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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/Art. 1

 
    (40 ILCS 5/Art. 1 heading)
ARTICLE 1. GENERAL PROVISIONS:
SHORT TITLE, EFFECT OF CODE AND OTHER PROVISIONS

40 ILCS 5/1-101

    (40 ILCS 5/1-101) (from Ch. 108 1/2, par. 1-101)
    Sec. 1-101. Short title.
    This Code shall be known and may be cited as the Illinois Pension Code.
(Source: Laws 1963, p. 161.)

40 ILCS 5/1-101.1

    (40 ILCS 5/1-101.1) (from Ch. 108 1/2, par. 1-101.1)
    Sec. 1-101.1. Definitions. For purposes of this Article, unless the context otherwise requires, the words defined in the Sections following this Section and preceding Section 1-102 shall have meanings given in those Sections.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-101.2

    (40 ILCS 5/1-101.2)
    Sec. 1-101.2. Fiduciary. A person is a "fiduciary" with respect to a pension fund or retirement system established under this Code to the extent that the person:
        (1) exercises any discretionary authority or
    
discretionary control respecting management of the pension fund or retirement system, or exercises any authority or control respecting management or disposition of its assets;
        (2) renders investment advice or renders advice on
    
the selection of fiduciaries for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the pension fund or retirement system, or has any authority or responsibility to do so; or
        (3) has any discretionary authority or discretionary
    
responsibility in the administration of the pension fund or retirement system.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-101.3

    (40 ILCS 5/1-101.3)
    Sec. 1-101.3. Party in interest. A person is a "party in interest" with respect to a pension fund or retirement system established under this Code if the person is:
        (1) a fiduciary, counsel, or employee of the pension
    
fund or retirement system, or a relative of such a person;
        (2) a person providing services to the pension fund
    
or retirement system, or a relative of such a person;
        (3) an employer, any of whose employees are covered
    
by the pension fund or retirement system;
        (4) an employee organization, any members of which
    
are covered by the pension fund or retirement system; or
        (5) an employee, officer, or director (or an
    
individual having powers or responsibilities similar to those of an officer or director) of the pension fund or retirement system or of a person described under item (2), (3), or (4) of this Section.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-101.4

    (40 ILCS 5/1-101.4)
    Sec. 1-101.4. Investment adviser. A person is an "investment adviser", "investment advisor", or "investment manager" with respect to a pension fund or retirement system established under this Code if the person:
        (1) is a fiduciary appointed by the board of trustees
    
of the pension fund or retirement system in accordance with Section 1-109.1;
        (2) has the power to manage, acquire, or dispose of
    
any asset of the retirement system or pension fund;
        (3) has acknowledged in writing that he or she is a
    
fiduciary with respect to the pension fund or retirement system; and
        (4) is at least one of the following: (i) registered
    
as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-101.5

    (40 ILCS 5/1-101.5)
    Sec. 1-101.5. Consultant. "Consultant" means any person or entity retained or employed by the board of a retirement system, pension fund, or investment board to make recommendations in developing an investment strategy, assist with finding appropriate investment advisers, or monitor the board's investments. "Consultant" does not include non-investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy-voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships. "Investment adviser" has the meaning ascribed to it in Section 1-101.4.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-102

    (40 ILCS 5/1-102) (from Ch. 108 1/2, par. 1-102)
    Sec. 1-102. Continuation of prior statutes.
    The provisions of this Code insofar as they are the same or substantially the same as those of any prior statute, shall be construed as a continuation of such prior statute and not as a new enactment.
    If in any other statute reference is made to an Act of the General Assembly, or a Section of such an Act, which is continued in this Code, such reference shall be held to refer to the Act or Section thereof so continued in this Code.
(Source: Laws 1963, p. 161.)

40 ILCS 5/1-103

    (40 ILCS 5/1-103) (from Ch. 108 1/2, par. 1-103)
    Sec. 1-103. Effect of headings.
    Article, Division and Section headings contained herein shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions of any Article, Division or Section hereof.
(Source: Laws 1963, p. 161.)

40 ILCS 5/1-103.1

    (40 ILCS 5/1-103.1) (from Ch. 108 1/2, par. 1-103.1)
    Sec. 1-103.1. Application of amendments.
    Amendments to this Code which have been or may be enacted shall be applicable only to persons who, on or after the effective date thereof, are in service as an employee under the retirement system or pension fund covered by the Article which is amended, unless the amendatory Act specifies otherwise.
(Source: P.A. 77-1415.)

40 ILCS 5/1-103.2

    (40 ILCS 5/1-103.2) (from Ch. 108 1/2, par. 1-103.2)
    Sec. 1-103.2. The amendatory provisions of this amendatory Act of 1987 which provide for benefit increases effective July 1, 1987 or January 1, 1988 are intended to be retroactive to the dates specified therein, notwithstanding the provisions of Section 1-103.1.
(Source: P.A. 85-941.)

40 ILCS 5/1-103.3

    (40 ILCS 5/1-103.3)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 1-103.3. Application of 1994 amendment; funding standard.
    (a) The provisions of Public Act 88-593 that change the method of calculating, certifying, and paying the required State contributions to the retirement systems established under Articles 2, 14, 15, 16, and 18 shall first apply to the State contributions required for State fiscal year 1996.
    (b) (Blank).
    (c) Every 5 years, beginning in 1999, the Commission on Government Forecasting and Accountability, in consultation with the affected retirement systems and the Governor's Office of Management and Budget (formerly Bureau of the Budget), shall consider and determine whether the funding goals adopted in Articles 2, 14, 15, 16, and 18 of this Code continue to represent appropriate funding goals for those retirement systems, and it shall report its findings and recommendations on this subject to the Governor and the General Assembly.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 1-103.3. Application of 1994 amendment; funding standard.
    (a) The provisions of this amendatory Act of 1994 that change the method of calculating, certifying, and paying the required State contributions to the retirement systems established under Articles 2, 14, 15, 16, and 18 shall first apply to the State contributions required for State fiscal year 1996.
    (b) The General Assembly declares that a funding ratio (the ratio of a retirement system's total assets to its total actuarial liabilities) of 90% is an appropriate goal for State-funded retirement systems in Illinois, and it finds that a funding ratio of 90% is now the generally-recognized norm throughout the nation for public employee retirement systems that are considered to be financially secure and funded in an appropriate and responsible manner.
    (c) Every 5 years, beginning in 1999, the Commission on Government Forecasting and Accountability, in consultation with the affected retirement systems and the Governor's Office of Management and Budget (formerly Bureau of the Budget), shall consider and determine whether the 90% funding ratio adopted in subsection (b) continues to represent an appropriate goal for State-funded retirement systems in Illinois, and it shall report its findings and recommendations on this subject to the Governor and the General Assembly.
(Source: P.A. 93-1067, eff. 1-15-05.)

40 ILCS 5/1-104

    (40 ILCS 5/1-104) (from Ch. 108 1/2, par. 1-104)
    Sec. 1-104. Cross references.
    Where, in this Code, reference is made to a Section, Division or Article by its number and no Act is specified, the reference is to the correspondingly numbered Section, Division or Article of this Code. Where reference is made to "this Article" or "this Division" or "this Section" and no Act is specified, the reference is to the Article, Division or Section of this Code in which the reference appears. If any Section, Division or Article of this Code is hereafter amended, the reference shall thereafter be treated and considered as a reference to the Section, Division or Article as so amended.
(Source: Laws 1963, p. 161.)

40 ILCS 5/1-104.1

    (40 ILCS 5/1-104.1) (from Ch. 108 1/2, par. 1-104.1)
    Sec. 1-104.1. Gender.
    Words or phrases as used in this Code that import the masculine gender shall be construed to import also the feminine gender, unless such construction would be inconsistent with the manifest intention of the context.
(Source: P.A. 78-1129.)

40 ILCS 5/1-104.2

    (40 ILCS 5/1-104.2) (from Ch. 108 1/2, par. 1-104.2)
    Sec. 1-104.2. Beginning January 1, 1986, children not conceived in lawful wedlock shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because of the fact that the child was born out of wedlock; however, in cases where the father is the employee parent, paternity must first be established. Paternity may be established by any one of the following means: (1) acknowledgment by the father, or (2) adjudication before or after the death of the father, or (3) any other means acceptable to the board of trustees of the pension fund or retirement system.
(Source: P.A. 94-229, eff. 1-1-06.)

40 ILCS 5/1-104.3

    (40 ILCS 5/1-104.3)
    Sec. 1-104.3. Adopted children. Notwithstanding any other provision of this Code to the contrary, beginning on the effective date of this amendatory Act of the 95th General Assembly, legally adopted children shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because the child is an adopted child. The provisions of this Section apply without regard to whether the employee or member was in service on or after the date of the adoption of the child.
(Source: P.A. 95-279, eff. 1-1-08.)

40 ILCS 5/1-105

    (40 ILCS 5/1-105) (from Ch. 108 1/2, par. 1-105)
    Sec. 1-105. Partial invalidity.
    The invalidity of any provision of this Code shall not affect the validity of the remainder of this Code.
(Source: Laws 1963, p. 161.)

40 ILCS 5/1-106

    (40 ILCS 5/1-106) (from Ch. 108 1/2, par. 1-106)
    Sec. 1-106. Payment of distribution other than direct.
    (a) The board of trustees of any retirement fund or system operating under this Code may, at the written direction and request of any annuitant, solely as an accommodation to the annuitant, pay the annuity due the annuitant to a bank, savings and loan association, or any other financial institution insured by an agency of the federal government, for deposit to the account of the annuitant, or to a bank, savings and loan association, or trust company for deposit in a trust established by the annuitant for his or her benefit with that bank, savings and loan association, or trust company. The annuitant may withdraw the direction at any time.
    (b) Beginning January 1, 1993, each pension fund or retirement system operating under this Code may, and to the extent required by federal law shall, at the request of any person entitled to receive a refund, lump-sum benefit, or other nonperiodic distribution from the pension fund or retirement system, pay the distribution directly to any entity that (1) is designated in writing by the person, (2) is qualified under federal law to accept an eligible rollover distribution from a qualified plan, and (3) has agreed to accept the distribution.
(Source: P.A. 96-586, eff. 8-18-09.)

40 ILCS 5/1-107

    (40 ILCS 5/1-107) (from Ch. 108 1/2, par. 1-107)
    Sec. 1-107. Indemnification of trustees, consultants and employees of retirement systems and pension funds. Every retirement system, pension fund or other system or fund established under this Code may indemnify and protect the trustees, staff and consultants against all damage claims and suits, including defense thereof, when damages are sought for negligent or wrongful acts alleged to have been committed in the scope of employment or under the direction of the trustees. However, the trustees, staff and consultants shall not be indemnified for wilful misconduct and gross negligence. Each board is authorized to insure against loss or liability of the trustees, staff and consultants which may result from these damage claims. This insurance shall be carried in a company which is licensed to write such coverage in this State.
(Source: P.A. 80-1364.)

40 ILCS 5/1-108

    (40 ILCS 5/1-108) (from Ch. 108 1/2, par. 1-108)
    Sec. 1-108. (a) In any proceeding commenced against an employee of a pension fund, alleging a civil wrong arising out of any act or omission occurring within the scope of the employee's pension fund employment, unless the court or the jury finds that the conduct which gave rise to the claim was intentional, wilful or wanton misconduct, the pension fund shall indemnify the employee for any damages awarded and court costs and attorneys' fees assessed as part of any final and unreversed judgment and any attorneys' fees, court costs and litigation expenses incurred by the employee in defending the claim. In any such proceeding if a majority of the board or trustees who are not a party to the action determine that the conduct which gave rise to the claim was not intentional, wilful or wanton misconduct, the board or trustees may agree to settlement of the proceeding and the pension fund shall indemnify the employee for any damages, court costs and attorneys' fees agreed to as part of the settlement and any attorneys' fees, court costs and litigation expenses incurred in defending the claim.
    (b) No employee of a pension fund shall be entitled to indemnification under this Section unless within 15 days after receipt by the employee of service of process, he shall give written notice of such proceeding to the pension fund.
    (c) Each pension fund may insure against loss or liability of employees which may arise as a result of these claims. This insurance shall be carried by a company authorized to provide such coverage in this State.
    (d) Nothing contained or implied in this Section shall operate, or be construed or applied, to deprive the State or a pension fund, or any other employee thereof, of any immunity or any defense heretofore available.
    (e) This Section shall apply regardless of whether the employee is sued in his or her individual or official capacity.
    (f) This Section shall not apply to claims for bodily injury or damage to property arising from motor vehicle accidents.
    (g) This Section shall apply to all proceedings filed on or after its effective date, and to any proceeding pending on its effective date, if the pension fund employee gives notice to the pension fund within 30 days of the Act's effective date.
(Source: P.A. 80-1078.)

40 ILCS 5/1-109

    (40 ILCS 5/1-109) (from Ch. 108 1/2, par. 1-109)
    Sec. 1-109. Duties of Fiduciaries. A fiduciary with respect to a retirement system or pension fund established under this Code shall discharge his or her duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries and:
    (a) For the exclusive purpose of:
    (1) Providing benefits to participants and their beneficiaries; and
    (2) Defraying reasonable expenses of administering the retirement system or pension fund;
    (b) With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims;
    (c) By diversifying the investments of the retirement system or pension fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
    (d) In accordance with the provisions of the Article of the Pension Code governing the retirement system or pension fund.
(Source: P.A. 82-960.)

40 ILCS 5/1-109.1

    (40 ILCS 5/1-109.1) (from Ch. 108 1/2, par. 1-109.1)
    Sec. 1-109.1. Allocation and delegation of fiduciary duties.
    (1) Subject to the provisions of Section 22A-113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may:
        (a) Appoint one or more investment managers as
    
fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and
        (b) Allocate duties among themselves and designate
    
others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.
    (2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code may not transfer its investment authority, nor transfer the assets of the fund to any other person or entity for the purpose of consolidating or merging its assets and management with any other pension fund or public investment authority, unless the board resolution authorizing such transfer is submitted for approval to the contributors and pensioners of the fund at elections held not less than 30 days after the adoption of such resolution by the board, and such resolution is approved by a majority of the votes cast on the question in both the contributors election and the pensioners election. The election procedures and qualifications governing the election of trustees shall govern the submission of resolutions for approval under this paragraph, insofar as they may be made applicable.
    (3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted.
    (4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $10,000,000,000 and is a "minority-owned business", "women-owned business" or "business owned by a person with a disability" as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.
    It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use emerging investment managers in managing their system's assets, encompassing all asset classes, and increase the racial, ethnic, and gender diversity of its fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards.
    On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for utilization of emerging investment managers. This policy shall include quantifiable goals for the management of assets in specific asset classes by emerging investment managers. The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) emerging investment managers that are minority-owned businesses; (ii) emerging investment managers that are women-owned businesses; and (iii) emerging investment managers that are businesses owned by a person with a disability. The goals established shall be based on the percentage of total dollar amount of investment service contracts let to minority-owned businesses, women-owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection.
    If in any case an emerging investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that emerging investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple emerging investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board.
    The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section.
    (5) Each retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall establish a policy that sets forth goals for increasing the racial, ethnic, and gender diversity of its fiduciaries, including its consultants and senior staff. Each system, fund, and investment board shall annually review the goals established under this subsection.
    (6) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for utilization of businesses owned by minorities, women, and persons with disabilities for all contracts and services. The goals established shall be based on the percentage of total dollar amount of all contracts let to minority-owned businesses, women-owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection.
    (7) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority broker-dealers. For the purposes of this Code, "minority broker-dealer" means a qualified broker-dealer who meets the definition of "minority-owned business", "women-owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this Section.
    (8) Each retirement system, pension fund, and investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall submit a report to the Governor and the General Assembly by January 1 of each year that includes the following: (i) the policy adopted under subsection (4) of this Section, including the names and addresses of the emerging investment managers used, percentage of the assets under the investment control of emerging investment managers for the 3 separate goals, and the actions it has undertaken to increase the use of emerging investment managers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises; (ii) the policy adopted under subsection (5) of this Section; (iii) the policy adopted under subsection (6) of this Section; (iv) the policy adopted under subsection (7) of this Section, including specific actions undertaken to increase the use of minority broker-dealers; and (v) the policy adopted under subsection (9) of this Section.
    (9) On or before February 1, 2015, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority investment managers. For the purposes of this Code, "minority investment manager" means a qualified investment manager that manages an investment portfolio and meets the definition of "minority-owned business", "women-owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.
    It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use minority investment managers in managing their systems' assets, encompassing all asset classes, and to increase the racial, ethnic, and gender diversity of their fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards.
    The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) minority investment managers that are minority-owned businesses; (ii) minority investment managers that are women-owned businesses; and (iii) minority investment managers that are businesses owned by a person with a disability. The retirement system, pension fund, or investment board shall annually review the goals established under this Section.
    If in any case a minority investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that minority investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple minority investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board.
    The use of a minority investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section.
    (10) Beginning January 1, 2016, it shall be the aspirational goal for a retirement system, pension fund, or investment board subject to this Code to use emerging investment managers for not less than 20% of the total funds under management. Furthermore, it shall be the aspirational goal that not less than 20% of investment advisors be minorities, women, and persons with disabilities as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. It shall be the aspirational goal to utilize businesses owned by minorities, women, and persons with disabilities for not less than 20% of contracts awarded for "information technology services", "accounting services", "insurance brokers", "architectural and engineering services", and "legal services" as those terms are defined in the Act.
(Source: P.A. 99-462, eff. 8-25-15; 100-391, eff. 8-25-17.)

40 ILCS 5/1-109.2

    (40 ILCS 5/1-109.2) (from Ch. 108 1/2, par. 1-109.2)
    Sec. 1-109.2. Extent of Cofiduciary Duties. (a) (1) Except to the extent otherwise required in subsection (b) of this Section, a fiduciary of a retirement system or pension fund to whom a specified duty has not been allocated shall not be responsible or liable for an act or omission, in connection with that duty, by the fiduciary to whom that duty has been allocated, except to the extent that the allocation, or the continuation thereof, is a violation of Section 1-109 of this Code. Nothing in this paragraph (1) shall be construed to relieve a fiduciary from responsibility or liability for any act by that fiduciary.
    (2) Except to the extent otherwise required in subsection (b) of this Section a fiduciary shall not be responsible or liable for an act or omission, in connection with a specific fiduciary activity, by any other person who has been designated to carry out that fiduciary activity, except to the extent that the designation, or the continuation thereof at any time under the circumstances then prevailing, is a violation of Section 1-109 of this Code. Nothing in this paragraph (2) shall be construed to relieve a fiduciary from responsibility for any act by that fiduciary.
    (b) With respect to any retirement system or pension fund established under this Code:
    (1) Each trustee shall use reasonable care to prevent any other trustee from committing a breach of duty; and
    (2) Subject to the provisions of Section 22A-113 of this Code, all trustees shall jointly manage and control the assets of the retirement system or pension fund.
    Nothing in this subsection (b) shall be construed to attribute a duty to a trustee which would be inconsistent with the appointment of, and delegation of authority to, an investment manager in accordance with paragraph (a) of Section 1-109.1 of this Code.
(Source: P.A. 82-960.)

40 ILCS 5/1-109.3

    (40 ILCS 5/1-109.3)
    Sec. 1-109.3. Training requirement for pension trustees.
    (a) All elected and appointed trustees under Article 3 and 4 of this Code must participate in a mandatory trustee certification training seminar that consists of at least 32 hours of initial trustee certification at a training facility that is accredited and affiliated with a State of Illinois certified college or university. This training must include without limitation all of the following:
        (1) Duties and liabilities of a fiduciary under
    
Article 1 of the Illinois Pension Code.
        (2) Adjudication of pension claims.
        (3) Basic accounting and actuarial training.
        (4) Trustee ethics.
        (5) The Illinois Open Meetings Act.
        (6) The Illinois Freedom of Information Act.
    The training required under this subsection (a) must be completed within the first year that a trustee is elected or appointed under an Article 3 or 4 pension fund. The elected and appointed trustees of an Article 3 or 4 pension fund who are police officers (as defined in Section 3-106 of this Code) or firefighters (as defined in Section 4-106 of this Code) or are employed by the municipality shall be permitted time away from their duties to attend such training without reduction of accrued leave or benefit time. Active or appointed trustees serving on the effective date of this amendatory Act of the 96th General Assembly shall not be required to attend the training required under this subsection (a).
    (b) In addition to the initial trustee certification training required under subsection (a), all elected and appointed trustees under Article 3 and 4 of this Code, including trustees serving on the effective date of this amendatory Act of the 96th General Assembly, shall also participate in a minimum of 16 hours of continuing trustee education each year after the first year that the trustee is elected or appointed.
    (c) The training required under this Section shall be paid for by the pension fund.
    (d) Any board member who does not timely complete the training required under this Section is not eligible to serve on the board of trustees of an Article 3 or 4 pension fund, unless the board member completes the missed training within 6 months after the date the member failed to complete the required training. In the event of a board member's failure to complete the required training, a successor shall be appointed or elected, as applicable, for the unexpired term. A successor who is elected under such circumstances must be elected at a special election called by the board and conducted in the same manner as a regular election under Article 3 or 4, as applicable.
(Source: P.A. 96-429, eff. 8-13-09.)

