees of the State of Illinois, their dependents and
beneficiaries", approved July 23, 1943, as amended.
(17) "AN ACT to provide for the creation, maintenance, and
administration of a Retirement System for the benefit of the staff
members and employees of the State universities and certain affiliated
organizations, certain other state educational and scientific agencies,
and the survivors, dependents and other beneficiaries of such
employees", approved July 21, 1941, as amended.
(18) "AN ACT to provide for the creation, setting apart, maintenance
and administration of a Municipal Court and Law Department Employees'
Annuity and Benefit Fund in cities having a population of more than two
hundred thousand (200,000) inhabitants in which any Municipal Court has
been or shall be established and maintained in accordance with law",
approved July 8, 1935, as amended.
(19) "AN ACT to provide for the creation, setting apart, maintenance
and administration of a Park Policemen's and Retirement Board Employees'
Annuity and Benefit Fund", approved June 29, 1921, as amended.
(20) "AN ACT to provide for service credits for annuity and pension
purposes in cities having a population exceeding five hundred thousand
(500,000) inhabitants", approved July 12, 1937.
(21) "AN ACT entitled An Act to establish the nature and character
of annuity and benefit funds and other pension funds created by the
legislature of the State of Illinois, the contributions to such funds,
and payments from such funds", approved July 18, 1945.
(22) "AN ACT to establish continuity and preservation of pension
credit for employees in Governmental service in the State of Illinois",
approved July 11, 1955, as amended.
(23) "AN ACT to provide for reciprocal allowance of credits for
retirement, death and disability benefits between the State Employees'
Retirement System of Illinois, the University Retirement System of
Illinois and the Teachers' Retirement System of the State of Illinois,
and for the transfer of certain funds between said systems", approved
August 8, 1947, as amended.
(24) "AN ACT to provide for the coverage of certain officers and
employees of the State and its political subdivisions and of the
instrumentalities of either, under the old-age, survivors, and
disability insurance provisions of the Federal Social Security Act, to
provide for the administration of such a coverage program and to make an
appropriation for its administration", approved August 6, 1951, as
amended.
(25) "AN ACT in relation to the examination, investigation and
supervision of pension, annuity and retirement funds or systems for the
benefit of employees and officers of governmental units in the State of
Illinois, to provide means to insure compliance with the laws
establishing such funds, and to repeal an Act herein named", approved
July 20, 1949, as amended.
(26) "AN ACT to provide for the setting apart, formation and
disbursement of a police pension fund in cities, villages and
incorporated towns", approved April 29, 1887, as amended.
(27) "AN ACT to provide for the setting apart, formation and
disbursement of a police pension fund in cities having a population
exceeding two hundred thousand inhabitants", approved June 29, 1915, as
amended.
(28) "AN ACT to provide for a firemen's pension fund and to create a
board of trustees to administer said fund in cities having a population
exceeding two hundred thousand (200,000) inhabitants", filed June 14,
1917, as amended.
(29) "AN ACT for the relief of disabled members of the police and
fire departments in cities and villages", approved May 24, 1877, as
amended.
(30) "AN ACT to provide for the creation, setting apart, maintenance
and administration of a firemen's annuity and benefit fund in cities,
townships, villages and incorporated towns having a population of not
less than ten thousand nor more than one hundred thousand inhabitants",
approved July 31, 1943.
(31) "AN ACT to provide for the formation and disbursement of a
municipal employees' pension fund in cities having a population
exceeding one hundred thousand inhabitants", approved May 16, 1905, as
amended.
(32) "AN ACT to legalize and validate appropriations and tax levy
ordinances and taxes for fiscal years 1957 and 1958 in counties of not
less than 500,000 for County Employees Annuity and Benefit Fund",
approved April 6, 1959.
(33) "AN ACT relating to a tax by certain park districts for the
purpose of making contributions to municipal police pension funds",
approved July 11, 1957, as amended.
(34) Sections 11 and 55 1/2 of "AN ACT to provide for the creation,
setting apart, maintenance and administration of a firemen's annuity and
benefit fund in cities having a population exceeding five hundred
thousand inhabitants", approved June 12, 1931, as amended.
(35) Sections 11, 35, and 54 1/2 of "AN ACT to provide for the
creation, setting apart, maintenance and administration of a policemen's
annuity and benefit fund in cities having a population exceeding two
hundred thousand inhabitants", approved June 29, 1921, as amended.
(36) "AN ACT to provide for the setting apart, formation,
administration and disbursement of a park police pension fund", filed
May 19, 1917, as amended.
(37) "AN ACT creating a Commission for the further study of pension
and annuity and benefit laws relating to employees and officers in
governmental service, to define its powers and duties, and to make
appropriations therefor", approved July 17, 1959.
(Source: Laws 1963, p. 161.)
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40 ILCS 5/23-103
(40 ILCS 5/23-103) (from Ch. 108 1/2, par. 23-103)
Sec. 23-103.
Construction.
Nothing in this Code shall be construed to repeal any section of the
various Acts of which this Code is comprised when such section is the
subject of an amendment enacted by the Seventy-third General Assembly and
which becomes law. Furthermore, it is the intent of the General Assembly
that the corresponding section of this Code shall be construed with such
amended section so as to give effect to such amendment as if it was made a
part of this Code.
(Source: Laws 1963, p. 161.)
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40 ILCS 5/Art. 24
(40 ILCS 5/Art. 24 heading)
ARTICLE 24.
PUBLIC EMPLOYEES'
DEFERRED COMPENSATION
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40 ILCS 5/24-101
(40 ILCS 5/24-101) (from Ch. 108 1/2, par. 24-101)
Sec. 24-101.
Notwithstanding any law to the contrary, the State of
Illinois or any unit of local government or school district may enter
into a written contract with any of its employees to defer a part of
their gross compensation and may invest such funds in any
such manner as prescribed by the deferred compensation program adopted
by it under this Article. Compensation deferred pursuant to a deferred
compensation program adopted under this Article shall not exceed the amount
of compensation allowed to be deferred without being subject to income tax
in the year in which it is earned, pursuant to Section 457 of the United
States Internal Revenue Code or laws supplementary or amendatory thereto.
It is hereby declared to be in the public interest to provide public employees
with a plan for the deferral of compensation and the accrual of income and
gain thereon if such deferred compensation be invested, and to encourage
the continued service of public employees by making available such benefits to them.
(Source: P.A. 82-145.)
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40 ILCS 5/24-102
(40 ILCS 5/24-102) (from Ch. 108 1/2, par. 24-102)
Sec. 24-102.
As used in this Article, "employee" means any person,
including a person elected, appointed or under contract, receiving
compensation from the State or a unit of local government or school
district for personal services rendered, including salaried persons. However, "employee", for the purposes of the State Employees Deferred Compensation Plan established under Section 24-104, does not include a person employed by an employer under Section 15-106 who first becomes a participant of the retirement system under Article 15 on or after July 1, 2023 unless the person has made an election to defer compensation into the State Employees Deferred Compensation Plan under a written agreement and the deferral election is in effect as of June 30, 2023. A health care provider who elects to participate in the State Employees Deferred Compensation Plan established under Section 24-104 of this Code shall, for purposes of that participation, be deemed an "employee" as defined in this Section.
As used in this Article, "health care provider" means a dentist, physician, optometrist, pharmacist, or podiatric physician that participates and receives compensation as a provider under the Illinois Public Aid Code, the Children's Health Insurance Act, or the Covering ALL KIDS Health Insurance Act. As used in this Article, "compensation" includes compensation received
in a lump sum for accumulated unused vacation, personal leave or sick leave, with the exception of health care providers. "Compensation" with respect to health care providers is defined under the Illinois Public Aid Code, the Children's Health Insurance Act, or the Covering ALL KIDS Health Insurance Act.