40 ILCS 5/1-110

    (40 ILCS 5/1-110) (from Ch. 108 1/2, par. 1-110)
    Sec. 1-110. Prohibited Transactions.
    (a) A fiduciary with respect to a retirement system, pension fund, or investment board shall not cause the retirement system or pension fund to engage in a transaction if he or she knows or should know that such transaction constitutes a direct or indirect:
        (1) Sale or exchange, or leasing of any property from
    
the retirement system or pension fund to a party in interest for less than adequate consideration, or from a party in interest to a retirement system or pension fund for more than adequate consideration.
        (2) Lending of money or other extension of credit
    
from the retirement system or pension fund to a party in interest without the receipt of adequate security and a reasonable rate of interest, or from a party in interest to a retirement system or pension fund with the provision of excessive security or an unreasonably high rate of interest.
        (3) Furnishing of goods, services or facilities from
    
the retirement system or pension fund to a party in interest for less than adequate consideration, or from a party in interest to a retirement system or pension fund for more than adequate consideration.
        (4) Transfer to, or use by or for the benefit of, a
    
party in interest of any assets of a retirement system or pension fund for less than adequate consideration.
    (b) A fiduciary with respect to a retirement system or pension fund established under this Code shall not:
        (1) Deal with the assets of the retirement system or
    
pension fund in his own interest or for his own account;
        (2) In his individual or any other capacity act in
    
any transaction involving the retirement system or pension fund on behalf of a party whose interests are adverse to the interests of the retirement system or pension fund or the interests of its participants or beneficiaries; or
        (3) Receive any consideration for his own personal
    
account from any party dealing with the retirement system or pension fund in connection with a transaction involving the assets of the retirement system or pension fund.
    (c) Nothing in this Section shall be construed to prohibit any trustee from:
        (1) Receiving any benefit to which he may be entitled
    
as a participant or beneficiary in the retirement system or pension fund.
        (2) Receiving any reimbursement of expenses properly
    
and actually incurred in the performance of his duties with the retirement system or pension fund.
        (3) Serving as a trustee in addition to being an
    
officer, employee, agent or other representative of a party in interest.
    (d) A fiduciary of a pension fund established under Article 3 or 4 shall not knowingly cause or advise the pension fund to engage in an investment transaction when the fiduciary (i) has any direct interest in the income, gains, or profits of the investment adviser through which the investment transaction is made or (ii) has a business relationship with that investment adviser that would result in a pecuniary benefit to the fiduciary as a result of the investment transaction.
    Violation of this subsection (d) is a Class 4 felony.
    (e) A board member, employee, or consultant with respect to a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2, shall not knowingly cause or advise the retirement system, pension fund, or investment board to engage in an investment transaction with an investment adviser when the board member, employee, consultant, or their spouse (i) has any direct interest in the income, gains, or profits of the investment adviser through which the investment transaction is made or (ii) has a relationship with that investment adviser that would result in a pecuniary benefit to the board member, employee, or consultant or spouse of such board member, employee, or consultant as a result of the investment transaction. For purposes of this subsection (e), a consultant includes an employee or agent of a consulting firm who has greater than 7.5% ownership of the consulting firm.
    Violation of this subsection (e) is a Class 4 felony.
(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)

40 ILCS 5/1-110.5

    (40 ILCS 5/1-110.5)
    Sec. 1-110.5. (Repealed).
(Source: P.A. 94-79, eff. 1-27-06. Repealed by P.A. 95-521, eff. 8-28-07.)

40 ILCS 5/1-110.6

    (40 ILCS 5/1-110.6)
    Sec. 1-110.6. Transactions prohibited by retirement systems; Republic of the Sudan.
    (a) The Government of the United States has determined that Sudan is a nation that sponsors terrorism and genocide. The General Assembly finds that acts of terrorism have caused injury and death to Illinois and United States residents who serve in the United States military, and pose a significant threat to safety and health in Illinois. The General Assembly finds that public employees and their families, including police officers and firefighters, are more likely than others to be affected by acts of terrorism. The General Assembly finds that Sudan continues to solicit investment and commercial activities by forbidden entities, including private market funds. The General Assembly finds that investments in forbidden entities are inherently and unduly risky, not in the interests of public pensioners and Illinois taxpayers, and against public policy. The General Assembly finds that Sudan's capacity to sponsor terrorism and genocide depends on or is supported by the activities of forbidden entities. The General Assembly further finds and re-affirms that the people of the State, acting through their representatives, do not want to be associated with forbidden entities, genocide, and terrorism.
    (b) For purposes of this Section:
    "Business operations" means maintaining, selling, or leasing equipment, facilities, personnel, or any other apparatus of business or commerce in the Republic of the Sudan, including the ownership or possession of real or personal property located in the Republic of the Sudan.
    "Certifying company" means a company that (1) directly provides asset management services or advice to a retirement system or (2) as directly authorized or requested by a retirement system (A) identifies particular investment options for consideration or approval; (B) chooses particular investment options; or (C) allocates particular amounts to be invested. If no company meets the criteria set forth in this paragraph, then "certifying company" shall mean the retirement system officer who, as designated by the board, executes the investment decisions made by the board, or, in the alternative, the company that the board authorizes to complete the certification as the agent of that officer.
    "Company" is any entity capable of affecting commerce, including but not limited to (i) a government, government agency, natural person, legal person, sole proprietorship, partnership, firm, corporation, subsidiary, affiliate, franchisor, franchisee, joint venture, trade association, financial institution, utility, public franchise, provider of financial services, trust, or enterprise; and (ii) any association thereof.
    "Department" means the Public Pension Division of the Department of Financial and Professional Regulation.
    "Forbidden entity" means any of the following:
        (1) The government of the Republic of the Sudan and
    
any of its agencies, including but not limited to political units and subdivisions;
        (2) Any company that is wholly or partially managed
    
or controlled by the government of the Republic of the Sudan and any of its agencies, including but not limited to political units and subdivisions;
        (3) Any company (i) that is established or organized
    
under the laws of the Republic of the Sudan or (ii) whose principal place of business is in the Republic of the Sudan;
        (4) Any company (i) identified by the Office of
    
Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities in the Republic of the Sudan; or (ii) fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to the Republic of the Sudan that occurred at any time following the effective date of this Act;
        (5) Any publicly traded company that is individually
    
identified by an independent researching firm that specializes in global security risk and that has been retained by a certifying company as provided in subsection (c) of this Section as being a company that owns or controls property or assets located in, has employees or facilities located in, provides goods or services to, obtains goods or services from, has distribution agreements with, issues credits or loans to, purchases bonds or commercial paper issued by, or invests in (A) the Republic of the Sudan; or (B) any company domiciled in the Republic of the Sudan; and
        (6) Any private market fund that fails to satisfy the
    
requirements set forth in subsections (d) and (e) of this Section.
    Notwithstanding the foregoing, the term "forbidden entity" shall exclude (A) mutual funds that meet the requirements of item (iii) of paragraph (13) of Section 1-113.2 and (B) companies that transact business in the Republic of the Sudan under the law, license, or permit of the United States, including a license from the United States Department of the Treasury, and companies, except agencies of the Republic of the Sudan, who are certified as Non-Government Organizations by the United Nations, or who engage solely in (i) the provision of goods and services intended to relieve human suffering or to promote welfare, health, religious and spiritual activities, and education or humanitarian purposes; or (ii) journalistic activities.
    "Private market fund" means any private equity fund, private equity fund of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
    "Republic of the Sudan" means those geographic areas of the Republic of Sudan that are subject to sanction or other restrictions placed on commercial activity imposed by the United States Government due to an executive or congressional declaration of genocide.
    "Retirement system" means the State Employees' Retirement System of Illinois, the Judges Retirement System of Illinois, the General Assembly Retirement System, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois.
    (c) A retirement system shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless, as provided in this Section, a certifying company certifies to the retirement system that, (1) with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk and (2) 100% of the retirement system's assets for which the certifying company provides services or advice are not and have not been invested or reinvested in any forbidden entity at any time after 4 months after the effective date of this Section.
    The certifying company shall make the certification required under this subsection (c) to a retirement system 6 months after the effective date of this Section and annually thereafter. A retirement system shall submit the certifications to the Department, and the Department shall notify the Secretary of Financial and Professional Regulation if a retirement system fails to do so.
    (d) With respect to a commitment or investment made pursuant to a written agreement executed prior to the effective date of this Section, each private market fund shall submit to the appropriate certifying company, at no additional cost to the retirement system:
        (1) an affidavit sworn under oath in which an
    
expressly authorized officer of the private market fund avers that the private market fund (A) does not own or control any property or asset located in the Republic of the Sudan and (B) does not conduct business operations in the Republic of the Sudan; or
        (2) a certificate in which an expressly authorized
    
officer of the private market fund certifies that the private market fund, based on reasonable due diligence, has determined that, other than direct or indirect investments in companies certified as Non-Government Organizations by the United Nations, the private market fund has no direct or indirect investment in any company (A) organized under the laws of the Republic of the Sudan; (B) whose principal place of business is in the Republic of the Sudan; or (C) that conducts business operations in the Republic of the Sudan. Such certificate shall be based upon the periodic reports received by the private market fund, and the private market fund shall agree that the certifying company, directly or through an agent, or the retirement system, as the case may be, may from time to time review the private market fund's certification process.
    (e) With respect to a commitment or investment made pursuant to a written agreement executed after the effective date of this Section, each private market fund shall, at no additional cost to the retirement system:
        (1) submit to the appropriate certifying company an
    
affidavit or certificate consistent with the requirements pursuant to subsection (d) of this Section; or
        (2) enter into an enforceable written agreement with
    
the retirement system that provides for remedies consistent with those set forth in subsection (g) of this Section if any of the assets of the retirement system shall be transferred, loaned, or otherwise invested in any company that directly or indirectly (A) has facilities or employees in the Republic of the Sudan or (B) conducts business operations in the Republic of the Sudan.
    (f) In addition to any other penalties and remedies available under the law of Illinois and the United States, any transaction, other than a transaction with a private market fund that is governed by subsections (g) and (h) of this Section, that violates the provisions of this Act shall be against public policy and voidable, at the sole discretion of the retirement system.
    (g) If a private market fund fails to provide the affidavit or certification required in subsections (d) and (e) of this Section, then the retirement system shall, within 90 days, divest, or attempt in good faith to divest, the retirement system's interest in the private market fund, provided that the Board of the retirement system confirms through resolution that the divestment does not have a material and adverse impact on the retirement system. The retirement system shall immediately notify the Department, and the Department shall notify all other retirement systems, as soon as practicable, by posting the name of the private market fund on the Department's Internet website or through e-mail communications. No other retirement system may enter into any agreement under which the retirement system directly or indirectly invests in the private market fund unless the private market fund provides that retirement system with the affidavit or certification required in subsections (d) and (e) of this Section and complies with all other provisions of this Section.
    (h) If a private market fund fails to fulfill its obligations under any agreement provided for in paragraph (2) of subsection (e) of this Section, the retirement system shall immediately take legal and other action to obtain satisfaction through all remedies and penalties available under the law and the agreement itself. The retirement system shall immediately notify the Department, and the Department shall notify all other retirement systems, as soon as practicable, by posting the name of the private market fund on the Department's Internet website or through e-mail communications, and no other retirement system may enter into any agreement under which the retirement system directly or indirectly invests in the private market fund.
    (i) This Section shall have full force and effect during any period in which the Republic of the Sudan, or the officials of the government of that Republic, are subject to sanctions authorized under any statute or executive order of the United States or until such time as the State Department of the United States confirms in the federal register or through other means that the Republic of the Sudan is no longer subject to sanctions by the government of the United States.
    (j) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Section that can be given effect without the invalid provision or application.
(Source: P.A. 95-521, eff. 8-28-07.)

40 ILCS 5/1-110.10

    (40 ILCS 5/1-110.10)
    Sec. 1-110.10. Servicer certification.
    (a) For the purposes of this Section:
    "Illinois finance entity" means any entity chartered under the Illinois Banking Act, the Savings Bank Act, the Illinois Credit Union Act, or the Illinois Savings and Loan Act of 1985 and any person or entity licensed under the Residential Mortgage License Act of 1987, the Consumer Installment Loan Act, or the Sales Finance Agency Act.
    "Retirement system or pension fund" means a retirement system or pension fund established under this Code.
    (b) In order for an Illinois finance entity to be eligible for investment or deposit of retirement system or pension fund assets, the Illinois finance entity must annually certify that it complies with the requirements of the High Risk Home Loan Act and the rules adopted pursuant to that Act that are applicable to that Illinois finance entity. For Illinois finance entities with whom the retirement system or pension fund is investing or depositing assets on the effective date of this Section, the initial certification required under this Section shall be completed within 6 months after the effective date of this Section. For Illinois finance entities with whom the retirement system or pension fund is not investing or depositing assets on the effective date of this Section, the initial certification required under this Section must be completed before the retirement system or pension fund may invest or deposit assets with the Illinois finance entity.
    (c) A retirement system or pension fund shall submit the certifications to the Public Pension Division of the Department of Financial and Professional Regulation, and the Division shall notify the Secretary of Financial and Professional Regulation if a retirement system or pension fund fails to do so.
    (d) If an Illinois finance entity fails to provide an initial certification within 6 months after the effective date of this Section or fails to submit an annual certification, then the retirement system or pension fund shall notify the Illinois finance entity. The Illinois finance entity shall, within 30 days after the date of notification, either (i) notify the retirement system or pension fund of its intention to certify and complete certification or (ii) notify the retirement system or pension fund of its intention to not complete certification. If an Illinois finance entity fails to provide certification, then the retirement system or pension fund shall, within 90 days, divest, or attempt in good faith to divest, the retirement system's or pension fund's assets with that Illinois finance entity. The retirement system or pension fund shall immediately notify the Department of the Illinois finance entity's failure to provide certification.
    (e) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Section that can be given effect without the invalid provision or application.
(Source: P.A. 95-521, eff. 8-28-07; 95-876, eff. 8-21-08.)

40 ILCS 5/1-110.15

    (40 ILCS 5/1-110.15)
    Sec. 1-110.15. Transactions prohibited by retirement systems; Iran.
    (a) As used in this Section:
    "Active business operations" means all business operations that are not inactive business operations.
    "Business operations" means engaging in commerce in any form in Iran, including, but not limited to, acquiring, developing, maintaining, owning, selling, possessing, leasing, or operating equipment, facilities, personnel, products, services, personal property, real property, or any other apparatus of business or commerce.
    "Company" means any sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of those entities or business associations, that exists for the purpose of making profit.
    "Direct holdings" in a company means all securities of that company that are held directly by the retirement system or in an account or fund in which the retirement system owns all shares or interests.
    "Inactive business operations" means the mere continued holding or renewal of rights to property previously operated for the purpose of generating revenues but not presently deployed for that purpose.
    "Indirect holdings" in a company means all securities of that company which are held in an account or fund, such as a mutual fund, managed by one or more persons not employed by the retirement system, in which the retirement system owns shares or interests together with other investors not subject to the provisions of this Section.
    "Mineral-extraction activities" include exploring, extracting, processing, transporting, or wholesale selling or trading of elemental minerals or associated metal alloys or oxides (ore), including gold, copper, chromium, chromite, diamonds, iron, iron ore, silver, tungsten, uranium, and zinc.
    "Oil-related activities" include, but are not limited to, owning rights to oil blocks; exporting, extracting, producing, refining, processing, exploring for, transporting, selling, or trading of oil; and constructing, maintaining, or operating a pipeline, refinery, or other oil-field infrastructure. The mere retail sale of gasoline and related consumer products is not considered an oil-related activity.
    "Petroleum resources" means petroleum, petroleum byproducts, or natural gas.
    "Private market fund" means any private equity fund, private equity fund of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
    "Retirement system" means the State Employees' Retirement System of Illinois, the Judges Retirement System of Illinois, the General Assembly Retirement System, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois.
    "Scrutinized business operations" means business operations that have caused a company to become a scrutinized company.
    "Scrutinized company" means the company has business operations that involve contracts with or provision of supplies or services to the Government of Iran, companies in which the Government of Iran has any direct or indirect equity share, consortiums or projects commissioned by the Government of Iran, or companies involved in consortiums or projects commissioned by the Government of Iran and:
        (1) more than 10% of the company's revenues produced
    
in or assets located in Iran involve oil-related activities or mineral-extraction activities; less than 75% of the company's revenues produced in or assets located in Iran involve contracts with or provision of oil-related or mineral-extraction products or services to the Government of Iran or a project or consortium created exclusively by that government; and the company has failed to take substantial action; or
        (2) the company has, on or after August 5, 1996, made
    
an investment of $20 million or more, or any combination of investments of at least $10 million each that in the aggregate equals or exceeds $20 million in any 12-month period, that directly or significantly contributes to the enhancement of Iran's ability to develop petroleum resources of Iran.
    "Substantial action" means adopting, publicizing, and implementing a formal plan to cease scrutinized business operations within one year and to refrain from any such new business operations.
    (b) Within 90 days after the effective date of this Section, a retirement system shall make its best efforts to identify all scrutinized companies in which the retirement system has direct or indirect holdings.
    These efforts shall include the following, as appropriate in the retirement system's judgment:
        (1) reviewing and relying on publicly available
    
information regarding companies having business operations in Iran, including information provided by nonprofit organizations, research firms, international organizations, and government entities;
        (2) contacting asset managers contracted by the
    
retirement system that invest in companies having business operations in Iran; and
        (3) Contacting other institutional investors that
    
have divested from or engaged with companies that have business operations in Iran.
    The retirement system may retain an independent research firm to identify scrutinized companies in which the retirement system has direct or indirect holdings. By the first meeting of the retirement system following the 90-day period described in this subsection (b), the retirement system shall assemble all scrutinized companies identified into a scrutinized companies list.
    The retirement system shall update the scrutinized companies list annually based on evolving information from, among other sources, those listed in this subsection (b).
    (c) The retirement system shall adhere to the following procedures for companies on the scrutinized companies list:
        (1) The retirement system shall determine the
    
companies on the scrutinized companies list in which the retirement system owns direct or indirect holdings.
        (2) For each company identified in item (1) of this
    
subsection (c) that has only inactive business operations, the retirement system shall send a written notice informing the company of this Section and encouraging it to continue to refrain from initiating active business operations in Iran until it is able to avoid scrutinized business operations. The retirement system shall continue such correspondence semiannually.
        (3) For each company newly identified in item (1) of
    
this subsection (c) that has active business operations, the retirement system shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the retirement system. The notice must inform the company of the opportunity to clarify its Iran-related activities and encourage the company, within 90 days, to cease its scrutinized business operations or convert such operations to inactive business operations in order to avoid qualifying for divestment by the retirement system.
        (4) If, within 90 days after the retirement system's
    
first engagement with a company pursuant to this subsection (c), that company ceases scrutinized business operations, the company shall be removed from the scrutinized companies list and the provisions of this Section shall cease to apply to it unless it resumes scrutinized business operations. If, within 90 days after the retirement system's first engagement, the company converts its scrutinized active business operations to inactive business operations, the company is subject to all provisions relating thereto.
    (d) If, after 90 days following the retirement system's first engagement with a company pursuant to subsection (c), the company continues to have scrutinized active business operations, and only while such company continues to have scrutinized active business operations, the retirement system shall sell, redeem, divest, or withdraw all publicly traded securities of the company, except as provided in paragraph (f), from the retirement system's assets under management within 12 months after the company's most recent appearance on the scrutinized companies list.
    If a company that ceased scrutinized active business operations following engagement pursuant to subsection (c) resumes such operations, this subsection (d) immediately applies, and the retirement system shall send a written notice to the company. The company shall also be immediately reintroduced onto the scrutinized companies list.
    (e) The retirement system may not acquire securities of companies on the scrutinized companies list that have active business operations, except as provided in subsection (f).
    (f) A company that the United States Government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Iran is not subject to divestment or the investment prohibition pursuant to subsections (d) and (e).
    (g) Notwithstanding the provisions of this Section, paragraphs (d) and (e) do not apply to indirect holdings in a private market fund. However, the retirement system shall submit letters to the managers of those investment funds containing companies that have scrutinized active business operations requesting that they consider removing the companies from the fund or create a similar actively managed fund having indirect holdings devoid of the companies. If the manager creates a similar fund, the retirement system shall replace all applicable investments with investments in the similar fund in an expedited timeframe consistent with prudent investing standards.
    (h) The retirement system shall file a report with the Public Pension Division of the Department of Financial and Professional Regulation that includes the scrutinized companies list within 30 days after the list is created. This report shall be made available to the public.
    The retirement system shall file an annual report with the Public Pension Division, which shall be made available to the public, that includes all of the following:
        (1) A summary of correspondence with companies
    
engaged by the retirement system under items (2) and (3) of subsection (c).
        (2) All investments sold, redeemed, divested, or
    
withdrawn in compliance with subsection (d).
        (3) All prohibited investments under subsection (e).
        (4) A summary of correspondence with private market
    
funds notified under subsection (g).
    (i) This Section expires upon the occurrence of any of the following:
        (1) The United States revokes all sanctions imposed
    
against the Government of Iran.
        (2) The Congress or President of the United States
    
declares that the Government of Iran has ceased to acquire weapons of mass destruction and to support international terrorism.
        (3) The Congress or President of the United States,
    
through legislation or executive order, declares that mandatory divestment of the type provided for in this Section interferes with the conduct of United States foreign policy.
    (j) With respect to actions taken in compliance with this Act, including all good-faith determinations regarding companies as required by this Act, the retirement system is exempt from any conflicting statutory or common law obligations, including any fiduciary duties under this Article and any obligations with respect to choice of asset managers, investment funds, or investments for the retirement system's securities portfolios.
    (k) Notwithstanding any other provision of this Section to the contrary, the retirement system may cease divesting from scrutinized companies pursuant to subsection (d) or reinvest in scrutinized companies from which it divested pursuant to subsection (d) if clear and convincing evidence shows that the value of investments in scrutinized companies with active scrutinized business operations becomes equal to or less than 0.5% of the market value of all assets under management by the retirement system. Cessation of divestment, reinvestment, or any subsequent ongoing investment authorized by this Section is limited to the minimum steps necessary to avoid the contingency set forth in this subsection (k). For any cessation of divestment, reinvestment, or subsequent ongoing investment authorized by this Section, the retirement system shall provide a written report to the Public Pension Division in advance of initial reinvestment, updated semiannually thereafter as applicable, setting forth the reasons and justification, supported by clear and convincing evidence, for its decisions to cease divestment, reinvest, or remain invested in companies having scrutinized active business operations. This Section does not apply to reinvestment in companies on the grounds that they have ceased to have scrutinized active business operations.
    (l) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to this end the provisions of this Section are severable.
(Source: P.A. 95-616, eff. 1-1-08; 95-876, eff. 8-21-08.)

40 ILCS 5/1-110.16

    (40 ILCS 5/1-110.16)
    Sec. 1-110.16. Transactions prohibited by retirement systems; companies that boycott Israel, Iran-restricted companies, and Sudan-restricted companies.
    (a) As used in this Section:
        "Boycott Israel" means engaging in actions that are
    
politically motivated and are intended to penalize, inflict economic harm on, or otherwise limit commercial relations with the State of Israel or companies based in the State of Israel or in territories controlled by the State of Israel.
        "Company" means any sole proprietorship,
    
organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of those entities or business associations, that exist for the purpose of making profit.
        "Illinois Investment Policy Board" means the board
    
established under subsection (b) of this Section.
        "Direct holdings" in a company means all publicly
    
traded securities of that company that are held directly by the retirement system in an actively managed account or fund in which the retirement system owns all shares or interests.
        "Indirect holdings" in a company means all securities
    
of that company that are held in an account or fund, such as a mutual fund, managed by one or more persons not employed by the retirement system, in which the retirement system owns shares or interests together with other investors not subject to the provisions of this Section or that are held in an index fund.
        "Iran-restricted company" means a company that meets
    
the qualifications under Section 1-110.15 of this Code.
        "Private market fund" means any private equity fund,
    
private equity funds of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
        "Restricted companies" means companies that boycott
    
Israel, Iran-restricted companies, and Sudan-restricted companies.
        "Retirement system" means a retirement system
    
established under Article 2, 14, 15, 16, or 18 of this Code or the Illinois State Board of Investment.
        "Sudan-restricted company" means a company that meets
    
the qualifications under Section 1-110.6 of this Code.
    (b) There shall be established an Illinois Investment Policy Board. The Illinois Investment Policy Board shall consist of 7 members. Each board of a pension fund or investment board created under Article 15, 16, or 22A of this Code shall appoint one member, and the Governor shall appoint 4 members.
    (c) Notwithstanding any provision of law to the contrary, beginning January 1, 2016, Sections 110.15 and 1-110.6 of this Code shall be administered in accordance with this Section.
    (d) By April 1, 2016, the Illinois Investment Policy Board shall make its best efforts to identify all Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel and assemble those identified companies into a list of restricted companies, to be distributed to each retirement system.
    These efforts shall include the following, as appropriate in the Illinois Investment Policy Board's judgment:
        (1) reviewing and relying on publicly available
    
information regarding Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel, including information provided by nonprofit organizations, research firms, and government entities;
        (2) contacting asset managers contracted by the
    
retirement systems that invest in Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel;
        (3) contacting other institutional investors that
    
have divested from or engaged with Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel; and
        (4) retaining an independent research firm to
    
identify Iran-restricted companies, Sudan-restricted companies, and companies that boycott Israel.
    The Illinois Investment Policy Board shall review the list of restricted companies on a quarterly basis based on evolving information from, among other sources, those listed in this subsection (d) and distribute any updates to the list of restricted companies to the retirement systems.
    (e) The Illinois Investment Policy Board shall adhere to the following procedures for companies on the list of restricted companies:
        (1) For each company newly identified in subsection
    
(d), the Illinois Investment Policy Board shall send a written notice informing the company of its status and that it may become subject to divestment by the retirement systems.
        (2) If, following the Illinois Investment Policy
    
Board's engagement pursuant to this subsection (e) with a restricted company, that company ceases activity that designates the company to be an Iran-restricted company, a Sudan-restricted company, or a company that boycotts Israel, the company shall be removed from the list of restricted companies and the provisions of this Section shall cease to apply to it unless it resumes such activities.
    (f) The retirement system shall adhere to the following procedures for companies on the list of restricted companies:
        (1) The retirement system shall identify those
    
companies on the list of restricted companies in which the retirement system owns direct holdings and indirect holdings.
        (2) The retirement system shall instruct its
    
investment advisors to sell, redeem, divest, or withdraw all direct holdings of restricted companies from the retirement system's assets under management in an orderly and fiduciarily responsible manner within 12 months after the company's most recent appearance on the list of restricted companies.
        (3) The retirement system may not acquire securities
    
of restricted companies.
        (4) The provisions of this subsection (f) do not
    
apply to the retirement system's indirect holdings or private market funds. The Illinois Investment Policy Board shall submit letters to the managers of those investment funds containing restricted companies requesting that they consider removing the companies from the fund or create a similar actively managed fund having indirect holdings devoid of the companies. If the manager creates a similar fund, the retirement system shall replace all applicable investments with investments in the similar fund in an expedited timeframe consistent with prudent investing standards.
    (g) Upon request, and at least annually, each retirement system shall provide the Illinois Investment Policy Board with information regarding investments sold, redeemed, divested, or withdrawn in compliance with this Section.
    (h) Notwithstanding any provision of this Section to the contrary, a retirement system may cease divesting from companies pursuant to subsection (f) if clear and convincing evidence shows that the value of investments in such companies becomes equal to or less than 0.5% of the market value of all assets under management by the retirement system. For any cessation of divestment authorized by this subsection (h), the retirement system shall provide a written notice to the Illinois Investment Policy Board in advance of the cessation of divestment, setting forth the reasons and justification, supported by clear and convincing evidence, for its decision to cease divestment under subsection (f).
    (i) The cost associated with the activities of the Illinois Investment Policy Board shall be borne by the boards of each pension fund or investment board created under Article 15, 16, or 22A of this Code.
    (j) With respect to actions taken in compliance with this Section, including all good-faith determinations regarding companies as required by this Section, the retirement system and Illinois Investment Policy Board are exempt from any conflicting statutory or common law obligations, including any fiduciary duties under this Article and any obligations with respect to choice of asset managers, investment funds, or investments for the retirement system's securities portfolios.
    (k) It is not the intent of the General Assembly in enacting this amendatory Act of the 99th General Assembly to cause divestiture from any company based in the United States of America. The Illinois Investment Policy Board shall consider this intent when developing or reviewing the list of restricted companies.
    (l) If any provision of this amendatory Act of the 99th General Assembly or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this amendatory Act of the 99th General Assembly that can be given effect without the invalid provision or application.
(Source: P.A. 99-128, eff. 7-23-15.)

40 ILCS 5/1-111

    (40 ILCS 5/1-111) (from Ch. 108 1/2, par. 1-111)
    Sec. 1-111. Ten Per Cent Limitation of Employer Securities. A plan may not acquire a security issued by an employer of employees covered by the retirement system or pension fund, if immediately after such acquisition, the aggregate fair market value of such employer securities held by the retirement system or pension fund exceed 10 per cent of the fair market value of the assets of the retirement system or pension fund.
(Source: P.A. 81-948.)

40 ILCS 5/1-113

    (40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113)
    Sec. 1-113. Investment authority of certain pension funds, not including those established under Article 3 or 4. The investment authority of a board of trustees of a retirement system or pension fund established under this Code shall, if so provided in the Article establishing such retirement system or pension fund, embrace the following investments:
        (1) Bonds, notes and other direct obligations of the
    
United States Government; bonds, notes and other obligations of any United States Government agency or instrumentality, whether or not guaranteed; and obligations the principal and interest of which are guaranteed unconditionally by the United States Government or by an agency or instrumentality thereof.
        (2) Obligations of the Inter-American Development
    
Bank, the International Bank for Reconstruction and Development, the African Development Bank, the International Finance Corporation, and the Asian Development Bank.
        (3) Obligations of any state, or of any political
    
subdivision in Illinois, or of any county or city in any other state having a population as shown by the last federal census of not less than 30,000 inhabitants provided that such political subdivision is not permitted by law to become indebted in excess of 10% of the assessed valuation of property therein and has not defaulted for a period longer than 30 days in the payment of interest and principal on any of its general obligations or indebtedness during a period of 10 calendar years immediately preceding such investment.
        (4) Nonconvertible bonds, debentures, notes and other
    
corporate obligations of any corporation created or existing under the laws of the United States or any state, district or territory thereof, provided there has been no default on the obligations of the corporation or its predecessor(s) during the 5 calendar years immediately preceding the purchase. Up to 5% of the assets of a pension fund established under Article 9 of this Code may be invested in nonconvertible bonds, debentures, notes, and other corporate obligations of corporations created or existing under the laws of a foreign country, provided there has been no default on the obligations of the corporation or its predecessors during the 5 calendar years immediately preceding the date of purchase.
        (5) Obligations guaranteed by the Government of
    
Canada, or by any Province of Canada, or by any Canadian city with a population of not less than 150,000 inhabitants, provided (a) they are payable in United States currency and are exempt from any Canadian withholding tax; (b) the investment in any one issue of bonds shall not exceed 10% of the amount outstanding; and (c) the total investments at book value in Canadian securities shall be limited to 5% of the total investment account of the board at book value.
        (5.1) Direct obligations of the State of Israel for
    
the payment of money, or obligations for the payment of money which are guaranteed as to the payment of principal and interest by the State of Israel, or common or preferred stock or notes issued by a bank owned or controlled in whole or in part by the State of Israel, on the following conditions:
            (a) The total investments in such obligations
        
shall not exceed 5% of the book value of the aggregate investments owned by the board;
            (b) The State of Israel shall not be in default
        
in the payment of principal or interest on any of its direct general obligations on the date of such investment;
            (c) The bonds, stock or notes, and interest
        
thereon shall be payable in currency of the United States;
            (d) The bonds shall (1) contain an option for the
        
redemption thereof after 90 days from date of purchase or (2) either become due 5 years from the date of their purchase or be subject to redemption 120 days after the date of notice for redemption;
            (e) The investment in these obligations has been
        
approved in writing by investment counsel employed by the board, which counsel shall be a national or state bank or trust company authorized to do a trust business in the State of Illinois, or an investment advisor qualified under the federal Investment Advisers Act of 1940 and registered under the Illinois Securities Law of 1953;
            (f) The fund or system making the investment
        
shall have at least $5,000,000 of net present assets.
        (6) Notes secured by mortgages under Sections 203,
    
207, 220 and 221 of the National Housing Act which are insured by the Federal Housing Commissioner, or his successor assigns, or debentures issued by such Commissioner, which are guaranteed as to principal and interest by the Federal Housing Administration, or agency of the United States Government, provided the aggregate investment shall not exceed 20% of the total investment account of the board at book value, and provided further that the investment in such notes under Sections 220 and 221 shall in no event exceed one-half of the maximum investment in notes under this paragraph.
        (7) Loans to veterans guaranteed in whole or part by
    
the United States Government pursuant to Title III of the Act of Congress known as the Servicemen's Readjustment Act of 1944, 58 Stat. 284, 38 U.S.C. 693, as amended or supplemented from time to time, provided such guaranteed loans are liens upon real estate.
        (8) Common and preferred stocks and convertible debt
    
securities authorized for investment of trust funds under the laws of the State of Illinois, provided:
            (a) the common stocks, except as provided in
        
subparagraph (g), are listed on a national securities exchange or board of trade, as defined in the federal Securities Exchange Act of 1934, or quoted in the National Association of Securities Dealers Automated Quotation System (NASDAQ);
            (b) the securities are of a corporation created
        
or existing under the laws of the United States or any state, district or territory thereof, except that up to 5% of the assets of a pension fund established under Article 9 of this Code may be invested in securities issued by corporations created or existing under the laws of a foreign country, if those securities are otherwise in conformance with this paragraph (8);
            (c) the corporation is not in arrears on payment
        
of dividends on its preferred stock;
            (d) the total book value of all stocks and
        
convertible debt owned by any pension fund or retirement system shall not exceed 40% of the aggregate book value of all investments of such pension fund or retirement system, except for a pension fund or retirement system governed by Article 9 or 17, where the total of all stocks and convertible debt shall not exceed 50% of the aggregate book value of all fund investments, and except for a pension fund or retirement system governed by Article 13, where the total market value of all stocks and convertible debt shall not exceed 65% of the aggregate market value of all fund investments;
            (e) the book value of stock and convertible debt
        
investments in any one corporation shall not exceed 5% of the total investment account at book value in which such securities are held, determined as of the date of the investment, and the investments in the stock of any one corporation shall not exceed 5% of the total outstanding stock of such corporation, and the investments in the convertible debt of any one corporation shall not exceed 5% of the total amount of such debt that may be outstanding;
            (f) the straight preferred stocks or convertible
        
preferred stocks and convertible debt securities are issued or guaranteed by a corporation whose common stock qualifies for investment by the board; and
            (g) that any common stocks not listed or quoted
        
as provided in subdivision (8)(a) be limited to the following types of institutions: (a) any bank which is a member of the Federal Deposit Insurance Corporation having capital funds represented by capital stock, surplus and undivided profits of at least $20,000,000; (b) any life insurance company having capital funds represented by capital stock, special surplus funds and unassigned surplus totalling at least $50,000,000; and (c) any fire or casualty insurance company, or a combination thereof, having capital funds represented by capital stock, net surplus and voluntary reserves of at least $50,000,000.
        (9) Withdrawable accounts of State chartered and
    
federal chartered savings and loan associations insured by the Federal Savings and Loan Insurance Corporation; deposits or certificates of deposit in State and national banks insured by the Federal Deposit Insurance Corporation; and share accounts or share certificate accounts in a State or federal credit union, the accounts of which are insured as required by the Illinois Credit Union Act or the Federal Credit Union Act, as applicable.
        No bank or savings and loan association shall receive
    
investment funds as permitted by this subsection (9), unless it has complied with the requirements established pursuant to Section 6 of the Public Funds Investment Act.
        (10) Trading, purchase or sale of listed options on
    
underlying securities owned by the board.
        (11) Contracts and agreements supplemental thereto
    
providing for investments in the general account of a life insurance company authorized to do business in Illinois.
        (12) Conventional mortgage pass-through securities
    
which are evidenced by interests in Illinois owner-occupied residential mortgages, having not less than an "A" rating from at least one national securities rating service. Such mortgages may have loan-to-value ratios up to 95%, provided that any amount over 80% is insured by private mortgage insurance. The pool of such mortgages shall be insured by mortgage guaranty or equivalent insurance, in accordance with industry standards.
        (13) Pooled or commingled funds managed by a national
    
or State bank which is authorized to do a trust business in the State of Illinois, shares of registered investment companies as defined in the federal Investment Company Act of 1940 which are registered under that Act, and separate accounts of a life insurance company authorized to do business in Illinois, where such pooled or commingled funds, shares, or separate accounts are comprised of common or preferred stocks, bonds, or money market instruments.
        (14) Pooled or commingled funds managed by a national
    
or state bank which is authorized to do a trust business in the State of Illinois, separate accounts managed by a life insurance company authorized to do business in Illinois, and commingled group trusts managed by an investment adviser registered under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) and under the Illinois Securities Law of 1953, where such pooled or commingled funds, separate accounts or commingled group trusts are comprised of real estate or loans upon real estate secured by first or second mortgages. The total investment in such pooled or commingled funds, commingled group trusts and separate accounts shall not exceed 10% of the aggregate book value of all investments owned by the fund.
        (15) Investment companies which (a) are registered as
    
such under the Investment Company Act of 1940, (b) are diversified, open-end management investment companies and (c) invest only in money market instruments.
        (16) Up to 10% of the assets of the fund may be
    
invested in investments not included in paragraphs (1) through (15) of this Section, provided that such investments comply with the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, and 1-111 of this Code.
    The board shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction.
    Any limitations herein set forth shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time.
    All investments shall be clearly held and accounted for to indicate ownership by such board. Such board may direct the registration of securities in its own name or in the name of a nominee created for the express purpose of registration of securities by a national or state bank or trust company authorized to conduct a trust business in the State of Illinois.
    Investments shall be carried at cost or at a value determined in accordance with generally accepted accounting principles and accounting procedures approved by such board.
(Source: P.A. 100-201, eff. 8-18-17.)

40 ILCS 5/1-113.1

    (40 ILCS 5/1-113.1)
    Sec. 1-113.1. Investment authority of pension funds established under Article 3 or 4. The board of trustees of a police pension fund established under Article 3 of this Code or firefighter pension fund established under Article 4 of this Code shall draw pension funds from the treasurer of the municipality and, beginning January 1, 1998, invest any part thereof in the name of the board in the items listed in Sections 1-113.2 through 1-113.4 according to the limitations and requirements of this Article. These investments shall be made with the care, skill, prudence, and diligence that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character with like aims.
    Interest and any other income from the investments shall be credited to the pension fund.
    For the purposes of Sections 1-113.2 through 1-113.11, the "net assets" of a pension fund include both the cash and invested assets of the pension fund.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.2

    (40 ILCS 5/1-113.2)
    Sec. 1-113.2. List of permitted investments for all Article 3 or 4 pension funds. Any pension fund established under Article 3 or 4 may invest in the following items:
    (1) Interest bearing direct obligations of the United States of America.
    (2) Interest bearing obligations to the extent that they are fully guaranteed or insured as to payment of principal and interest by the United States of America.
    (3) Interest bearing bonds, notes, debentures, or other similar obligations of agencies of the United States of America. For the purposes of this Section, "agencies of the United States of America" includes: (i) the Federal National Mortgage Association and the Student Loan Marketing Association; (ii) federal land banks, federal intermediate credit banks, federal farm credit banks, and any other entity authorized to issue direct debt obligations of the United States of America under the Farm Credit Act of 1971 or amendments to that Act; (iii) federal home loan banks and the Federal Home Loan Mortgage Corporation; and (iv) any agency created by Act of Congress that is authorized to issue direct debt obligations of the United States of America.
    (4) Interest bearing savings accounts or certificates of deposit, issued by federally chartered banks or savings and loan associations, to the extent that the deposits are insured by agencies or instrumentalities of the federal government.
    (5) Interest bearing savings accounts or certificates of deposit, issued by State of Illinois chartered banks or savings and loan associations, to the extent that the deposits are insured by agencies or instrumentalities of the federal government.
    (6) Investments in credit unions, to the extent that the investments are insured by agencies or instrumentalities of the federal government.
    (7) Interest bearing bonds of the State of Illinois.
    (8) Pooled interest bearing accounts managed by the Illinois Public Treasurer's Investment Pool in accordance with the Deposit of State Moneys Act, interest bearing funds or pooled accounts of the Illinois Metropolitan Investment Funds, and interest bearing funds or pooled accounts managed, operated, and administered by banks, subsidiaries of banks, or subsidiaries of bank holding companies in accordance with the laws of the State of Illinois.
    (9) Interest bearing bonds or tax anticipation warrants of any county, township, or municipal corporation of the State of Illinois.
    (10) Direct obligations of the State of Israel, subject to the conditions and limitations of item (5.1) of Section 1-113.
    (11) Money market mutual funds managed by investment companies that are registered under the federal Investment Company Act of 1940 and the Illinois Securities Law of 1953 and are diversified, open-ended management investment companies; provided that the portfolio of the money market mutual fund is limited to the following:
        (i) bonds, notes, certificates of indebtedness,
    
treasury bills, or other securities that are guaranteed by the full faith and credit of the United States of America as to principal and interest;
        (ii) bonds, notes, debentures, or other similar
    
obligations of the United States of America or its agencies; and
        (iii) short term obligations of corporations
    
organized in the United States with assets exceeding $400,000,000, provided that (A) the obligations mature no later than 180 days from the date of purchase, (B) at the time of purchase, the obligations are rated by at least 2 standard national rating services at one of their 3 highest classifications, and (C) the obligations held by the mutual fund do not exceed 10% of the corporation's outstanding obligations.
    (12) General accounts of life insurance companies authorized to transact business in Illinois.
    (13) Any combination of the following, not to exceed 10% of the pension fund's net assets:
        (i) separate accounts that are managed by life
    
insurance companies authorized to transact business in Illinois and are comprised of diversified portfolios consisting of common or preferred stocks, bonds, or money market instruments;
        (ii) separate accounts that are managed by insurance
    
companies authorized to transact business in Illinois, and are comprised of real estate or loans upon real estate secured by first or second mortgages; and
        (iii) mutual funds that meet the following
    
requirements:
            (A) the mutual fund is managed by an investment
        
company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953;
            (B) the mutual fund has been in operation for at
        
least 5 years;
            (C) the mutual fund has total net assets of $250
        
million or more; and
            (D) the mutual fund is comprised of diversified
        
portfolios of common or preferred stocks, bonds, or money market instruments.
    (14) Corporate bonds managed through an investment advisor must meet all of the following requirements:
        (1) The bonds must be rated as investment grade by
    
one of the 2 largest rating services at the time of purchase.
        (2) If subsequently downgraded below investment
    
grade, the bonds must be liquidated from the portfolio within 90 days after being downgraded by the manager.
(Source: P.A. 96-1495, eff. 1-1-11.)