Where applicable, in no event shall the total of the amount of deferred compensation of an
employee set aside in relation to a particular year under the Illinois
State Employees Deferred Compensation Plan and the employee's
nondeferred compensation for that year exceed the total annual salary or
compensation under the existing salary schedule or classification plan
applicable to such employee in such year; except that any compensation
received in a lump sum for accumulated unused vacation, personal leave or sick
leave shall not be included in the calculation of such totals.
(Source: P.A. 102-540, eff. 8-20-21.)
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40 ILCS 5/24-103
(40 ILCS 5/24-103) (from Ch. 108 1/2, par. 24-103)
Sec. 24-103.
The deferred compensation program established by this
Article shall exist and serve in addition to other retirement, pension and
benefit systems established by the State, units of local government or
school districts. Any compensation deferred under such a plan shall
continue to be included as regular compensation for the purpose of
computing the retirement and pension benefits earned by any employee, to
the extent that such inclusion is not inconsistent with the other
applicable Articles of this Code.
(Source: P.A. 84-878.)
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40 ILCS 5/24-104 (40 ILCS 5/24-104) (from Ch. 108 1/2, par. 24-104) Sec. 24-104. State Employees Deferred Compensation Plan. In this Section, "Plan" means the State Employees Deferred Compensation Plan. The Illinois State Board of Investment created under Article 22A of this Act shall develop and establish a deferred compensation plan for employees of the State which shall be known as the State Employees Deferred Compensation Plan. The Plan shall provide for the Board to review proposed investment offerings and shall require that only investments determined to be acceptable by the Board may be used for investing compensation deferred. The Plan shall include appropriate provisions pertaining to its day to day operation providing for methods of electing to defer income, methods of changing the amount of income to be deferred, methods of selecting from among investment options available under the plan and such other provisions as may be appropriate. In administering the Plan, the Board shall require that the Plan recordkeeper agree that, in performing services with respect to the Plan, the recordkeeper: (i) will not use information received as a result of providing services with respect to the Plan or the Plan's participants to solicit the Plan's participants for the purpose of cross-selling non-Plan products and services, unless in response to a request by a Plan participant; and (ii) will not promote, recommend, endorse, or solicit Plan participants to purchase any financial products or services outside of the Plan, except that links to parts of the recordkeeper's website that are generally available to the public, are about commercial products, and may be encountered by a Plan participant in the regular course of navigating the recordkeeper's website will not constitute a violation of this item (ii). The Plan shall provide for the preparation, and distribution from time to time to all eligible State employees, of pamphlets describing the Plan and outlining the options and opportunities available to State employees under the Plan. The Plan established under this Section shall not be implemented or amended until the Board is satisfied that compensation deferred under the Plan is not subject to income tax for the year in which it is earned and that the taxation of such compensation will be deferred until the time of its distribution to the employee. The Board shall also review and oversee the administration of the Plan.(Source: P.A. 103-552, eff. 8-11-23.) |
40 ILCS 5/24-104.1
(40 ILCS 5/24-104.1) (from Ch. 108 1/2, par. 24-104.1)
Sec. 24-104.1.
The Plan developed under Section 24-104 shall also provide
for the recovery of the expenses of its administration by charging such
expenses against the earnings from investments or by charging fees equitably
prorated among the participating State employees or by such other appropriate
and equitable method as the Board shall determine. Different methods for
recovery of administrative expenses may be provided in relation to different
types of investment programs and the Board may provide for the allocation
of administration expenses among varying types of programs for this purpose.
All sums advanced by appropriation to the State Board of Investment
for the costs of the development and establishment of the Plan shall be
repaid to the State Treasury not later than June 30, 1986, without interest.
The Plan shall provide for such repayment and may, for that purpose, provide
for the recovery of the development and establishment costs by amortizing
them as a part of the administrative expenses of the Plan over a period
of years ending not later than June 30, 1986.
(Source: P.A. 79-384.)