40 ILCS 5/1-113.3

    (40 ILCS 5/1-113.3)
    Sec. 1-113.3. List of additional permitted investments for pension funds with net assets of $2,500,000 or more.
    (a) In addition to the items in Section 3-113.2, a pension fund established under Article 3 or 4 that has net assets of at least $2,500,000 may invest a portion of its net assets in the following items:
        (1) Separate accounts that are managed by life
    
insurance companies authorized to transact business in Illinois and are comprised of diversified portfolios consisting of common or preferred stocks, bonds, or money market instruments.
        (2) Mutual funds that meet the following requirements:
            (i) the mutual fund is managed by an investment
        
company as defined and registered under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953;
            (ii) the mutual fund has been in operation for at
        
least 5 years;
            (iii) the mutual fund has total net assets of
        
$250 million or more; and
            (iv) the mutual fund is comprised of diversified
        
portfolios of common or preferred stocks, bonds, or money market instruments.
    (b) A pension fund's total investment in the items authorized under this Section shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Illinois Department of Insurance.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.4

    (40 ILCS 5/1-113.4)
    Sec. 1-113.4. List of additional permitted investments for pension funds with net assets of $5,000,000 or more.
    (a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $5,000,000 and has appointed an investment adviser under Section 1-113.5 may, through that investment adviser, invest a portion of its assets in common and preferred stocks authorized for investments of trust funds under the laws of the State of Illinois. The stocks must meet all of the following requirements:
        (1) The common stocks are listed on a national
    
securities exchange or board of trade (as defined in the federal Securities Exchange Act of 1934 and set forth in subdivision G of Section 3 of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System (NASDAQ NMS).
        (2) The securities are of a corporation created or
    
existing under the laws of the United States or any state, district, or territory thereof and the corporation has been in existence for at least 5 years.
        (3) The corporation has not been in arrears on
    
payment of dividends on its preferred stock during the preceding 5 years.
        (4) The market value of stock in any one corporation
    
does not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation do not exceed 5% of the total outstanding stock of that corporation.
        (5) The straight preferred stocks or convertible
    
preferred stocks are issued or guaranteed by a corporation whose common stock qualifies for investment by the board.
        (6) The issuer of the stocks has been subject to the
    
requirements of Section 12 of the federal Securities Exchange Act of 1934 and has been current with the filing requirements of Sections 13 and 14 of that Act during the preceding 3 years.
    (b) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 35% of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Illinois Department of Insurance.
    (c) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the times and in the format required by the Division.
(Source: P.A. 100-201, eff. 8-18-17.)

40 ILCS 5/1-113.4a

    (40 ILCS 5/1-113.4a)
    Sec. 1-113.4a. List of additional permitted investments for Article 3 and 4 pension funds with net assets of $10,000,000 or more.
    (a) In addition to the items in Sections 1-113.2 and 1-113.3, a pension fund established under Article 3 or 4 that has net assets of at least $10,000,000 and has appointed an investment adviser, as defined under Sections 1-101.4 and 1-113.5, may, through that investment adviser, invest an additional portion of its assets in common and preferred stocks and mutual funds.
    (b) The stocks must meet all of the following requirements:
        (1) The common stocks must be listed on a national
    
securities exchange or board of trade (as defined in the Federal Securities Exchange Act of 1934 and set forth in paragraph G of Section 3 of the Illinois Securities Law of 1953) or quoted in the National Association of Securities Dealers Automated Quotation System National Market System.
        (2) The securities must be of a corporation in
    
existence for at least 5 years.
        (3) The market value of stock in any one corporation
    
may not exceed 5% of the cash and invested assets of the pension fund, and the investments in the stock of any one corporation may not exceed 5% of the total outstanding stock of that corporation.
        (4) The straight preferred stocks or convertible
    
preferred stocks must be issued or guaranteed by a corporation whose common stock qualifies for investment by the board.
    (c) The mutual funds must meet the following requirements:
        (1) The mutual fund must be managed by an investment
    
company registered under the Federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953.
        (2) The mutual fund must have been in operation for
    
at least 5 years.
        (3) The mutual fund must have total net assets of
    
$250,000,000 or more.
        (4) The mutual fund must be comprised of a
    
diversified portfolio of common or preferred stocks, bonds, or money market instruments.
    (d) A pension fund's total investment in the items authorized under this Section and Section 1-113.3 shall not exceed 50% effective July 1, 2011 and 55% effective July 1, 2012 of the market value of the pension fund's net present assets stated in its most recent annual report on file with the Department of Insurance.
    (e) A pension fund that invests funds under this Section shall electronically file with the Division any reports of its investment activities that the Division may require, at the time and in the format required by the Division.
(Source: P.A. 96-1495, eff. 1-1-11.)

40 ILCS 5/1-113.5

    (40 ILCS 5/1-113.5)
    Sec. 1-113.5. Investment advisers and investment services for all Article 3 or 4 pension funds.
    (a) The board of trustees of a pension fund may appoint investment advisers as defined in Section 1-101.4. The board of any pension fund investing in common or preferred stock under Section 1-113.4 shall appoint an investment adviser before making such investments.
    The investment adviser shall be a fiduciary, as defined in Section 1-101.2, with respect to the pension fund and shall be one of the following:
        (1) an investment adviser registered under the
    
federal Investment Advisers Act of 1940 and the Illinois Securities Law of 1953;
        (2) a bank or trust company authorized to conduct a
    
trust business in Illinois;
        (3) a life insurance company authorized to transact
    
business in Illinois; or
        (4) an investment company as defined and registered
    
under the federal Investment Company Act of 1940 and registered under the Illinois Securities Law of 1953.
    (a-5) Notwithstanding any other provision of law, a person or entity that provides consulting services (referred to as a "consultant" in this Section) to a pension fund with respect to the selection of fiduciaries may not be awarded a contract to provide those consulting services that is more than 5 years in duration. No contract to provide such consulting services may be renewed or extended. At the end of the term of a contract, however, the contractor is eligible to compete for a new contract. No person shall attempt to avoid or contravene the restrictions of this subsection by any means. All offers from responsive offerors shall be accompanied by disclosure of the names and addresses of the following:
        (1) The offeror.
        (2) Any entity that is a parent of, or owns a
    
controlling interest in, the offeror.
        (3) Any entity that is a subsidiary of, or in which a
    
controlling interest is owned by, the offeror.
    Beginning on July 1, 2008, a person, other than a trustee or an employee of a pension fund or retirement system, may not act as a consultant under this Section unless that person is at least one of the following: (i) registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.
    (b) All investment advice and services provided by an investment adviser or a consultant appointed under this Section shall be rendered pursuant to a written contract between the investment adviser and the board, and in accordance with the board's investment policy.
    The contract shall include all of the following:
        (1) acknowledgement in writing by the investment
    
adviser that he or she is a fiduciary with respect to the pension fund;
        (2) the board's investment policy;
        (3) full disclosure of direct and indirect fees,
    
commissions, penalties, and any other compensation that may be received by the investment adviser, including reimbursement for expenses; and
        (4) a requirement that the investment adviser submit
    
periodic written reports, on at least a quarterly basis, for the board's review at its regularly scheduled meetings. All returns on investment shall be reported as net returns after payment of all fees, commissions, and any other compensation.
    (b-5) Each contract described in subsection (b) shall also include (i) full disclosure of direct and indirect fees, commissions, penalties, and other compensation, including reimbursement for expenses, that may be paid by or on behalf of the investment adviser or consultant in connection with the provision of services to the pension fund and (ii) a requirement that the investment adviser or consultant update the disclosure promptly after a modification of those payments or an additional payment.
    Within 30 days after the effective date of this amendatory Act of the 95th General Assembly, each investment adviser and consultant providing services on the effective date or subject to an existing contract for the provision of services must disclose to the board of trustees all direct and indirect fees, commissions, penalties, and other compensation paid by or on behalf of the investment adviser or consultant in connection with the provision of those services and shall update that disclosure promptly after a modification of those payments or an additional payment.
    A person required to make a disclosure under subsection (d) is also required to disclose direct and indirect fees, commissions, penalties, or other compensation that shall or may be paid by or on behalf of the person in connection with the rendering of those services. The person shall update the disclosure promptly after a modification of those payments or an additional payment.
    The disclosures required by this subsection shall be in writing and shall include the date and amount of each payment and the name and address of each recipient of a payment.
    (c) Within 30 days after appointing an investment adviser or consultant, the board shall submit a copy of the contract to the Division of Insurance of the Department of Financial and Professional Regulation.
    (d) Investment services provided by a person other than an investment adviser appointed under this Section, including but not limited to services provided by the kinds of persons listed in items (1) through (4) of subsection (a), shall be rendered only after full written disclosure of direct and indirect fees, commissions, penalties, and any other compensation that shall or may be received by the person rendering those services.
    (e) The board of trustees of each pension fund shall retain records of investment transactions in accordance with the rules of the Department of Financial and Professional Regulation.
(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)

40 ILCS 5/1-113.6

    (40 ILCS 5/1-113.6)
    Sec. 1-113.6. Investment policies. Every board of trustees of a pension fund shall adopt a written investment policy and file a copy of that policy with the Department of Insurance within 30 days after its adoption. Whenever a board changes its investment policy, it shall file a copy of the new policy with the Department within 30 days.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.7

    (40 ILCS 5/1-113.7)
    Sec. 1-113.7. Registration of investments; custody and safekeeping. The board of trustees may register the investments of its pension fund in the name of the pension fund, in the nominee name of a bank or trust company authorized to conduct a trust business in Illinois, or in the nominee name of the Illinois Public Treasurer's Investment Pool.
    The assets of the pension fund and ownership of its investments shall be protected through third-party custodial safekeeping. The board of trustees may appoint as custodian of the investments of its pension fund the treasurer of the municipality, a bank or trust company authorized to conduct a trust business in Illinois, or the Illinois Public Treasurer's Investment Pool.
    A dealer may not maintain possession of or control over securities of a pension fund subject to the provisions of this Section unless it is registered as a broker-dealer with the U.S. Securities and Exchange Commission and is a member in good standing of the National Association of Securities Dealers, and (1) with respect to securities that are not issued only in book-entry form, (A) all such securities of each fund are either held in safekeeping in a place reasonably free from risk of destruction or held in custody by a securities depository that is a "clearing agency" registered with the U.S. Securities and Exchange Commission, (B) the dealer is a member of the Securities Investor Protection Corporation, (C) the dealer sends to each fund, no less frequently than each calendar quarter, an itemized statement showing the moneys and securities in the custody or possession of the dealer at the end of such period, and (D) an independent certified public accountant conducts an audit, no less frequently than each calendar year, that reviews the dealer's internal accounting controls and procedures for safeguarding securities; and (2) with respect to securities that are issued only in book-entry form, (A) all such securities of each fund are held either in a securities depository that is a "clearing agency" registered with the U.S. Securities and Exchange Commission or in a bank that is a member of the Federal Reserve System, (B) the dealer records the ownership interest of the funds in such securities on the dealer's books and records, (C) the dealer is a member of the Securities Investor Protection Corporation, (D) the dealer sends to each fund, no less frequently than each calendar quarter, an itemized statement showing the moneys and securities in the custody or possession of the dealer at the end of such period, and (E) the dealer's financial statement (which shall contain among other things a statement of the dealer's net capital and its required net capital computed in accordance with Rule 15c3-1 under the Securities Exchange Act of 1934) is audited annually by an independent certified public accountant, and the dealer's most recent audited financial statement is furnished to the fund. No broker-dealer serving as a custodian for any public pension fund as provided by this Act shall be authorized to serve as an investment advisor for that same public pension fund as described in Section 1-101.4 of this Code, to the extent that the investment advisor acquires or disposes of any asset of that same public pension fund. Notwithstanding the foregoing, in no event may a broker or dealer that is a natural person maintain possession of or control over securities or other assets of a pension fund subject to the provisions of this Section. In maintaining securities of a pension fund subject to the provisions of this Section, each dealer must maintain those securities in conformity with the provisions of Rule 15c3-3(b) of the Securities Exchange Act of 1934 (Physical Possession or Control of Securities). The Director of the Department of Insurance may adopt such rules and regulations as shall be necessary and appropriate in his or her judgment to effectuate the purposes of this Section.
    A bank or trust company authorized to conduct a trust business in Illinois shall register, deposit, or hold investments for safekeeping, all in accordance with the obligations and subject to the limitations of the Securities in Fiduciary Accounts Act.
(Source: P.A. 92-651, eff. 7-11-02.)

40 ILCS 5/1-113.8

    (40 ILCS 5/1-113.8)
    Sec. 1-113.8. Limitations on banks and savings and loan associations. A bank or savings and loan association shall not receive investment funds from a pension fund established under Article 3 or 4 of this Code, unless it has complied with the requirements established under Section 6 of the Public Funds Investment Act. The limitations set forth in that Section 6 are applicable only at the time of investment and do not require the liquidation of any investment at any time.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.9

    (40 ILCS 5/1-113.9)
    Sec. 1-113.9. Illegal investments. A person registered as a dealer, salesperson, or investment adviser under the Illinois Securities Law of 1953 who sells a pension fund a security, or engages in a transaction with a pension fund, that is not authorized by this Code, shall be subject to the penalty provisions of Subsection E of Section 8 of the Illinois Securities Law of 1953, if (1) the dealer, salesperson, or investment adviser has discretionary authority or control over the fund's assets and has acknowledged in writing that it is acting in a fiduciary capacity for the fund, (2) the fund has requested the investment advice of the dealer, salesperson, or investment adviser and has provided the dealer, salesperson, or investment adviser with its investment policy, and the dealer, salesperson, or investment adviser acknowledges in writing that the fund is relying primarily on the investment advice of that dealer, salesperson, or investment adviser, or (3) the dealer, salesperson, or investment adviser knows or has reason to know that the fund is not capable of independently evaluating investment risk or exercising independent judgment with respect to a particular securities transaction, and nonetheless recommends that the fund engage in that transaction.
    A bank or trust company authorized to conduct a trust business in Illinois or a broker-dealer, and any officer, director, or employee thereof, that advises or causes a pension fund to make an investment or engages in a transaction not authorized by this Code is subject to the penalty provisions of Article V of the Corporate Fiduciary Act.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.10

    (40 ILCS 5/1-113.10)
    Sec. 1-113.10. Legality at time of investment. The investment limitations set forth in this Article are applicable only at the time of investment and do not require the liquidation of any investment at any time. However, no additional pension funds may be invested in any investment item while the market value of the pension fund's investments in that item meets or exceeds the applicable limitation.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.11

    (40 ILCS 5/1-113.11)
    Sec. 1-113.11. Rules. The Department of Insurance is authorized to promulgate rules that are necessary or useful for the administration and enforcement of Sections 1-113.1 through 1-113.10 of this Article.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.12

    (40 ILCS 5/1-113.12)
    Sec. 1-113.12. Application. Sections 1-113.1 through 1-113.10 apply only to pension funds established under Article 3 or 4 of this Code.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1-113.14

    (40 ILCS 5/1-113.14)
    Sec. 1-113.14. Investment services for retirement systems, pension funds, and investment boards, except those funds established under Articles 3 and 4.
    (a) For the purposes of this Section, "investment services" means services provided by an investment adviser or a consultant other than qualified fund-of-fund management services as defined in Section 1-113.15.
    (b) The selection and appointment of an investment adviser or consultant for investment services by the board of a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2, shall be made and awarded in accordance with this Section. All contracts for investment services shall be awarded by the board using a competitive process that is substantially similar to the process required for the procurement of professional and artistic services under Article 35 of the Illinois Procurement Code. Each board of trustees shall adopt a policy in accordance with this subsection (b) within 60 days after the effective date of this amendatory Act of the 96th General Assembly. The policy shall be posted on its web site and filed with the Illinois Procurement Policy Board. Exceptions to this Section are allowed for (i) sole source procurements, (ii) emergency procurements, (iii) at the discretion of the pension fund, retirement system, or board of investment, contracts that are nonrenewable and one year or less in duration, so long as the contract has a value of less than $20,000, and (iv) in the discretion of the pension fund, retirement system, or investment board, contracts for follow-on funds with the same fund sponsor through closed-end funds. All exceptions granted under this Section must be published on the system's, fund's, or board's web site, shall name the person authorizing the procurement, and shall include a brief explanation of the reason for the exception.
    A person, other than a trustee or an employee of a retirement system, pension fund, or investment board, may not act as a consultant or investment adviser under this Section unless that person is registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.) or a bank, as defined in the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.).
    (c) Investment services provided by an investment adviser or a consultant appointed under this Section shall be rendered pursuant to a written contract between the investment adviser or consultant and the board.
    The contract shall include all of the following:
        (1) Acknowledgement in writing by the investment
    
adviser or consultant that he or she is a fiduciary with respect to the pension fund or retirement system.
        (2) The description of the board's investment policy
    
and notice that the policy is subject to change.
        (3) (i) Full disclosure of direct and indirect fees,
    
commissions, penalties, and other compensation, including reimbursement for expenses, that may be paid by or on behalf of the consultant in connection with the provision of services to the pension fund or retirement system and (ii) a requirement that the consultant update the disclosure promptly after a modification of those payments or an additional payment.
        (4) A requirement that the investment adviser or
    
consultant, in conjunction with the board's staff, submit periodic written reports, on at least a quarterly basis, for the board's review at its regularly scheduled meetings. All returns on investment shall be reported as net returns after payment of all fees, commissions, and any other compensation.
        (5) Disclosure of the names and addresses of (i) the
    
consultant or investment adviser; (ii) any entity that is a parent of, or owns a controlling interest in, the consultant or investment adviser; (iii) any entity that is a subsidiary of, or in which a controlling interest is owned by, the consultant or investment adviser; (iv) any persons who have an ownership or distributive income share in the consultant or investment adviser that is in excess of 7.5%; or (v) serves as an executive officer of the consultant or investment adviser.
        (6) A disclosure of the names and addresses of all
    
subcontractors, if applicable, and the expected amount of money each will receive under the contract, including an acknowledgment that the contractor must promptly make notification, in writing, if at any time during the term of the contract a contractor adds or changes any subcontractors. For purposes of this subparagraph (6), "subcontractor" does not include non-investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy-voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships.
        (7) A description of service to be performed.
        (8) A description of the need for the service.
        (9) A description of the plan for post-performance
    
review.
        (10) A description of the qualifications necessary.
        (11) The duration of the contract.
        (12) The method for charging and measuring cost.
    (d) Notwithstanding any other provision of law, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall not enter into a contract with a consultant that exceeds 5 years in duration. No contract to provide consulting services may be renewed or extended. At the end of the term of a contract, however, the consultant is eligible to compete for a new contract as provided in this Section. No retirement system, pension fund, or investment board shall attempt to avoid or contravene the restrictions of this subsection (d) by any means.
    (e) Within 60 days after the effective date of this amendatory Act of the 96th General Assembly, each investment adviser or consultant currently providing services or subject to an existing contract for the provision of services must disclose to the board of trustees all direct and indirect fees, commissions, penalties, and other compensation paid by or on behalf of the investment adviser or consultant in connection with the provision of those services and shall update that disclosure promptly after a modification of those payments or an additional payment. The person shall update the disclosure promptly after a modification of those payments or an additional payment. The disclosures required by this subsection (e) shall be in writing and shall include the date and amount of each payment and the name and address of each recipient of a payment.
    (f) The retirement system, pension fund, or board of investment shall develop uniform documents that shall be used for the solicitation, review, and acceptance of all investment services. The form shall include the terms contained in subsection (c) of this Section. All such uniform documents shall be posted on the retirement system's, pension fund's, or investment board's web site.
    (g) A description of every contract for investment services shall be posted in a conspicuous manner on the web site of the retirement system, pension fund, or investment board. The description must include the name of the person or entity awarded a contract, the total amount applicable to the contract, the total fees paid or to be paid, and a disclosure approved by the board describing the factors that contributed to the selection of an investment adviser or consultant.
(Source: P.A. 98-433, eff. 8-16-13.)

40 ILCS 5/1-113.15

    (40 ILCS 5/1-113.15)
    Sec. 1-113.15. Qualified fund-of-fund management services.
    (a) As used in this Section:
    "Qualified fund-of-fund management services" means either (i) the services of an investment adviser acting in its capacity as an investment manager of a fund-of-funds or (ii) an investment adviser acting in its capacity as an investment manager of a separate account that is invested on a side-by-side basis in a substantially identical manner to a fund-of-funds, in each case pursuant to qualified written agreements.
    "Qualified written agreements" means one or more written contracts to which the investment adviser and the board are parties and includes all of the following: (i) the matters described in items (1), (4), (5), (7), (11), and (12) of subsection (c) of Section 1-113.14; (ii) a description of any fees, commissions, penalties, and other compensation payable, if any, directly by the retirement system, pension fund, or investment board (which shall not include any fees, commissions, penalties, and other compensation payable from the assets of the fund-of-funds or separate account); (iii) a description (or method of calculation) of the fees and expenses payable by the Fund to the investment adviser and the timing of the payment of the fees or expenses; and (iv) a description (or method of calculation) of any carried interest or other performance based interests, fees, or payments allocable by the Fund to the investment adviser or an affiliate of the investment adviser and the priority of distributions with respect to such interest.
    (b) A description of every contract for qualified fund-of-fund management services must be posted in a conspicuous manner on the web site of the retirement system, pension fund, or investment board. The description must include the name of the fund-of-funds, the name of its investment adviser, the total investment commitment of the retirement system, pension fund, or investment board to invest in such fund-of-funds, and a disclosure approved by the board describing the factors that contributed to the investment in such fund-of-funds. No information that is exempt from inspection pursuant to Section 7 of the Freedom of Information Act shall be disclosed under this Section.
(Source: P.A. 96-1554, eff. 3-18-11.)

40 ILCS 5/1-113.16

    (40 ILCS 5/1-113.16)
    Sec. 1-113.16. Investment transparency.
    (a) The purpose of this Section is to provide for transparency in the investment of retirement or pension funds and require the reporting of full and complete information regarding the investments by pension funds, retirement systems, and investment boards.
    (b) A retirement system, pension fund, or investment board subject to this Code and any committees established by such system, fund, or board must comply with the Open Meetings Act.
    (c) Any retirement system, pension fund, or investment board subject to this Code that establishes a committee shall ensure that the majority of the members on such committee are board members. If any member of a committee is not a member of the board for the system, fund, or board, then that committee member shall be a fiduciary.
    (d) A retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1-113.2, shall maintain an official web site and make available in a clear and conspicuous manner, and update at least quarterly, all of the following information concerning the investment of funds:
        (1) The total amount of funds held by the pension
    
fund, retirement system, or investment board.
        (2) The asset allocation for the investments made by
    
the pension fund, retirement system, or investment board.
        (3) Current and historic return information.
        (4) A detailed listing of the investment advisers for
    
all asset classes.
        (5) Performance of investments compared against
    
established benchmarks.
        (6) A detailed list of all consultants doing business
    
with the retirement system, pension fund, or investment board.
        (7) A detailed list of all contractors, other than
    
investment advisers and consultants, doing business with the retirement system, pension fund, or investment board.
        (8) Any requests for investment services.
        (9) The names and email addresses of all board
    
members, directors, and senior staff.
        (10) The report required under Section 1-109.1 of
    
this Code, if applicable.
        (11) The description of each contract required under
    
subsection (g) of Section 1-113.14 of this Code, if applicable.
    (e) A pension fund whose investments are restricted by Section 1-113.2 of this Code shall make the information required in subsection (d) of this Section available on its web site or in a location that allows the information to be available for inspection by the public.
    (f) Nothing in this Section requires the pension fund, retirement system, or investment board to make information available on the Internet that is exempt from inspection and copying under the Freedom of Information Act.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-113.18

    (40 ILCS 5/1-113.18)
    Sec. 1-113.18. Ethics training. All board members of a retirement system, pension fund, or investment board created under this Code must attend ethics training of at least 8 hours per year. The training required under this Section shall include training on ethics, fiduciary duty, and investment issues and any other curriculum that the board of the retirement system, pension fund, or investment board establishes as being important for the administration of the retirement system, pension fund, or investment board. The Supreme Court of Illinois shall be responsible for ethics training and curriculum for judges designated by the Court to serve as members of a retirement system, pension fund, or investment board. Each board shall annually certify its members' compliance with this Section and submit an annual certification to the Division of Insurance of the Department of Financial and Professional Regulation. Judges shall annually certify compliance with the ethics training requirement and shall submit an annual certification to the Chief Justice of the Supreme Court of Illinois.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-113.20

    (40 ILCS 5/1-113.20)
    Sec. 1-113.20. Investment strategies; explicit and implicit costs. Every pension fund, retirement system, and investment board created under this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall instruct the fund's, system's, or board's investment advisors to utilize investment strategies designed to ensure that all securities transactions are executed in such a manner that the total explicit and implicit costs and total proceeds in every transaction are the most favorable under the circumstances.
(Source: P.A. 96-753, eff. 8-25-09.)

40 ILCS 5/1-113.21

    (40 ILCS 5/1-113.21)
    Sec. 1-113.21. Contracts for services.
    (a) Beginning January 1, 2015, no contract, oral or written, for investment services, consulting services, or commitment to a private market fund shall be awarded by a retirement system, pension fund, or investment board established under this Code unless the investment advisor, consultant, or private market fund first discloses:
        (1) the number of its investment and senior staff and
    
the percentage of its investment and senior staff who are (i) a minority person, (ii) a woman, and (iii) a person with a disability; and
        (2) the number of contracts, oral or written, for
    
investment services, consulting services, and professional and artistic services that the investment advisor, consultant, or private market fund has with (i) a minority-owned business, (ii) a women-owned business, or (iii) a business owned by a person with a disability; and
        (3) the number of contracts, oral or written, for
    
investment services, consulting services, and professional and artistic services the investment advisor, consultant, or private market fund has with a business other than (i) a minority-owned business, (ii) a women-owned business or (iii) a business owned by a person with a disability, if more than 50% of services performed pursuant to the contract are performed by (i) a minority person, (ii) a woman, and (iii) a person with a disability.
    (b) The disclosures required by this Section shall be considered, within the bounds of financial and fiduciary prudence, prior to the awarding of a contract, oral or written, for investment services, consulting services, or commitment to a private market fund.
    (c) For the purposes of this Section, the terms "minority person", "woman", "person with a disability", "minority-owned business", "women-owned business", and "business owned by a person with a disability" have the same meaning as those terms have in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.
    (d) For purposes of this Section, the term "private market fund" means any private equity fund, private equity fund of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.
(Source: P.A. 100-391, eff. 8-25-17.)

40 ILCS 5/1-114

    (40 ILCS 5/1-114) (from Ch. 108 1/2, par. 1-114)
    Sec. 1-114. Liability for Breach of Fiduciary Duty.
    (a) Any person who is a fiduciary with respect to a retirement system or pension fund established under this Code who breaches any duty imposed upon fiduciaries by this Code, including, but not limited to, a failure to report a reasonable suspicion of a false statement specified in Section 1-135 of this Code, shall be personally liable to make good to such retirement system or pension fund any losses to it resulting from each such breach, and to restore to such retirement system or pension fund any profits of such fiduciary which have been made through use of assets of the retirement system or pension fund by the fiduciary, and shall be subject to such equitable or remedial relief as the court may deem appropriate, including the removal of such fiduciary.
    (b) No person shall be liable with respect to a breach of fiduciary duty under this Code if such breach occurred before such person became a fiduciary or after such person ceased to be a fiduciary.
(Source: P.A. 97-651, eff. 1-5-12.)

40 ILCS 5/1-115

    (40 ILCS 5/1-115) (from Ch. 108 1/2, par. 1-115)
    Sec. 1-115. Civil enforcement. A civil action may be brought by the Attorney General or by a participant, beneficiary or fiduciary in order to:
        (a) Obtain appropriate relief under Section 1-114 of
    
this Code;
        (b) Enjoin any act or practice which violates any
    
provision of this Code; or
        (c) Obtain other appropriate equitable relief to
    
redress any such violation or to enforce any such provision.
    Notwithstanding any other provision of the Administrative Review Law or this Code to the contrary, a civil action may be brought by the Attorney General to enjoin the payment of benefits under this Code to any person who is convicted of any felony relating to or arising out of or in connection with that person's service as an employee under this Code.
(Source: P.A. 98-1137, eff. 6-1-15.)

40 ILCS 5/1-116

    (40 ILCS 5/1-116) (from Ch. 108 1/2, par. 1-116)
    Sec. 1-116. Federal contribution and benefit limitations.
    (a) This Section applies to all pension funds and retirement systems established under this Code.
    (a-5) All pension funds and retirement systems established under this Code shall comply with the applicable contribution and benefit limitations imposed by Section 415 of the U.S. Internal Revenue Code of 1986 for tax qualified plans under Section 401(a) of that Code.
    (b) If any benefit payable by a pension fund or retirement system subject to this Section exceeds the applicable benefit limits set by Section 415 of the U.S. Internal Revenue Code of 1986 for tax qualified plans under Section 401(a) of that Code, the excess shall be payable only from an excess benefit fund established under this Section in accordance with federal law.
    (c) An excess benefit fund shall be established by any pension fund or retirement system subject to this Section that has any member eligible to receive a benefit that exceeds the applicable benefit limits set by Section 415 of the U.S. Internal Revenue Code of 1986 for tax qualified plans under Section 401(a) of that Code. Amounts shall be credited to the excess benefit fund, and payments for excess benefits made from the excess benefit fund, in a manner consistent with the applicable federal law.
    (d) For purposes of matters relating to the benefit limits set by Section 415 of the U.S. Internal Revenue Code of 1986, the limitation year may be defined by each affected pension fund or retirement system for that fund or system.
(Source: P.A. 90-19, eff. 6-20-97; 91-887, eff. 7-6-00.)

40 ILCS 5/1-116.1

    (40 ILCS 5/1-116.1)
    Sec. 1-116.1. Required distributions. Notwithstanding any other provision of this Code, all pension funds and retirement systems established under Articles 2 through 18 of this Code have the authority to make any involuntary distributions that are required by federal law under Section 401(a)(9) of the Internal Revenue Code of 1986, as now or hereafter amended. A distribution shall be deemed to be required if failure to make the distribution could affect the qualified plan status of the pension fund or retirement system or could result in the imposition of a substantial penalty on the taxpayer or on the pension fund or retirement system.
(Source: P.A. 89-136, eff. 7-14-95.)

40 ILCS 5/1-117

    (40 ILCS 5/1-117)
    Sec. 1-117. Annual earnings limitation.
    (a) Notwithstanding any other provision of this Code, except as provided in subsection (b), beginning on the first day of the plan year beginning in 1996, the annual earnings of a person that may be taken into account in any year for any purpose under this Code shall not exceed the maximum dollar limitation specified in Section 401(a)(17) of the Internal Revenue Code of 1986, as that Section may be amended from time to time and as that compensation limit may be adjusted from time to time by the Commissioner of Internal Revenue.
    (b) In the case of a person who first began participating in a pension fund or retirement system governed by this Code before the first day of the plan year beginning in 1996, the dollar limitation under Section 401(a)(17) of the Internal Revenue Code of 1986 does not apply to the extent that the earnings that may be taken into account by that fund or system under this Code would be reduced below the amount that was allowed to be taken into account under its governing Article of this Code or under Article 1 or Article 20 of this Code, as those Articles were in effect on July 1, 1993.
    (c) This Section takes effect on December 31, 1995.
(Source: P.A. 89-136, eff. 12-31-95.)

40 ILCS 5/1-118

    (40 ILCS 5/1-118)
    Sec. 1-118. Veterans' rights.
    (a) All pension funds and retirement systems subject to this Code shall comply with the requirements imposed on them by the federal Uniformed Services Employment and Reemployment Rights Act (P.L. 103-353).
    (b) All pension funds and retirement systems subject to this Code shall comply with the federal Heroes Earnings Assistance and Relief Tax Act of 2008 (P.L. 110-245).
(Source: P.A. 97-530, eff. 8-23-11.)

40 ILCS 5/1-119

    (40 ILCS 5/1-119)
    Sec. 1-119. Qualified Illinois Domestic Relations Orders.
    (a) For the purposes of this Section:
        (1) "Alternate payee" means the spouse, former
    
spouse, child, or other dependent of a member, as designated in a QILDRO.
        (2) "Death benefit" means any nonperiodic benefit
    
payable upon the death of a member to a survivor of the member or to the member's estate or designated beneficiary, including any refund of contributions following the member's death, whether or not the benefit is so called under the applicable Article of this Code.
        (3) "Disability benefit" means any periodic or
    
nonperiodic benefit payable to a disabled member based on occupational or nonoccupational disability or disease, including any periodic or nonperiodic increases in the benefit, whether or not the benefit is so called under the applicable Article of this Code.
        (4) "Member" means any person who participates in or
    
has service credits in a retirement system, including a person who is receiving or is eligible to receive a retirement or disability benefit, without regard to whether the person has withdrawn from service.
        (5) "Member's refund" means a return of all or a
    
portion of a member's contributions that is elected by the member (or provided by operation of law) and is payable before the member's death.
        (5.5) "Permissive service" means service credit
    
purchased by the member, unused vacation, and unused sick leave that the retirement system includes by statute in a member's benefit calculations.
        (6) "Qualified Illinois Domestic Relations Order" or
    
"QILDRO" means an Illinois court order that creates or recognizes the existence of an alternate payee's right to receive all or a portion of a member's accrued benefits in a retirement system, is issued pursuant to this Section and Section 503(b)(2) of the Illinois Marriage and Dissolution of Marriage Act, and meets the requirements of this Section. A QILDRO is not the same as a qualified domestic relations order or QDRO issued pursuant to Section 414(p) of the Internal Revenue Code of 1986. The requirements of paragraphs (2) and (3) of that Section do not apply to orders issued under this Section and shall not be deemed a guide to the interpretation of this Section; a QILDRO is intended to be a domestic relations order within the meaning of paragraph (11) of that Section.
        (7) "Regular payee" means the person to whom a
    
benefit would be payable in the absence of an effective QILDRO.
        (7.5) "Regular service" means service credit earned
    
by the member, including a repayment of a refund for regular service that the retirement system includes by statute in a member's benefit calculations. "Regular service" does not include service credit purchased by the member, unused vacation, or unused sick leave.
        (8) "Retirement benefit" means any periodic or
    
nonperiodic benefit payable to a retired member based on age or service, or on the amounts accumulated to the credit of the member for retirement purposes, including any periodic or nonperiodic increases in the benefit, whether or not the benefit is so called under the applicable Article of this Code.
        (9) "Retirement system" or "system" means any
    
retirement system, pension fund, or other public employee retirement benefit plan that is maintained or established under any of Articles 2 through 18 of this Code.
        (10) "Surviving spouse" means the spouse of a member
    
at the time of the member's death.
        (11) "Survivor's benefit" means any periodic benefit
    
payable to a surviving spouse, child, parent, or other survivor of a deceased member, including any periodic or nonperiodic increases in the benefit or nonperiodic payment included with the benefit, whether or not the benefit is so called under the applicable Article of this Code.
    (b) (1) An Illinois court of competent jurisdiction in a proceeding for declaration of invalidity of marriage, legal separation, or dissolution of marriage that provides for support or the distribution of property, or any proceeding to amend or enforce such support or property distribution, may order that all or any part of any (i) member's retirement benefit, (ii) member's refund payable to or on behalf of the member, or (iii) death benefit, or portion thereof, that would otherwise be payable to the member's death benefit beneficiaries or estate be instead paid by the retirement system to the alternate payee.
    (2) An order issued under this Section provides only for the diversion to an alternate payee of certain benefits otherwise payable by the retirement system under the provisions of this Code. The existence of a QILDRO shall not cause the retirement system to pay any benefit, or any amount of benefit, to an alternate payee that would not have been payable by the system to a regular payee in the absence of the QILDRO.
    (3) A QILDRO shall not affect the vesting, accrual, or amount of any benefit, nor the date or conditions upon which any benefit becomes payable, nor the right of the member or the member's survivors to make any election otherwise authorized under this Code, except as provided in subsections (i) and (j).
    (4) A QILDRO shall not apply to or affect the payment of any survivor's benefit, disability benefit, life insurance benefit, or health insurance benefit.
    (c) (1) A QILDRO must contain the name, mailing address, and social security number of the member and of the alternate payee and must identify the retirement system to which it is directed and the court issuing the order.
    (2) A QILDRO must specify each benefit to which it applies, and it must specify the amount of the benefit to be paid to the alternate payee. In the case of a non-periodic benefit, this amount must be specified as a dollar amount or as a percentage as specifically provided in subsection (n). In the case of a periodic benefit, this amount must be specified as a dollar amount per month or as a percentage per month as specifically provided in subsection (n).
    (3) With respect to each benefit to which it applies, a QILDRO must specify when the order will take effect. In the case of a lump sum benefit payable to an alternate payee of a participant in the self-managed plan authorized under Article 15 of this Code, the benefit shall be paid upon the proper request of the alternate payee. In the case of a periodic benefit that is being paid at the time the order is received, a QILDRO shall take effect immediately or on a specified later date; if it takes effect immediately, it shall become effective on the first benefit payment date occurring at least 30 days after the order is received by the retirement system. In the case of any other benefit, a QILDRO shall take effect when the benefit becomes payable, unless some later date is specified pursuant to subsection (n). However, in no event shall a QILDRO apply to any benefit paid by the retirement system before or within 30 days after the order is received. A retirement system may adopt rules to prorate the amount of the first and final periodic payments to an alternate payee.
    (4) A QILDRO must also contain any provisions required under subsection (n) or (p).
    (5) If a QILDRO indicates that the alternate payee is to receive a percentage of any retirement system benefit, the calculations required shall be performed by the member, the alternate payee, their designated representatives or their designated experts. The results of said calculations shall be provided to the retirement system via a QILDRO Calculation Court Order issued by an Illinois court of competent jurisdiction in a proceeding for declaration of invalidity of marriage, legal separation, or dissolution of marriage. The QILDRO Calculation Court Order shall follow the form provided in subsection (n-5). The retirement system shall have no duty or obligation to assist in such calculations or in completion of the QILDRO Calculation Court Order, other than to provide the information required to be provided pursuant to subsection (h).
    (6) Within 45 days after the receipt of a QILDRO Calculation Court Order, the retirement system shall notify the member and the alternate payee (or one designated representative of each) of the receipt of the Order. If a valid QILDRO underlying the QILDRO Calculation Court Order has not been filed with the retirement system, or if the QILDRO Calculation Court Order does not clearly indicate the amount the retirement system is to pay to the alternate payee, then the retirement system shall at the same time notify the member and the alternate payee (or one designated representative of each) of the situation. Unless a valid QILDRO has not been filed with the retirement system, or the QILDRO Calculation Court Order does not clearly indicate the amount the retirement system is to pay the alternate payee, the retirement system shall implement the QILDRO based on the QILDRO Calculation Court Order as soon as administratively possible once benefits are payable. The retirement system shall have no obligation to make any determination as to whether the calculations in the QILDRO Calculation Court Order are accurate or whether the calculations are in accordance with the parties' QILDRO, agreement, or judgment. The retirement system shall not reject a QILDRO Calculation Court Order because the calculations are not accurate or not in accordance with the parties' QILDRO, agreement, or judgment. The retirement system shall have no responsibility for the consequences of its implementation of a QILDRO Calculation Court Order that is inaccurate or not in accordance with the parties' QILDRO, agreement, or judgment.
    (d) (1) An order issued under this Section shall not be implemented unless a certified copy of the order has been filed with the retirement system. The system shall promptly notify the member and the alternate payee by first class mail of its receipt of the order.
    (2) Neither the retirement system, nor its board, nor any of its employees shall be liable to the member, the regular payee, or any other person for any amount of a benefit that is paid in good faith to an alternate payee in accordance with a QILDRO.
    (3) Each new or modified QILDRO or QILDRO Calculation Court Order that is submitted to the retirement system shall be accompanied by a nonrefundable $50 processing fee payable to the retirement system, to be used by the system to defer any administrative costs arising out of the implementation of the order.
    (e) (1) Each alternate payee is responsible for maintaining a current mailing address on file with the retirement system. The retirement system shall have no duty to attempt to locate any alternate payee by any means other than sending written notice to the last known address of the alternate payee on file with the system.
    (2) In the event that the system cannot locate an alternate payee when a benefit becomes payable, the system shall hold the amount of the benefit payable to the alternate payee and make payment to the alternate payee if he or she is located within the following 180 days. If the alternate payee has not been located within 180 days from the date the benefit becomes payable, the system shall pay the benefit and the amounts held to the regular payee. If the alternate payee is subsequently located, the system shall thereupon implement the QILDRO, but the interest of the alternate payee in any amounts already paid to the regular payee shall be extinguished. Amounts held under this subsection shall not bear interest.
    (f) (1) If the amount of a benefit that is specified in a QILDRO or QILDRO Calculation Court Order for payment to an alternate payee exceeds the actual amount of that benefit payable by the retirement system, the excess shall be disregarded. The retirement system shall have no liability to any alternate payee or any other person for the disregarded amounts.
    (2) In the event of multiple QILDROs against a member, the retirement system shall honor all of the QILDROs to the extent possible. However, if the total amount of a benefit to be paid to alternate payees under all QILDROs in effect against the member exceeds the actual amount of that benefit payable by the system, the QILDROs shall be satisfied in the order of their receipt by the system until the amount of the benefit is exhausted, and shall not be adjusted pro rata. Any amounts that cannot be paid due to exhaustion of the benefit shall remain unpaid, and the retirement system shall have no liability to any alternate payee or any other person for such amounts.
    (3) A modification of a QILDRO shall be filed with the retirement system in the same manner as a new QILDRO. A modification that does not increase the amount of any benefit payable to the alternate payee, as that amount was designated in the QILDRO, and does not expand the QILDRO to affect any benefit not affected by the unmodified QILDRO, does not affect the priority of payment under subdivision (f)(2); the priority of payment of a QILDRO that has been modified to increase the amount of any benefit payable to the alternate payee, or to expand the QILDRO to affect a benefit not affected by the unmodified QILDRO, shall be based on the date on which the system receives the modification of the QILDRO.
    (4) A modification of a QILDRO Calculation Court Order shall be filed with the retirement system in the same manner as a new QILDRO Calculation Court Order.
    (g) (1) Upon the death of the alternate payee under a QILDRO, the QILDRO shall expire and cease to be effective, and in the absence of another QILDRO, the right to receive any affected benefit shall revert to the regular payee.
    (2) All QILDROs relating to a member's participation in a particular retirement system shall expire and cease to be effective upon the issuance of a member's refund that terminates the member's participation in that retirement system, without regard to whether the refund was paid to the member or to an alternate payee under a QILDRO. An expired QILDRO shall not be automatically revived by any subsequent return by the member to service under that retirement system.
    (h) (1) Within 45 days after receiving a subpoena from any party to a proceeding for declaration of invalidity of marriage, legal separation, or dissolution of marriage in which a QILDRO may be issued, or after receiving a request from the member, a retirement system shall provide in response a statement of a member's accumulated contributions, accrued benefits, and other interests in the plan administered by the retirement system based on the data on file with the system on the date the subpoena is received. If so requested in the subpoena, the retirement system shall also provide in response general retirement plan information available to a member and any relevant procedures, rules, or modifications to the model QILDRO form that have been adopted by the retirement system.
    (1.5) If a QILDRO provides for the alternate payee to receive a percentage of a retirement benefit (as opposed to providing for the alternate payee to receive specified dollar amounts of a retirement benefit), then the retirement system shall provide the applicable information to the member and to the alternate payee, or to one designated representative of each (e.g., the member's attorney and the alternate payee's attorney) as indicated below:
        (A) If the member is a participant in the
    