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40 ILCS 5/24-104.2 (40 ILCS 5/24-104.2)
Sec. 24-104.2. Health care providers; tax-exempt status. Health care providers may participate in the Illinois State Employees Deferred Compensation Plan to the extent that the health care providers' participation does not interfere with the Plan's tax-exempt status under the Internal Revenue Code.
(Source: P.A. 96-806, eff. 7-1-10.) |
40 ILCS 5/24-105
(40 ILCS 5/24-105) (from Ch. 108 1/2, par. 24-105)
Sec. 24-105.
The State Employees Deferred Compensation Plan shall be
administered by the Department of Central Management Services
subject to the general
supervision of the Illinois State Board of Investment. Participation in
such plan shall be by a specific written agreement between each such
employee and the State which agreement shall provide for the deferral of
such amount of compensation as requested by the employee. With each
distribution of compensation to a participating employee, the employee
shall receive a memorandum of the amount by which his gross compensation
for the period involved is reduced by reason of the deferment of
compensation, which amount shall not be included as a part of his gross
compensation as to that period.
Funds retained by the State as deferred compensation pursuant to a
written deferred compensation agreement between the State and
participating employees, may be invested in such investments as are
deemed acceptable by the Illinois State Board of Investment including,
but not limited to, life insurance or annuity contracts or mutual funds.
All such insurance, annuities, mutual funds, or other such investments
utilized under this Plan shall have been reviewed and selected by the
Board based on a competitive bidding process as established by such
specifications and considerations as are deemed appropriate by the
Board. Nothing in this Section should be construed as requiring a
limitation on the number and variety of insurance, annuity or mutual
fund contracts which may be selected as a result of this bidding
process. The State Board of Investment may also invest any funds retained
by the State pursuant to a written deferred compensation agreement between
the State and participating employees in share accounts or share certificate
accounts of State or federal credit unions, the accounts of which are insured
as required by The Illinois Credit Union Act or the Federal Credit Union
Act, as applicable. If a participating employee fails to direct the investment of amounts deferred into the various investment options offered to the participant, the amounts deferred shall be invested in the Plan's default investment fund and the investment shall be deemed to have been made at the participant's investment direction. Any income and gain resulting from the investment of
a deferred compensation account may be paid to the participant as additional
compensation
for continued service during the period of participation or be used in part
for administrative expenses, all in accordance with the plan. Such investments
and payments shall not be construed to be prohibited uses of the general
assets of the State.
(Source: P.A. 101-277, eff. 1-1-20.)
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40 ILCS 5/24-105.1
(40 ILCS 5/24-105.1)
Sec. 24-105.1. Changes in federal law. (a) To the extent that federal law or
regulations which require a governmental employer to own the assets of its
deferred compensation plan are changed to allow plans established under Section
457 of the Internal Revenue Code to hold their assets in trust, a custodial
account, an annuity contract, an insurance contract or some other contract, the
Department of Central Management Services and units of local government with
plans established under Section 24-107 shall within a reasonable time amend
their plans accordingly.
(b) To the extent that federal law or
regulations have been changed to allow plans established under Section
457 of the Internal Revenue Code to be amended to allow designated Roth contributions and in-plan rollovers to designated Roth accounts, the
Department of Central Management Services and units of local government with
plans established under Section 24-107 shall within a reasonable time amend
their plans accordingly. (Source: P.A. 98-491, eff. 1-1-14.)