self-managed plan authorized under Article 15 of this Code and the QILDRO provides that the only benefit the alternate payee is to receive is a percentage of a lump sum benefit as of a specific date that has already past, then, within 45 days after the retirement system receives the QILDRO, the retirement system shall provide the lump sum amount to which the QILDRO percentage is to be applied.
        (B) For all situations except that situation
    
described in item (A), if the retirement system receives the QILDRO before the member's effective date of retirement, then, within 45 days after the retirement system receives the QILDRO, the retirement system shall provide all of the following information:
            (i) The date of the member's initial membership
        
in the retirement system, expressed as month, day, and year, if available, or the most exact date that is available to the retirement system.
            (ii) The amount of permissive and regular service
        
the member accumulated in the retirement system from the time of initial membership through the most recent date available prior to the retirement system receiving the QILDRO (the dates used by the retirement system shall also be provided). Service amounts shall be expressed using the most exact time increments available to the retirement system (e.g., months or fractions of years).
            (iii) The gross amount of the member's
        
non-reduced monthly annuity benefit earned, calculated as of the most recent date available prior to the retirement system receiving the QILDRO, the date used by the retirement system, and the earliest date the member may be eligible to commence the benefit. This amount shall include any permissive service and upgrades purchased by the member, and those amounts shall be noted separately.
            (iv) The gross amount of the member's refund or
        
partial refund, including any interest payable on those amounts, calculated as of the most recent date available prior to the retirement system receiving the QILDRO (the date used by the retirement system shall also be provided).
            (v) The gross amount of the death benefits that
        
would be payable to the member's death benefit beneficiaries or estate, assuming the member died on the date or a date as close as possible to the date the QILDRO was received by the retirement system, including any interest payable on the amounts, calculated as of the most recent date available prior to the retirement system receiving the QILDRO (the date used by the retirement system shall also be provided).
            (vi) Whether the member has notified the
        
retirement system of the date the member intends to retire, and if so, that date.
            (vii) If the member has provided a date that he
        
or she intends to retire, the date, if available, that the retirement system reasonably believes will be the member's effective date of retirement.
        (C) For all situations except that situation
    
described in item (A), if the retirement system receives the QILDRO after the effective date of retirement, then, within 45 days after the retirement system receives the QILDRO, or, if the retirement system receives the QILDRO before the member's effective date of retirement, then as soon as administratively possible before or after the member's effective date of retirement (but not later than 45 days after the member's effective date of retirement), the retirement system shall provide all of the following information:
            (i) The member's effective date of retirement.
            (ii) The date the member commenced benefits or,
        
if not yet commenced, the date the retirement system has scheduled the member's benefits to commence.
            (iii) The amount of permissive and regular
        
service the member accumulated in the retirement system from the time of initial membership through the member's effective date of retirement. Service amounts shall be expressed using the most exact time increments available to the retirement system (e.g., months or fractions of years).
            (iv) The gross amount of the member's monthly
        
retirement benefit, calculated as of the member's effective date of retirement. This amount shall include any permissive service and upgrades purchased by the member, and those amounts shall be noted separately.
            (v) The gross amount of the member's refund or
        
partial refund, including any interest payable on those amounts, calculated as of the member's effective date of retirement.
            (vi) The gross amount of death benefits that
        
would be payable to the member's death benefit beneficiaries or estate, assuming the member died on the member's effective date of retirement, including any interest payable on those amounts.
        (D) If, and only if, the alternate payee is entitled
    
to benefits under Section VII of the QILDRO, then, within 45 days after the retirement system receives notice of the member's death, the retirement system shall provide the gross amount of death benefits payable, including any interest payable on those amounts, calculated as of the member's date of death.
    (2) In no event shall the retirement system be required to furnish to any person an actuarial opinion as to the present value of the member's benefits or other interests.
    (3) The papers, entries, and records, or parts thereof, of any retirement system may be proved by a copy thereof, certified under the signature of the secretary of the system or other duly appointed keeper of the records of the system and the corporate seal, if any.
    (i) In a retirement system in which a member or beneficiary is required to apply to the system for payment of a benefit, the required application may be made by an alternate payee who is entitled to all of a termination refund or retirement benefit or part of a death benefit that is payable under a QILDRO, provided that all other qualifications and requirements have been met. However, the alternate payee may not make the required application for death benefits while the member is alive or for a member's refund or a retirement benefit if the member is in active service or below the minimum age for receiving an undiscounted retirement annuity in the retirement system that has received the QILDRO or in any other retirement system in which the member has regular or permissive service and in which the member's rights under the Retirement Systems Reciprocal Act would be affected as a result of the alternate payee's application for a member's refund or retirement benefit.
    (j) (1) So long as there is in effect a QILDRO relating to a member's retirement benefit, the affected member may not elect a form of payment that has the effect of diminishing the amount of the payment to which any alternate payee is entitled, unless the alternate payee has consented to the election in a writing that includes the alternate payee's notarized signature, and this written and notarized consent has been filed with the retirement system.
    (2) If a member attempts to make an election prohibited under subdivision (j)(1), the retirement system shall reject the election and advise the member of the need to obtain the alternate payee's consent.
    (3) If a retirement system discovers that it has mistakenly allowed an election prohibited under subdivision (j)(1), it shall thereupon disallow that election and recalculate any benefits affected thereby. If the system determines that an amount paid to a regular payee should have been paid to an alternate payee, the system shall, if possible, recoup the amounts as provided in subsection (k) of this Section.
    (k) In the event that a regular payee or an alternate payee is overpaid, the retirement system shall have the authority to and shall recoup the amounts by deducting the overpayment from future payments and making payment to the other payee. The system may make deductions for recoupment over a period of time in the same manner as is provided by law or rule for the recoupment of other amounts incorrectly disbursed by the system in instances not involving a QILDRO. The retirement system shall incur no liability to either the alternate payee or the regular payee as a result of any payment made in good faith, regardless of whether the system is able to accomplish recoupment.
    (l) (1) A retirement system that has, before the effective date of this Section, received and implemented a domestic relations order that directs payment of a benefit to a person other than the regular payee may continue to implement that order, and shall not be liable to the regular payee for any amounts paid in good faith to that other person in accordance with the order.
    (2) A domestic relations order directing payment of a benefit to a person other than the regular payee that was issued by a court but not implemented by a retirement system prior to the effective date of this Section shall be void. However, a person who is the beneficiary or alternate payee of a domestic relations order that is rendered void under this subsection may petition the court that issued the order for an amended order that complies with this Section.
    (3) A retirement system that received a valid QILDRO before the effective date of this amendatory Act of the 94th General Assembly shall continue to implement the QILDRO and shall not be liable to any party for amounts paid in good faith pursuant to the QILDRO.
    (m) (1) In accordance with Article XIII, Section 5 of the Illinois Constitution, which prohibits the impairment or diminishment of benefits granted under this Code, a QILDRO issued against a member of a retirement system established under an Article of this Code that exempts the payment of benefits or refunds from attachment, garnishment, judgment or other legal process shall not be effective without the written consent of the member if the member began participating in the retirement system on or before the effective date of this Section. That consent must specify the retirement system, the court case number, and the names and social security numbers of the member and the alternate payee. The consent must accompany the QILDRO when it is filed with the retirement system, and must be in substantially the following form:
 
CONSENT TO ISSUANCE OF QILDRO

Case Caption: ...................................
Court Case Number: ....................
Member's Name: ..................................
Member's Social Security Number: ........................
Alternate payee's Name: .........................
Alternate payee's Social Security Number: ...............
    I, (name), a member of the (retirement system), hereby irrevocably consent to the issuance of a Qualified Illinois Domestic Relations Order. I understand that under the Order, certain benefits that would otherwise be payable to me, or to my death benefit beneficiaries or estate, will instead be payable to (name of alternate payee). I also understand that my right to elect certain forms of payment of my retirement benefit or member's refund may be limited as a result of the Order.
    DATED:.......................
    SIGNED:......................
 
    (2) A member's consent to the issuance of a QILDRO shall be irrevocable, and shall apply to any QILDRO that pertains to the alternate payee and retirement system named in the consent.
    (n) A QILDRO issued under this Section shall be in substantially the following form (omitting any provisions that are not applicable to benefits that are or may be ultimately payable to the member):
 
QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER

...................................
(Enter Case Caption Here)
...................................
(Enter Retirement System Name Here)
 
    THIS CAUSE coming before the Court for the purpose of the entry of a Qualified Illinois Domestic Relations Order under the provisions of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), the Court having jurisdiction over the parties and the subject matter hereof; the Court finding that one of the parties to this proceeding is a member of a retirement system subject to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), this Order is entered to implement a division of that party's interest in the retirement system; and the Court being fully advised;
 
IT IS HEREBY ORDERED AS FOLLOWS:
 
    I. The definitions and other provisions of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119) are adopted by reference and made a part of this Order.
    II. Identification of Retirement System and parties:
 
Retirement System:              ............................
                                (Name)
............................
                                  (Address)
 
Member:                         ............................
                                (Name)
............................
                                  (Mailing Address)
............................
                                  (Social Security Number)

 
Alternate payee:                ............................
                                (Name)
............................
                                  (Mailing Address)
............................
                                  (Social Security Number)

 
The alternate payee is the member's .... current or former spouse/ .... child or other dependent [check one].
 
    III. The Retirement System shall pay the indicated amounts of the member's retirement benefits to the alternate payee under the following terms and conditions:
        (A) The Retirement System shall pay the alternate
    
payee pursuant to one of the following methods [complete the ONE option that applies]:
            (1) $...... per month [enter amount]; or
            (2) .......% [enter percentage] per month of the
        
marital portion of said benefit with the marital portion defined using the formula in Section IX; or
            (3) ........% [enter percentage] per month of the
        
gross amount of said benefit calculated as of the date the .... member's/ .... alternate payee's [check one] benefit commences [check alternate payee only if the alternate payee will commence benefits after the member commences benefits, e.g. if the member is receiving retirement benefits at the time this Order is entered].
        (B) If the member's retirement benefit has already
    
commenced, payments to the alternate payee shall commence either [check/complete the ONE option that applies]:
            (1) .... as soon as administratively possible
        
upon this order being received and accepted by the Retirement System; or
            (2) .... on the date of ........ [enter any
        
benefit payment date that will occur at least 30 days after the date the retirement system receives a valid QILDRO, but ONLY if payment to the alternate payee is to be delayed to some future date; otherwise, check item (1) above].
        (C) If the member's retirement benefit has not yet
    
commenced, payments to the alternate payee shall commence as of the date the member's retirement benefit commences.
        (D) Payments to the alternate payee under this
    
Section III shall terminate [check/complete the ONE option that applies]:
            (1) .... upon the death of the member or the
        
death of the alternate payee, whichever is the first to occur; or
            (2) .... after ........ payments are made to the
        
alternate payee [enter any set number] or upon the death of the member or the death of the alternate payee, whichever is the first to occur.
    IV. If the member's retirement benefits are subject to annual post-retirement increases, the alternate payee's share of said benefits .... shall/ .... shall not [check one] be recalculated or increased annually to include a proportionate share of the applicable annual increases.
    V. The Retirement System shall pay to the alternate payee the indicated amounts of any refund upon termination or any lump sum retirement benefit that becomes payable to the member, under the following terms and conditions:
        (A) The Retirement System shall pay the alternate
    
payee pursuant to one of the following methods [complete the ONE option that applies]:
            (1) $..... [enter amount]; or
            (2) .....% [enter percentage] of the marital
        
portion of the refund or lump sum retirement benefit, with the marital portion defined using the formula in Section IX; or
            (3) ......% [enter percentage] of the gross
        
amount of the refund or lump sum retirement benefit, calculated when the member's refund or lump sum retirement benefit is paid.
        (B) The amount payable to an alternate payee under
    
Section V(A)(2) or V(A)(3) shall include any applicable interest that would otherwise be payable to the member under the rules of the Retirement System.
        (C) The alternate payee's share of the refund or lump
    
sum retirement benefit under this Section V shall be paid when the member's refund or lump sum retirement benefit is paid.
    VI. The Retirement System shall pay to the alternate payee the indicated amounts of any partial refund that becomes payable to the member under the following terms and conditions:
        (A) The Retirement System shall pay the alternate
    
payee pursuant to one of the following methods [complete the ONE option that applies]:
            (1) $...... [enter amount]; or
            (2) ......% [enter percentage] of the marital
        
portion of said benefit, with the marital portion defined using the formula in Section IX; or
            (3) ......% [enter percentage] of the gross
        
amount of the benefit calculated when the member's refund is paid.
        (B) The amount payable to an alternate payee under
    
Section VI(A)(2) or VI(A)(3) shall include any applicable interest that would otherwise be payable to the member under the rules of the Retirement System.
        (C) The alternate payee's share of the refund under
    
this Section VI shall be paid when the member's refund is paid.
    VII. The Retirement System shall pay to the alternate payee the indicated amounts of any death benefits that become payable to the member's death benefit beneficiaries or estate under the following terms and conditions:
        (A) To the extent and only to the extent required to
    
effectuate this Section VII, the alternate payee shall be designated as and considered to be a beneficiary of the member at the time of the member's death and shall receive [complete ONE of the following options]:
            (1) $...... [enter amount]; or
            (2) ......% [enter percentage] of the marital
        
portion of death benefits, with the marital portion defined using the formula in Section IX; or
            (3) ......% [enter percentage] of the gross
        
amount of death benefits calculated when said benefits become payable.
        (B) The amount payable to an alternate payee under
    
Section VII(A)(2) or VII(A)(3) shall include any applicable interest payable to the death benefit beneficiaries under the rules of the Retirement System.
        (C) The alternate payee's share of death benefits
    
under this Section VII shall be paid as soon as administratively possible after the member's death.
    VIII. If this Order indicates that the alternate payee is to receive a percentage of any retirement benefit or refund, upon receipt of the information required to be provided by the Retirement System under Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), the calculations required shall be performed by the member, by the alternate payee, or by their designated representatives or designated experts. The results of the calculations shall be provided to the Retirement System via a QILDRO Calculation Court Order in accordance with Section 1-119 of the Illinois Pension Code.
    IX. Marital Portion Benefit Calculation Formula (Option to calculate benefit in items III(A)(2), V(A)(2), VI(A)(2), and VII(A)(2) above). If in this Section "other" is circled in the definition of A, B, or C, then a supplemental order must be entered simultaneously with this QILDRO clarifying the intent of the parties or the Court as to that item. The supplemental order cannot require the Retirement System to take any action not permitted under Illinois law or the Retirement System's administrative rules. To the extent that the supplemental order does not conform to Illinois law or administrative rule, it shall not be binding upon the Retirement System.
        (1) The amount of the alternate payee's benefit shall
    
be the result of (A/B) x C x D where:
            "A" equals the number of months of .... regular/
        
.... regular plus permissive/ .... other [check only one] service that the member accumulated in the Retirement System from the date of marriage ....................... [enter date MM/DD/YYYY] to the date of divorce .................... [enter date MM/DD/YYYY]. This number of months of service shall be calculated as whole months after receipt of information required from the Retirement System pursuant to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
            "B" equals the number of months of .... regular/
        
.... regular plus permissive/ .... other [check only one] service that the member accumulated in the Retirement System from the time of initial membership in the Retirement System through the member's effective date of retirement. The number of months of service shall be calculated as whole months after receipt of information required from the Retirement System pursuant to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
            "C" equals the gross amount of:
                (i) the member's monthly retirement benefit
            
(Section III(A)) calculated as of the member's effective date of retirement, .... including/ .... not including/ .... other [check only one] permissive service, upgrades purchased, and other benefit formula enhancements;
                (ii) the member's refund payable upon
            
termination or lump sum retirement benefit that becomes payable, including any payable interest (Section V(A)) calculated as of the time said refund becomes payable to the member;
                (iii) the member's partial refund, including
            
any payable interest (Section VI(A)) calculated as of the time said partial refund becomes payable to the member; or
                (iv) the death benefit payable to the
            
member's death benefit beneficiaries or estate, including any payable interest (Section VII(A)) calculated as of the time said benefit becomes payable to the member's beneficiary;
        whichever are applicable pursuant to Section III, V,
        
VI, or VII of this Order. These gross amounts shall be provided by the Retirement System pursuant to Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
            "D" equals the percentage noted in Section
        
III(A)(2), V(A)(2), VI(A)(2), or VII(A)(2), whichever are applicable.
        (2) The alternate payee's benefit under this Section
    
IX shall be paid in accordance with all Sections of this Order that apply.
    X. In accordance with subsection (j) of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), so long as this QILDRO is in effect, the member may not elect a form of payment of the retirement benefit that has the effect of diminishing the amount of the payment to which the alternate payee is entitled, unless the alternate payee has consented to the election in writing, the consent has been notarized, and the consent has been filed with the Retirement System.
    XI. If the member began participating in the Retirement System before July 1, 1999, this Order shall not take effect unless accompanied by the written consent of the member as required under subsection (m) of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
    XII. The Court retains jurisdiction over this matter for all of the following purposes:
        (1) To establish or maintain this Order as a
    
Qualified Illinois Domestic Relations Order.
        (2) To enter amended QILDROs and QILDRO Calculation
    
Court Orders to conform to the parties' Marital Settlement Agreement or Agreement for Legal Separation ("Agreement"), to the parties' Judgment for Dissolution of Marriage or Judgment for Legal Separation ("Judgment"), to any modifications of the parties' Agreement or Judgment, or to any supplemental orders entered to clarify the parties' Agreement or Judgment.
        (3) To enter supplemental orders to clarify the
    
intent of the parties or the Court regarding the benefits allocated herein in accordance with the parties' Agreement or Judgment, with any modifications of the parties' Agreement or Judgment, or with any supplemental orders entered to clarify the parties' Agreement or Judgment. A supplemental order may not require the Retirement System to take any action not permitted under Illinois law or the Retirement System's administrative rules. To the extent that the supplemental order does not conform to Illinois law or administrative rule, it shall not be binding upon the Retirement System.

 
    DATED: ......................
 
    SIGNED: .....................
            [Judge's Signature]
 
    (n-5) A QILDRO Calculation Court Order issued under this Section shall be in substantially the following form:
 
QILDRO Calculation Court Order

...................................
[Enter case caption here]
...................................
[Enter Retirement System name here]
 
    THIS CAUSE coming before the Court for the purpose of the entry of a QILDRO Calculation Court Order under the provisions of Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119), the Court having jurisdiction over the parties and the subject matter hereof; the Court finding that a QILDRO has previously been entered in this matter, that the QILDRO has been received and accepted by the Retirement System, and that the QILDRO requires percentage calculations to allocate the alternate payee's share of the member's benefit or refund, the Court not having found that the QILDRO has become void or invalid, and the Court being fully advised;
 
    IT IS HEREBY ORDERED AS FOLLOWS:
    (1) The definitions and other provisions of Section 1-119 of the Illinois Pension Code [40 ILCS 5/1-119] are adopted by reference and made a part of this Order.
    (2) Identification of Retirement System and parties:
 
Retirement System:              ............................
                                (Name)
............................
                                  (Address)
 
Member:                         ............................
                                (Name)
............................
                                  (Mailing Address)
............................
                                  (Social Security Number)

 
Alternate payee:                ............................
                                (Name)
............................
                                  (Mailing Address)
............................
                                  (Social Security Number)

 
The Alternate payee is the member's .... current or former spouse/ .... child or other dependent [check one].
 
    (3) The following shall apply if and only if the QILDRO allocated benefits to the alternate payee in the specific Section noted. The Retirement System shall pay the amounts as directed below, but only if and when the benefits are payable pursuant to the QILDRO and Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119). Parties shall see QILDRO Section IX for the definitions of A, B, C and D as used below.
        (a) The alternate payee's benefit pursuant to QILDRO
    
Section III(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:

 
(......./.......) X ....... X .............. = ............
[Enter A] [Enter B] [Enter C]    [Enter D]   [Monthly Amount]
 
        (b) The alternate payee's benefit pursuant to QILDRO
    
Section V(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:

 
(......./.......) X ....... X .............. = ............
[Enter A] [Enter B] [Enter C]    [Enter D]       [Amount]
 
        (c) The alternate payee's benefit pursuant to QILDRO
    
Section VI(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:

 
(......./.......)  X ....... X ............. = ............
[Enter A] [Enter B] [Enter C]    [Enter D]       [Amount]
 
        (d) The alternate payee's benefit pursuant to QILDRO
    
Section VII(A)(2) shall be calculated pursuant to Section IX of the QILDRO and paid as follows:

 
(......./.......) X ....... X .............. = ............
[Enter A] [Enter B] [Enter C]   [Enter D]        [Amount]
 
The Retirement System's sole obligation with respect to the equations in this paragraph (3) is to pay the amounts indicated as the result of the equations. The Retirement System shall have no obligation to review or verify the equations or to assist in the calculations used to determine such amounts.
 
    (4) The following shall apply only if the QILDRO allocated benefits to the alternate payee in the specific Section noted. The Retirement System shall pay the amounts as directed below, but only if and when the benefits are payable pursuant to the QILDRO and Section 1-119 of the Illinois Pension Code (40 ILCS 5/1-119).
        (A) The alternate payee's benefit pursuant to QILDRO
    
Section III(A)(3) shall be calculated and paid as follows:

 
.................... X ............... = .................
[Gross benefit amount]  [Percentage]     [Monthly Amount]
 
        (B) The alternate payee's benefit pursuant to QILDRO
    
Section V(A)(3) shall be calculated and paid as follows:

 
..................... X ............... = .................
[Gross benefit amount]   [Percentage]        [Amount]
 
        (C) The alternate payee's benefit pursuant to QILDRO
    
Section VI(A)(3) shall be calculated and paid as follows:

 
..................... X ............... = .................
[Gross benefit amount]   [Percentage]        [Amount]
 
        (D) The alternate payee's benefit pursuant to QILDRO
    
Section VII(A)(3) shall be calculated and paid as follows:

 
..................... X ............... = .................
[Gross benefit amount]   [Percentage]        [Amount]
 
The Retirement System's sole obligation with respect to the equations in this paragraph (4) is to pay the amounts indicated as the result of the equations. The Retirement System shall have no obligation to review or verify the equations or to assist in the calculations used to determine such amounts.
 
    (5) The Court retains jurisdiction over this matter for the following purposes:
        (A) to establish or maintain this Order as a QILDRO
    
Calculation Court Order;
        (B) to enter amended QILDROs and QILDRO Calculation
    
Court Orders to conform to the parties' QILDRO, Marital Settlement Agreement or Agreement for Legal Separation ("Agreement"), to the parties' Judgment for Dissolution of Marriage or Judgment for Legal Separation ("Judgment"), to any modifications of the parties' QILDRO, Agreement, or Judgment, or to any supplemental orders entered to clarify the parties' QILDRO, Agreement, or Judgment; and
        (C) To enter supplemental orders to clarify the
    
intent of the parties or the Court regarding the benefits allocated herein in accordance with the parties' Agreement or Judgment, with any modifications of the parties' Agreement or Judgment, or with any supplemental orders entered to clarify the parties' Agreement or Judgment. A supplemental order may not require the Retirement System to take any action not permitted under Illinois law or the Retirement System's administrative rules. To the extent the supplemental order does not conform to Illinois law or administrative rule, it shall not be binding upon the Retirement System.

 
    DATED: ......................
 
    SIGNED: .....................
            [Judge's Signature]
 
    (o) (1) A court in Illinois that has issued a QILDRO shall retain jurisdiction of all issues relating to the modification of the QILDRO as indicated in Section XII of the QILDRO and in accordance with Illinois law. A court in Illinois that has issued a QILDRO Calculation Court Order shall retain jurisdiction of all issues relating to the modification of the QILDRO Calculation Court Order as indicated in Section 5 of the QILDRO Calculation Court Order and in accordance with Illinois law.
    (2) The Administrative Review Law and the rules adopted pursuant thereto shall govern and apply to all proceedings for judicial review of final administrative decisions of the board of trustees of the retirement system arising under this Section.
     The term "administrative decision" is defined as in Section 3-101 of the Code of Civil Procedure. The venue for review under the Administrative Review Law shall be the same as is provided by law for judicial review of other administrative decisions of the retirement system.
    (p) (1) Each retirement system may adopt any procedures or rules that it deems necessary or useful for the implementation of this Section.
    (2) Each retirement system may by rule modify the model QILDRO form provided in subsection (n), except that no retirement system may change that form in a way that limits the choices provided to the alternate payee in subsections (n) or (n-5). Each retirement system may by rule require that additional information be included in QILDROs presented to the system, as may be necessary to meet the needs of the retirement system.
    (3) Each retirement system shall define its blank model QILDRO form and blank model QILDRO Calculation Court Order form as an original of the forms or a paper copy of the forms. Each retirement system shall, whenever possible, make the forms available on the internet in non-modifiable computer format (for example, Adobe Portable Document Format files) for printing purposes.
    (4) If a retirement system in good faith implements an order under this Section that follows substantially the same form as the model order and the retirement system later discovers that the implemented order was not absolutely identical to the retirement system's model order, the retirement system's implementation shall not be a violation of this Section and the retirement system shall have no responsibility to compensate the member or the alternate payee for moneys that would have been paid or not paid had the order been identical to the model order.
(Source: P.A. 93-347, eff. 7-24-03; 94-657, eff. 7-1-06.)

40 ILCS 5/1-120

    (40 ILCS 5/1-120)
    Sec. 1-120. Payment to trust.
    (a) If a person is a minor or has been determined by a court to be under a legal disability, any benefits payable to that person under this Code may be paid to the trustee of a trust created for the sole benefit of that person while the person is living, if the trustee of the trust has advised the board of trustees of the pension fund or retirement system in writing that the benefits will be held or used for the sole benefit of that person. The pension fund or retirement system shall not be required to determine the validity of the trust or of any of the terms of the trust. The representation of the trustee that the trust meets the requirements of this Section shall be conclusive as to the pension fund or retirement system. Payment of benefits to the trust shall be an absolute discharge of the pension fund or retirement system's liability with respect to the amounts so paid.
    (b) For purposes of this Section, "minor" means an unmarried person under the age of 18.
    (c) This Section is not a limitation on any other power to pay benefits to or on behalf of a minor or person under legal disability that is granted under this Code or other applicable law.
(Source: P.A. 91-887, eff. 7-6-00.)

40 ILCS 5/1-122

    (40 ILCS 5/1-122)
    Sec. 1-122. Service with the Legislative Ethics Commission or Office of the Legislative Inspector General. Notwithstanding any provision in this Code to the contrary, if a person serves as a part-time employee in any of the following positions: Legislative Inspector General, Special Legislative Inspector General, employee of the Office of the Legislative Inspector General, Executive Director of the Legislative Ethics Commission, or staff of the Legislative Ethics Commission, then (A) no retirement annuity or other benefit of that person under this Code is subject to forfeiture, diminishment, suspension, or other impairment solely by virtue of that service and (B) that person does not participate in any pension fund or retirement system under this Code with respect to that service, unless that person (i) is qualified to so participate and (ii) affirmatively elects to so participate. This Section applies without regard to whether the person is in active service under the applicable Article of this Code on or after the effective date of this amendatory Act of the 93rd General Assembly. In this Section, a "part-time employee" is a person who is not required to work at least 35 hours per week.
(Source: P.A. 93-685, eff. 7-8-04.)

40 ILCS 5/1-123

    (40 ILCS 5/1-123)
    Sec. 1-123. Service as legal counsel. Notwithstanding any provision in this Code to the contrary, if a person is a participant under Article 18 and files a written election by July 1, 2005 with the Judges Retirement System of Illinois, then that person may serve either as legal counsel in the Office of the Governor or as Chief Deputy Attorney General and (A) no retirement annuity or other benefit of that person under Article 18 is subject to forfeiture, diminishment, suspension, or other impairment solely by virtue of that service and (B) that person does not participate in any pension fund or retirement system under this Code with respect to that service. This Section applies without regard to whether the person is in active service under Article 18 of this Code on or after the effective date of this amendatory Act of the 93rd General Assembly.
(Source: P.A. 93-1069, eff. 1-15-05.)

40 ILCS 5/1-125

    (40 ILCS 5/1-125)
    Sec. 1-125. Prohibition on gifts.
    (a) For the purposes of this Section:
    "Gift" means a gift as defined in Section 1-5 of the State Officials and Employees Ethics Act.
    "Prohibited source" means a person or entity who:
        (i) is seeking official action (A) by the board or
    
(B) by a board member;
        (ii) does business or seeks to do business (A) with
    
the board or (B) with a board member;
        (iii) has interests that may be substantially
    
affected by the performance or non-performance of the official duties of the board member; or
        (iv) is registered or required to be registered with
    
the Secretary of State under the Lobbyist Registration Act, except that an entity not otherwise a prohibited source does not become a prohibited source merely because a registered lobbyist is one of its members or serves on its board of directors.
    (b) No trustee or employee of a retirement system, pension fund, or investment board created under this Code shall intentionally solicit or accept any gift from any prohibited source as prescribed in Article 10 of the State Officials and Employees Ethics Act. The exceptions contained in Section 10-15 of that Act, other than paragraphs (4) and (5) of that Section shall apply to trustees and employees of a retirement system, pension fund, or investment board created under this Code. Solicitation or acceptance of educational materials, however, is not prohibited. For the purposes of this Section, references to "State employee" and "employee" in Article 10 of the State Officials and Employees Ethics Act shall include a trustee or employee of a retirement system, pension fund, or investment board created under this Code.
    (c) A municipality may adopt or maintain policies or ordinances that are more restrictive than those set forth in this Section and may continue to follow any existing policies or ordinances that are more restrictive or are in addition to those set forth in this Section.
    (d) To the extent that the provisions of this Section conflict with the provisions of the State Officials and Employees Ethics Act, the provisions of this Section control.
    (e) Violation of this Section is a Class A misdemeanor.
(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)

40 ILCS 5/1-130

    (40 ILCS 5/1-130)
    Sec. 1-130. No monetary gain on investments. No member or employee of the board of trustees of any retirement system, pension fund, or investment board created under this Code nor any spouse of such member or employee shall knowingly have any direct interest in the income, gains, or profits of any investments made on behalf of a retirement system, pension fund, or investment board created under this Code for which such person is a member or employee, nor receive any pay or emolument for services in connection with any investment. No member or employee of the board of trustees of any retirement system, pension fund, or investment board created under this Code shall become an endorser or surety, or in any manner an obligor for money loaned or borrowed from any retirement system or pension fund created under this Code or the Illinois State Board of Investment. For the purposes of this Section, an annuity otherwise provided in accordance with this Code or any income, gains, or profits related to any non-controlling interest in any public securities, mutual fund, or other passive investment is not considered monetary gain on investments.
    Violation of this Section is a Class 3 felony.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-135

    (40 ILCS 5/1-135)
    Sec. 1-135. Fraud. Any person who knowingly makes any false statement or falsifies or permits to be falsified any record of a retirement system or pension fund created under this Code or the Illinois State Board of Investment in an attempt to defraud the retirement system or pension fund created under this Code or the Illinois State Board of Investment is guilty of a Class 3 felony. Any reasonable suspicion by any appointed or elected commissioner, trustee, director, or board member of a retirement system or pension fund created under this Code or the State Board of Investment of a false statement or falsified record being submitted or permitted by a person under this Code shall be immediately referred to the board of trustees of the applicable retirement system or pension fund created under this Code, the State Board of Investment, or the State's Attorney of the jurisdiction where the alleged fraudulent activity occurred. The board of trustees of a retirement system or pension fund created under this Code or the State Board of Investment shall immediately notify the State's Attorney of the jurisdiction where any alleged fraudulent activity occurred for investigation. For the purposes of this Section, "reasonable suspicion" means a belief, based upon specific and articulable facts, taken together with rational inferences from those facts, that would lead a reasonable person to believe that fraud has been, or will be, committed. A reasonable suspicion is more than a non-particularized suspicion. A mere inconsistency, standing alone, does not give rise to a reasonable suspicion.
(Source: P.A. 96-6, eff. 4-3-09; 97-651, eff. 1-5-12.)

40 ILCS 5/1-140

    (40 ILCS 5/1-140)
    Sec. 1-140. Identification of deceased annuitants. Every pension fund or retirement system under this Code, except for a pension fund established under Article 3 or 4 of this Code, shall develop and implement, by no later than June 30, 2017, a process to identify annuitants who are deceased. The process shall require the pension fund or retirement system to check for any deceased annuitants at least once per month and shall include the use of any commonly used methods to identify persons who are deceased, which include, but are not limited to, the use of a third party entity that specializes in the identification of deceased persons, the use of data provided by the Social Security Administration, the use of data provided by the Department of Public Health's Office of Vital Records, or the use of any other method that is commonly used by other states to identify deceased persons.
(Source: P.A. 99-683, eff. 7-29-16.)

40 ILCS 5/1-145

    (40 ILCS 5/1-145)
    Sec. 1-145. Contingent and placement fees prohibited. No person or entity shall retain a person or entity to attempt to influence the outcome of an investment decision of or the procurement of investment advice or services of a retirement system, pension fund, or investment board of this Code for compensation, contingent in whole or in part upon the decision or procurement. Any person who violates this Section is guilty of a business offense and shall be fined not more than $10,000. In addition, any person convicted of a violation of this Section is prohibited for a period of 3 years from conducting such activities.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-150

    (40 ILCS 5/1-150)
    Sec. 1-150. Approval of travel or educational mission. The expenses for travel or educational missions of a board member of a retirement system, pension fund, or investment board created under this Code, except those whose investments are restricted by Section 1-113.2 of this Code, must be approved by a majority of the board prior to the travel or educational mission.
(Source: P.A. 96-6, eff. 4-3-09.)

40 ILCS 5/1-160

    (40 ILCS 5/1-160)
    Sec. 1-160. Provisions applicable to new hires.
    (a) The provisions of this Section apply to a person who, on or after January 1, 2011, first becomes a member or a participant under any reciprocal retirement system or pension fund established under this Code, other than a retirement system or pension fund established under Article 2, 3, 4, 5, 6, 15 or 18 of this Code, notwithstanding any other provision of this Code to the contrary, but do not apply to any self-managed plan established under this Code, to any person with respect to service as a sheriff's law enforcement employee under Article 7, or to any participant of the retirement plan established under Section 22-101. Notwithstanding anything to the contrary in this Section, for purposes of this Section, a person who participated in a retirement system under Article 15 prior to January 1, 2011 shall be deemed a person who first became a member or participant prior to January 1, 2011 under any retirement system or pension fund subject to this Section. The changes made to this Section by Public Act 98-596 are a clarification of existing law and are intended to be retroactive to January 1, 2011 (the effective date of Public Act 96-889), notwithstanding the provisions of Section 1-103.1 of this Code.
    This Section does not apply to a person who first becomes a member or participant under Article 14 on or after the implementation date of the plan created under Section 1-161 for that Article, unless that person elects under subsection (b) of Section 1-161 to instead receive the benefits provided under this Section and the applicable provisions of that Article.
    This Section does not apply to a person who first becomes a member or participant under Article 16 on or after the implementation date of the plan created under Section 1-161 for that Article, unless that person elects under subsection (b) of Section 1-161 to instead receive the benefits provided under this Section and the applicable provisions of that Article.
    This Section does not apply to a person who elects under subsection (c-5) of Section 1-161 to receive the benefits under Section 1-161.
    This Section does not apply to a person who first becomes a member or participant of an affected pension fund on or after 6 months after the resolution or ordinance date, as defined in Section 1-162, unless that person elects under subsection (c) of Section 1-162 to receive the benefits provided under this Section and the applicable provisions of the Article under which he or she is a member or participant.
    (b) "Final average salary" means the average monthly (or annual) salary obtained by dividing the total salary or earnings calculated under the Article applicable to the member or participant during the 96 consecutive months (or 8 consecutive years) of service within the last 120 months (or 10 years) of service in which the total salary or earnings calculated under the applicable Article was the highest by the number of months (or years) of service in that period. For the purposes of a person who first becomes a member or participant of any retirement system or pension fund to which this Section applies on or after January 1, 2011, in this Code, "final average salary" shall be substituted for the following:
        (1) In Article 7 (except for service as sheriff's law
    
enforcement employees), "final rate of earnings".
        (2) In Articles 8, 9, 10, 11, and 12, "highest
    
average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal".
        (3) In Article 13, "average final salary".
        (4) In Article 14, "final average compensation".
        (5) In Article 17, "average salary".
        (6) In Section 22-207, "wages or salary received by
    
him at the date of retirement or discharge".
    (b-5) Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual earnings, salary, or wages (based on the plan year) of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.
    For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.
    (c) A member or participant is entitled to a retirement annuity upon written application if he or she has attained age 67 (beginning January 1, 2015, age 65 with respect to service under Article 12 of this Code that is subject to this Section) and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article.
    A member or participant who has attained age 62 (beginning January 1, 2015, age 60 with respect to service under Article 12 of this Code that is subject to this Section) and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article may elect to receive the lower retirement annuity provided in subsection (d) of this Section.
    (c-5) A person who first becomes a member or a participant under Article 8 or Article 11 of this Code on or after the effective date of this amendatory Act of the 100th General Assembly, notwithstanding any other provision of this Code to the contrary, is entitled to a retirement annuity upon written application if he or she has attained age 65 and has at least 10 years of service credit under Article 8 or Article 11 of this Code and is otherwise eligible under the requirements of Article 8 or Article 11 of this Code, whichever is applicable.
    (d) The retirement annuity of a member or participant who is retiring after attaining age 62 (beginning January 1, 2015, age 60 with respect to service under Article 12 of this Code that is subject to this Section) with at least 10 years of service credit shall be reduced by one-half of 1% for each full month that the member's age is under age 67 (beginning January 1, 2015, age 65 with respect to service under Article 12 of this Code that is subject to this Section).
    (d-5) The retirement annuity of a person who first becomes a member or a participant under Article 8 or Article 11 of this Code on or after the effective date of this amendatory Act of the 100th General Assembly who is retiring at age 60 with at least 10 years of service credit under Article 8 or Article 11 shall be reduced by one-half of 1% for each full month that the member's age is under age 65.
    (d-10) Each person who first became a member or participant under Article 8 or Article 11 of this Code on or after January 1, 2011 and prior to the effective date of this amendatory Act of the 100th General Assembly shall make an irrevocable election either:
        (i) to be eligible for the reduced retirement age
    
provided in subsections (c-5) and (d-5) of this Section, the eligibility for which is conditioned upon the member or participant agreeing to the increases in employee contributions for age and service annuities provided in subsection (a-5) of Section 8-174 of this Code (for service under Article 8) or subsection (a-5) of Section 11-170 of this Code (for service under Article 11); or
        (ii) to not agree to item (i) of this subsection
    
(d-10), in which case the member or participant shall continue to be subject to the retirement age provisions in subsections (c) and (d) of this Section and the employee contributions for age and service annuity as provided in subsection (a) of Section 8-174 of this Code (for service under Article 8) or subsection (a) of Section 11-170 of this Code (for service under Article 11).
    The election provided for in this subsection shall be made between October 1, 2017 and November 15, 2017. A person subject to this subsection who makes the required election shall remain bound by that election. A person subject to this subsection who fails for any reason to make the required election within the time specified in this subsection shall be deemed to have made the election under item (ii).
    (e) Any retirement annuity or supplemental annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 (beginning January 1, 2015, age 65 with respect to service under Article 12 of this Code that is subject to this Section and beginning on the effective date of this amendatory Act of the 100th General Assembly, age 65 with respect to persons who: (i) first became members or participants under Article 8 or Article 11 of this Code on or after the effective date of this amendatory Act of the 100th General Assembly; or (ii) first became members or participants under Article 8 or Article 11 of this Code on or after January 1, 2011 and before the effective date of this amendatory Act of the 100th General Assembly and made the election under item (i) of subsection (d-10) of this Section) or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.
    For the purposes of Section 1-103.1 of this Code, the changes made to this Section by this amendatory Act of the 100th General Assembly are applicable without regard to whether the employee was in active service on or after the effective date of this amendatory Act of the 100th General Assembly.
    (f) The initial survivor's or widow's annuity of an otherwise eligible survivor or widow of a retired member or participant who first became a member or participant on or after January 1, 2011 shall be in the amount of 66 2/3% of the retired member's or participant's retirement annuity at the date of death. In the case of the death of a member or participant who has not retired and who first became a member or participant on or after January 1, 2011, eligibility for a survivor's or widow's annuity shall be determined by the applicable Article of this Code. The initial benefit shall be 66 2/3% of the earned annuity without a reduction due to age. A child's annuity of an otherwise eligible child shall be in the amount prescribed under each Article if applicable. Any survivor's or widow's annuity shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity or (2) in other cases, on each January 1 occurring after the first anniversary of the commencement of the annuity. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.
    (g) The benefits in Section 14-110 apply only if the person is a State policeman, a fire fighter in the fire protection service of a department, or a security employee of the Department of Corrections or the Department of Juvenile Justice, as those terms are defined in subsection (b) of Section 14-110. A person who meets the requirements of this Section is entitled to an annuity calculated under the provisions of Section 14-110, in lieu of the regular or minimum retirement annuity, only if the person has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 60, regardless of whether the attainment of age 60 occurs while the person is still in service.
    (h) If a person who first becomes a member or a participant of a retirement system or pension fund subject to this Section on or after January 1, 2011 is receiving a retirement annuity or retirement pension under that system or fund and becomes a member or participant under any other system or fund created by this Code and is employed on a full-time basis, except for those members or participants exempted from the provisions of this Section under subsection (a) of this Section, then the person's retirement annuity or retirement pension under that system or fund shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity or retirement pension payments shall resume and be recalculated if recalculation is provided for under the applicable Article of this Code.
    If a person who first becomes a member of a retirement system or pension fund subject to this Section on or after January 1, 2012 and is receiving a retirement annuity or retirement pension under that system or fund and accepts on a contractual basis a position to provide services to a governmental entity from which he or she has retired, then that person's annuity or retirement pension earned as an active employee of the employer shall be suspended during that contractual service. A person receiving an annuity or retirement pension under this Code shall notify the pension fund or retirement system from which he or she is receiving an annuity or retirement pension, as well as his or her contractual employer, of his or her retirement status before accepting contractual employment. A person who fails to submit such notification shall be guilty of a Class A misdemeanor and required to pay a fine of $1,000. Upon termination of that contractual employment, the person's retirement annuity or retirement pension payments shall resume and, if appropriate, be recalculated under the applicable provisions of this Code.
    (i) (Blank).
    (j) In the case of a conflict between the provisions of this Section and any other provision of this Code, the provisions of this Section shall control.
(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17.)