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40 ILCS 5/24-105.2 (40 ILCS 5/24-105.2) Sec. 24-105.2. Automatic enrollment for certain employees. The Department of Central Management Services shall automatically enroll in the State Employees Deferred Compensation Plan any employee who, on or after July 1, 2020, becomes an active member or participant of a retirement system created under Article 2, 14, or 18. Any agency with employees subject to automatic enrollment must systematically provide the employee data necessary for enrollment to the Department of Central Management Services or its designee. An employee automatically enrolled under this Section shall have 3% of his or her pre-tax gross compensation for each compensation period deferred into his or her deferred compensation account. The Board may increase the default percentage amount of compensation deferred into employee accounts. An employee hired on or after January 1, 2024 shall be automatically enrolled in the Plan beginning the first day of the pay period following the close of the notice period, unless the employee elects otherwise within the notice period. During the notice period, an employee may elect to not participate in the Plan or to increase or reduce the amount of pre-tax gross compensation deferred. For the purposes of this Section, "notice period" means a reasonable period of time after the employee is provided with an automatic enrollment notice as required under Section 414(w) of the Internal Revenue Code of 1986, as amended. An employee who has been automatically enrolled in the Plan may elect, within 90 days after enrollment, to withdraw from the Plan and receive a refund of amounts deferred, plus or minus any applicable earnings, investment fees, and administrative fees. An employee making such an election shall forfeit all employer matching contributions, if any, made prior to the election. Any refunded amount shall be included in the employee's gross income for the taxable year in which the refund is issued. An employee hired on or after July 1, 2020 and before January 1, 2024 shall have 30 days from the start date of employment to elect to not participate in the deferred compensation plan or to elect to increase or reduce the amount of pre-tax gross compensation deferred. An employee shall be automatically enrolled in the Plan beginning the first day of the pay period following the employee's thirtieth day of employment. An employee who has been automatically enrolled in the Plan may elect, within 90 days of enrollment, to withdraw from the Plan and receive a refund of amounts deferred, plus or minus any applicable earnings, investment fees, and administrative fees. An employee making such an election shall forfeit all employer matching contributions, if any, made prior to the election. Any refunded amount shall be included in the employee's gross income for the taxable year in which the refund is issued.
As soon as practicable, the Board shall establish annual, automatic increases to employee contribution rates for employees who are automatically enrolled in the Plan pursuant to this Section. The amount of automatic annual increases in any 12-month period shall not exceed 1% of compensation. Employees may elect to not receive automatic annual increases in a manner described by the Board.(Source: P.A. 102-219, eff. 7-30-21; 103-552, eff. 8-11-23.) |
40 ILCS 5/24-106
(40 ILCS 5/24-106) (from Ch. 108 1/2, par. 24-106)
Sec. 24-106.
The State or the unit of local government or school district under a
deferred compensation program shall be obligated at any point in time
solely for the then current value of the particular fixed or variable life
insurance or annuity contract, mutual funds or other investment purchased
on behalf of any employee.
(Source: P.A. 78-1277.)
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40 ILCS 5/24-107
(40 ILCS 5/24-107) (from Ch. 108 1/2, par. 24-107)
Sec. 24-107. Local government plans.
(a) Any unit of local government or school district may
establish for its employees a deferred compensation plan.
Participation shall be by written agreement between each employee and
the legislative authority of the unit of local government or school
district providing for the deferral of such compensation and the
subsequent investment and administration of such funds.
(b) Any unit of local government may establish an employer-funded
money purchase retirement plan for those of its full time employees who are
not eligible to participate in any pension fund or retirement system
established under Articles 2 through 18 of this Code. Contributions to the
plan shall be made by the unit of local government only from general
purpose funds not derived from real property taxes imposed by the unit, at
a rate to be determined from time to time by the unit of local government.
However, the rate of employer contribution shall be (i) the same for all
employees participating in the plan, and (ii) not more than 10% of the
employee's salary.
Any benefits accruing to the participants in a retirement plan
established under this subsection shall be protected from impairment in
accordance with Article XIII, Section 5 of the Illinois Constitution.
However, the unit of local government establishing such a plan may
terminate it at any time, unless it has otherwise contractually agreed
with its participating employees.
(c) The agency or department designated by the unit of local government
or school district to establish and administer a plan or program authorized
under subsection (a) or (b) of this Section may invest the assets of the
plan in investments deemed appropriate by the agency or
department, including but not limited to life insurance or annuity
contracts, and share or share certificate accounts of State or federal
credit unions, the accounts of which are insured as required by the
Illinois Credit Union Act or the Federal Credit Union Act, whichever is
applicable. The payment of employer contributions to a retirement
plan established under subsection (b), and investment and
payment to a participant of deferred compensation and income or gain
thereon, if any, shall not be construed to be prohibited uses of the
general assets of the unit of local government or school district.
This Section does not limit the power or authority of any unit of
local government, school district or any institution supported in whole
or in part by public funds to establish and administer any other
deferred compensation plans that may be authorized by law and deemed
appropriate by the officials of such subdivisions or institutions.
(d) In administering the deferred compensation plans authorized under this Section, the governing board or administrators of the sponsoring unit of local government or school district shall require that the deferred compensation plan recordkeeper agree that, in performing services with respect to the deferred compensation plan, the recordkeeper: (i) will not use information received as a result of providing services with respect to the deferred compensation plan or the deferred compensation plan's participants to solicit the participants in the deferred compensation plan for the purpose of cross-selling nonplan products and services, unless in response to a request by a participant in the deferred compensation plan; and (ii) will not promote, recommend, endorse, or solicit participants in the deferred compensation plan to purchase any financial products or services outside of the deferred compensation plan, except that links to parts of the recordkeeper's website that are generally available to the public, are about commercial products, and may be encountered by a Plan participant in the regular course of navigating the recordkeeper's website will not constitute a violation of this item (ii). (Source: P.A. 103-552, eff. 8-11-23.)
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40 ILCS 5/24-108
(40 ILCS 5/24-108) (from Ch. 108 1/2, par. 24-108)
Sec. 24-108.
In the event that any fireman is transferred to a municipal
fire department as a consequence of the absorption of a fire protection
district occurring prior to January 1, 1980, and such fireman has entered
into a deferred compensation and/or annuity contract with the absorbing
municipality pursuant to Section 24-101, then notwithstanding Section 4-142,
such municipality may make contributions to the deferred compensation or
annuity program on such fireman's behalf, and any such contributions made
prior to the effective date of this amendatory Act of 1981 are hereby validated.
(Source: P.A. 82-179.)
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40 ILCS 5/24-109
(40 ILCS 5/24-109) (from Ch. 108 1/2, par. 24-109)
Sec. 24-109.
Football Coaches.
(a) Any football coach employed by the Board of Trustees of Chicago State
University, the Board of Trustees of Eastern Illinois University, the Board of
Trustees of Governors State University, the Board of Trustees of Illinois State
University, the Board of Trustees of Northeastern Illinois University, the
Board of Trustees of Northern Illinois University, the Board of Trustees of
Western Illinois University, the University of Illinois
Board of Trustees, or the Southern Illinois University System Board of
Trustees, may participate in the American Football Coaches Retirement Trust
in accordance with the conditions of that Trust, of this Section, and of
applicable federal law.
(b) A football coach who elects to participate in the Trust may defer a
part of his compensation as a coach by making employee contributions to the
Trust. Amounts deferred by the coach under this Section shall be deemed a
part of the coach's compensation for purposes of participation in the State
Universities Retirement System but, in accordance with the U.S. Internal
Revenue Code of 1986, shall not be included in the computation of federal
income taxes withheld on behalf of the coach. The employing institution of
higher education shall not make any employer contributions to the Trust on
behalf of the coach.
(c) A football coach who participates in the Trust may not participate
in any other program of deferred compensation under this Article during any
year in which he makes contributions to the Trust.
(d) Participation in the Trust shall be administered by
the institution of higher education that employs the
coach. Each such institution shall report annually to the General
Assembly on the status of the Trust and
participation under this Section.
(e) The right to participate in the Trust that is granted by this
Section is subject to future limitation, and shall not be deemed to be a
pension benefit that is protected from impairment under Section 5 of
Article XIII of the Illinois Constitution.
(Source: P.A. 90-14, eff. 7-1-97.)
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