40 ILCS 5/1-161

    (40 ILCS 5/1-161)
    Sec. 1-161. Optional benefits for certain Tier 2 members under Articles 14, 15, and 16.
    (a) Notwithstanding any other provision of this Code to the contrary, the provisions of this Section apply to a person who first becomes a member or a participant under Article 14, 15, or 16 on or after the implementation date under this Section for the applicable Article and who does not make the election under subsection (b) or (c), whichever applies. The provisions of this Section also apply to a person who makes the election under subsection (c-5). However, the provisions of this Section do not apply to any participant in a self-managed plan, nor to a covered employee under Article 14.
    As used in this Section and Section 1-160, the "implementation date" under this Section means the earliest date upon which the board of a retirement system authorizes members of that system to begin participating in accordance with this Section, as determined by the board of that retirement system. Each of the retirement systems subject to this Section shall endeavor to make such participation available as soon as possible after the effective date of this Section and shall establish an implementation date by board resolution.
    (b) In lieu of the benefits provided under this Section, a member or participant, except for a participant under Article 15, may irrevocably elect the benefits under Section 1-160 and the benefits otherwise applicable to that member or participant. The election must be made within 30 days after becoming a member or participant. Each retirement system shall establish procedures for making this election.
    (c) A participant under Article 15 may irrevocably elect the benefits otherwise provided to a Tier 2 member under Article 15. The election must be made within 30 days after becoming a member. The retirement system under Article 15 shall establish procedures for making this election.
    (c-5) A non-covered participant under Article 14 to whom Section 1-160 applies, a Tier 2 member under Article 15, or a participant under Article 16 to whom Section 1-160 applies may irrevocably elect to receive the benefits under this Section in lieu of the benefits under Section 1-160 or the benefits otherwise available to a Tier 2 member under Article 15, whichever is applicable. Each retirement System shall establish procedures for making this election.
    (d) "Final average salary" means the average monthly (or annual) salary obtained by dividing the total salary or earnings calculated under the Article applicable to the member or participant during the last 120 months (or 10 years) of service in which the total salary or earnings calculated under the applicable Article was the highest by the number of months (or years) of service in that period. For the purposes of a person to whom this Section applies, in this Code, "final average salary" shall be substituted for "final average compensation" in Article 14.
    (e) Beginning on the implementation date, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual earnings, salary, compensation, or wages (based on the plan year) of a member or participant to whom this Section applies shall not at any time exceed the federal Social Security Wage Base then in effect.
    (f) A member or participant is entitled to a retirement annuity upon written application if he or she has attained the normal retirement age determined by the Social Security Administration for that member or participant's year of birth, but no earlier than 67 years of age, and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article.
    (g) The amount of the retirement annuity to which a member or participant is entitled shall be computed by multiplying 1.25% for each year of service credit by his or her final average salary.
    (h) Any retirement annuity or supplemental annuity shall be subject to annual increases on the first anniversary of the annuity start date. Each annual increase shall be one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-w for the 12 months ending with the September preceding each November 1 of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-w for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.
    For the purposes of this Section, "consumer price index-w" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by Urban Wage Earners and Clerical Workers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.
    (i) The initial survivor's or widow's annuity of an otherwise eligible survivor or widow of a retired member or participant to whom this Section applies shall be in the amount of 66 2/3% of the retired member's or participant's retirement annuity at the date of death. In the case of the death of a member or participant who has not retired and to whom this Section applies, eligibility for a survivor's or widow's annuity shall be determined by the applicable Article of this Code. The benefit shall be 66 2/3% of the earned annuity without a reduction due to age. A child's annuity of an otherwise eligible child shall be in the amount prescribed under each Article if applicable.
    (j) In lieu of any other employee contributions, except for the contribution to the defined contribution plan under subsection (k) of this Section, each employee shall contribute 6.2% of his her or salary to the retirement system. However, the employee contribution under this subsection shall not exceed the amount of the total normal cost of the benefits for all members making contributions under this Section (except for the defined contribution plan under subsection (k) of this Section), expressed as a percentage of payroll and certified on or before January 15 of each year by the board of trustees of the retirement system. If the board of trustees of the retirement system certifies that the 6.2% employee contribution rate exceeds the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), then on or before December 1 of that year, the board of trustees shall certify the amount of the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), expressed as a percentage of payroll, to the State Actuary and the Commission on Government Forecasting and Accountability, and the employee contribution under this subsection shall be reduced to that amount beginning July 1 of that year. Thereafter, if the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), expressed as a percentage of payroll and certified on or before January 1 of each year by the board of trustees of the retirement system, exceeds 6.2% of salary, then on or before January 15 of that year, the board of trustees shall certify the normal cost to the State Actuary and the Commission on Government Forecasting and Accountability, and the employee contributions shall revert back to 6.2% of salary beginning January 1 of the following year.
    (k) In accordance with each retirement system's implementation date, each retirement system under Article 14, 15, or 16 shall prepare and implement a defined contribution plan for members or participants who are subject to this Section. The defined contribution plan developed under this subsection shall be a plan that aggregates employer and employee contributions in individual participant accounts which, after meeting any other requirements, are used for payouts after retirement in accordance with this subsection and any other applicable laws.
        (1) Each member or participant shall contribute a
    
minimum of 4% of his or her salary to the defined contribution plan.
        (2) For each participant in the defined contribution
    
plan who has been employed with the same employer for at least one year, employer contributions shall be paid into that participant's accounts at a rate expressed as a percentage of salary. This rate may be set for individual employees, but shall be no higher than 6% of salary and shall be no lower than 2% of salary.
        (3) Employer contributions shall vest when those
    
contributions are paid into a member's or participant's account.
        (4) The defined contribution plan shall provide a
    
variety of options for investments. These options shall include investments handled by the Illinois State Board of Investment as well as private sector investment options.
        (5) The defined contribution plan shall provide a
    
variety of options for payouts to retirees and their survivors.
        (6) To the extent authorized under federal law and as
    
authorized by the retirement system, the defined contribution plan shall allow former participants in the plan to transfer or roll over employee and employer contributions, and the earnings thereon, into other qualified retirement plans.
        (7) Each retirement system shall reduce the employee
    
contributions credited to the member's defined contribution plan account by an amount determined by that retirement system to cover the cost of offering the benefits under this subsection and any applicable administrative fees.
        (8) No person shall begin participating in the
    
defined contribution plan until it has attained qualified plan status and received all necessary approvals from the U.S. Internal Revenue Service.
    (l) In the case of a conflict between the provisions of this Section and any other provision of this Code, the provisions of this Section shall control.
(Source: P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/1-162

    (40 ILCS 5/1-162)
    Sec. 1-162. Optional benefits for certain Tier 2 members of pension funds under Articles 8, 9, 10, 11, 12, and 17.
    (a) As used in this Section:
    "Affected pension fund" means a pension fund established under Article 8, 9, 10, 11, 12, or 17 that the governing body of the unit of local government has designated as an affected pension fund by adoption of a resolution or ordinance.
    "Resolution or ordinance date" means the date on which the governing body of the unit of local government designates a pension fund under Article 8, 9, 10, 11, 12, or 17 as an affected pension fund by adoption of a resolution or ordinance or July 1, 2018, whichever is later.
    (b) Notwithstanding any other provision of this Code to the contrary, the provisions of this Section apply to a person who first becomes a member or a participant in an affected pension fund on or after 6 months after the resolution or ordinance date and who does not make the election under subsection (c).
    (c) In lieu of the benefits provided under this Section, a member or participant may irrevocably elect the benefits under Section 1-160 and the benefits otherwise applicable to that member or participant. The election must be made within 30 days after becoming a member or participant. Each affected pension fund shall establish procedures for making this election.
    (d) "Final average salary" means the average monthly (or annual) salary obtained by dividing the total salary or earnings calculated under the Article applicable to the member or participant during the last 120 months (or 10 years) of service in which the total salary or earnings calculated under the applicable Article was the highest by the number of months (or years) of service in that period. For the purposes of a person who first becomes a member or participant of an affected pension fund on or after 6 months after the ordinance or resolution date, in this Code, "final average salary" shall be substituted for the following:
        (1) In Articles 8, 9, 10, 11, and 12, "highest
    
average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal".
        (2) In Article 17, "average salary".
    (e) Beginning 6 months after the resolution or ordinance date, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual earnings, salary, or wages (based on the plan year) of a member or participant to whom this Section applies shall not at any time exceed the federal Social Security Wage Base then in effect.
    (f) A member or participant is entitled to a retirement annuity upon written application if he or she has attained the normal retirement age determined by the Social Security Administration for that member or participant's year of birth, but no earlier than 67 years of age, and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article.
    (g) The amount of the retirement annuity to which a member or participant is entitled shall be computed by multiplying 1.25% for each year of service credit by his or her final average salary.
    (h) Any retirement annuity or supplemental annuity shall be subject to annual increases on the first anniversary of the annuity start date. Each annual increase shall be one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-w for the 12 months ending with the September preceding each November 1 of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-w for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.
    For the purposes of this Section, "consumer price index-w" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by Urban Wage Earners and Clerical Workers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.
    (i) The initial survivor's or widow's annuity of an otherwise eligible survivor or widow of a retired member or participant who first became a member or participant on or after 6 months after the resolution or ordinance date shall be in the amount of 66 2/3% of the retired member's or participant's retirement annuity at the date of death. In the case of the death of a member or participant who has not retired and who first became a member or participant on or after 6 months after the resolution or ordinance date, eligibility for a survivor's or widow's annuity shall be determined by the applicable Article of this Code. The benefit shall be 66 2/3% of the earned annuity without a reduction due to age. A child's annuity of an otherwise eligible child shall be in the amount prescribed under each Article if applicable.
    (j) In lieu of any other employee contributions, except for the contribution to the defined contribution plan under subsection (k) of this Section, each employee shall contribute 6.2% of his her or salary to the affected pension fund. However, the employee contribution under this subsection shall not exceed the amount of the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), expressed as a percentage of payroll and determined on or before November 1 of each year by the board of trustees of the affected pension fund. If the board of trustees of the affected pension fund determines that the 6.2% employee contribution rate exceeds the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), then on or before December 1 of that year, the board of trustees shall certify the amount of the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), expressed as a percentage of payroll, to the State Actuary and the Commission on Government Forecasting and Accountability, and the employee contribution under this subsection shall be reduced to that amount beginning January 1 of the following year. Thereafter, if the normal cost of the benefits under this Section (except for the defined contribution plan under subsection (k) of this Section), expressed as a percentage of payroll and determined on or before November 1 of each year by the board of trustees of the affected pension fund, exceeds 6.2% of salary, then on or before December 1 of that year, the board of trustees shall certify the normal cost to the State Actuary and the Commission on Government Forecasting and Accountability, and the employee contributions shall revert back to 6.2% of salary beginning January 1 of the following year.
    (k) No later than 5 months after the resolution or ordinance date, an affected pension fund shall prepare and implement a defined contribution plan for members or participants who are subject to this Section. The defined contribution plan developed under this subsection shall be a plan that aggregates employer and employee contributions in individual participant accounts which, after meeting any other requirements, are used for payouts after retirement in accordance with this subsection and any other applicable laws.
        (1) Each member or participant shall contribute a
    
minimum of 4% of his or her salary to the defined contribution plan.
        (2) For each participant in the defined contribution
    
plan who has been employed with the same employer for at least one year, employer contributions shall be paid into that participant's accounts at a rate expressed as a percentage of salary. This rate may be set for individual employees, but shall be no higher than 6% of salary and shall be no lower than 2% of salary.
        (3) Employer contributions shall vest when those
    
contributions are paid into a member's or participant's account.
        (4) The defined contribution plan shall provide a
    
variety of options for investments. These options shall include investments handled by the Illinois State Board of Investment as well as private sector investment options.
        (5) The defined contribution plan shall provide a
    
variety of options for payouts to retirees and their survivors.
        (6) To the extent authorized under federal law and as
    
authorized by the affected pension fund, the defined contribution plan shall allow former participants in the plan to transfer or roll over employee and employer contributions, and the earnings thereon, into other qualified retirement plans.
        (7) Each affected pension fund shall reduce the
    
employee contributions credited to the member's defined contribution plan account by an amount determined by that affected pension fund to cover the cost of offering the benefits under this subsection and any applicable administrative fees.
        (8) No person shall begin participating in the
    
defined contribution plan until it has attained qualified plan status and received all necessary approvals from the U.S. Internal Revenue Service.
    (l) In the case of a conflict between the provisions of this Section and any other provision of this Code, the provisions of this Section shall control.
(Source: P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/1-165

    (40 ILCS 5/1-165)
    Sec. 1-165. Commission on Government Forecasting and Accountability study. The Commission on Government Forecasting and Accountability shall conduct a study on the feasibility of:
        (1) the creation of an investment pool to supplement
    
and enhance the investment opportunities available to boards of trustees of the pension funds organized under Articles 3 and 4 of this Code; the study shall include an analysis on any cost or cost savings associated with establishing the system and transferring assets for management under the investment pool; and
        (2) enacting a contribution cost-share component
    
wherein employing municipalities and members of funds established under Articles 3 and 4 of this Code each contribute 50% of the normal cost of the defined-benefit plan.
    The Commission shall issue a report on its findings on or before December 31, 2011.
(Source: P.A. 96-1495, eff. 1-1-11.)

40 ILCS 5/1-166

    (40 ILCS 5/1-166)
    Sec. 1-166. Proportional annuity liability.
    (a) If a participant's final average salary in a participating system under the Retirement Systems Reciprocal Act, other than the General Assembly Retirement System, is used to calculate a proportional retirement annuity for that participant under the General Assembly Retirement System, if that final average salary is higher than the highest salary for annuity purposes of that person under the General Assembly Retirement System, and if the participant retires after the effective date of this Section with less than 2 years of service that has accrued in that participating system since his or her last day of active participation in the General Assembly Retirement System, then the increased cost of the proportional annuity paid by the General Assembly Retirement System that is attributable to that higher level of compensation shall be paid by the employer of the participant under that other participating system to the General Assembly Retirement System in the form of a lump sum payment determined by the General Assembly Retirement System in accordance with its annuity tables and other actuarial assumptions.
    (b) For the purposes of this Section, "final average salary in a participating system under the Retirement Systems Reciprocal Act, other than the General Assembly Retirement System," includes:
        (1) In Section 1-160 and Articles 16 and 18, "final
    
average salary".
        (2) In Articles 7 and 15, "final rate of earnings".
        (3) In Articles 8, 9, 10, 11, and 12, "highest
    
average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal".
        (4) In Article 13, "average final salary".
        (5) In Article 14, "final average compensation".
        (6) In Article 17, "average salary".
        (7) In Section 22-207, "wages or salary received by
    
him at the date of retirement or discharge".
    (c) If an employer fails to pay the amount required under this Section to the General Assembly Retirement System for more than 90 days after the payment is due, the System, after giving notice to the employer, may certify to the State Comptroller the amount of the delinquent payment and the Comptroller shall deduct the amount so certified or any part thereof from any payment of State funds to the employer and shall pay the amount so deducted to the System. If State funds from which such deductions may be made are not available, then the System may proceed against the employer to recover the amount of the delinquent payment in the appropriate circuit court.
(Source: P.A. 97-967, eff. 8-16-12.)

40 ILCS 5/Art. 1A

 
    (40 ILCS 5/Art. 1A heading)
ARTICLE 1A. REGULATION OF PUBLIC PENSION FUNDS

40 ILCS 5/1A-101

    (40 ILCS 5/1A-101)
    Sec. 1A-101. Creation of Public Pension Division. There is created in the Department of Insurance a Public Pension Division which, under the supervision and direction of the Director of Insurance, shall exercise the powers and perform the duties and functions prescribed under this Code. The Division shall consist of an administrator, a supervisor, a technical staff trained in the fundamentals of public pension fund planning, operations, administration, and investment of public pension funds, and such other personnel as may be necessary properly and effectively to discharge the functions of the Division.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-102

    (40 ILCS 5/1A-102)
    Sec. 1A-102. Definitions. As used in this Article, the following terms have the meanings ascribed to them in this Section, unless the context otherwise requires:
    "Accrued liability" means the actuarial present value of future benefit payments and appropriate administrative expenses under a plan, reduced by the actuarial present value of all future normal costs (including any participant contributions) with respect to the participants included in the actuarial valuation of the plan.
    "Actuarial present value" means the single amount, as of a given valuation date, that results from applying actuarial assumptions to an amount or series of amounts payable or receivable at various times.
    "Actuarial value of assets" means the value assigned by the actuary to the assets of a plan for the purposes of an actuarial valuation.
    "Basis point" means 1/100th of one percent.
    "Beneficiary" means a person eligible for or receiving benefits from a pension fund as provided in the Article of this Code under which the fund is established.
    "Credited projected benefit" means that portion of a participant's projected benefit based on an allocation taking into account service to date determined in accordance with the terms of the plan based on anticipated future compensation.
    "Current value" means the fair market value when available; otherwise, the fair value as determined in good faith by a trustee, assuming an orderly liquidation at the time of the determination.
    "Department" means the Department of Insurance of the State of Illinois.
    "Director" means the Director of the Department of Insurance.
    "Division" means the Public Pension Division of the Department of Insurance.
    "Governmental unit" means the State of Illinois, any instrumentality or agency thereof (except transit authorities or agencies operating within or within and without cities with a population over 3,000,000), and any political subdivision or municipal corporation that establishes and maintains a public pension fund.
    "Normal cost" means that part of the actuarial present value of all future benefit payments and appropriate administrative expenses assigned to the current year under the actuarial valuation method used by the plan (excluding any amortization of the unfunded accrued liability).
    "Participant" means a participating member or deferred pensioner or annuitant of a pension fund as provided in the Article of this Code under which the pension fund is established, or a beneficiary thereof.
    "Pension fund" means any public pension fund, annuity and benefit fund, or retirement system established under this Code.
    "Plan year" means the calendar or fiscal year on which the records of a given plan are kept.
    "Projected benefits" means benefit amounts under a plan which are expected to be paid at various future times under a particular set of actuarial assumptions, taking into account, as applicable, the effect of advancement in age and past and anticipated future compensation and service credits.
    "Supplemental annual cost" means that portion of the unfunded accrued liability assigned to the current year under one of the following bases:
        (1) interest only on the unfunded accrued liability;
        (2) the level annual amount required to amortize the
    
unfunded accrued liability over a period not exceeding 40 years;
        (3) the amount required for the current year to
    
amortize the unfunded accrued liability over a period not exceeding 40 years as a level percentage of payroll.
    "Total annual cost" means the sum of the normal cost plus the supplemental annual cost.
    "Unfunded accrued liability" means the excess of the accrued liability over the actuarial value of the assets of a plan.
    "Vested pension benefit" means an interest obtained by a participant or beneficiary in that part of an immediate or deferred benefit under a plan which arises from the participant's service and is not conditional upon the participant's continued service for an employer any of whose employees are covered under the plan, and which has not been forfeited under the terms of the plan.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-103

    (40 ILCS 5/1A-103)
    Sec. 1A-103. Rules. The Department is authorized to promulgate rules necessary for the administration and enforcement of this Code. Except as otherwise provided under this Code, these rules shall apply only to pension funds established under Article 3 or Article 4 of this Code. Rules adopted pursuant to this Section shall govern where conflict with local rules and regulations exists.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-104

    (40 ILCS 5/1A-104)
    Sec. 1A-104. Examinations and investigations.
    (a) The Division shall make periodic examinations and investigations of all pension funds established under this Code and maintained for the benefit of employees and officers of governmental units in the State of Illinois. However, in lieu of making an examination and investigation, the Division may accept and rely upon a report of audit or examination of any pension fund made by an independent certified public accountant pursuant to the provisions of the Article of this Code governing the pension fund. The acceptance of the report of audit or examination does not bar the Division from making a further audit, examination, and investigation if deemed necessary by the Division.
    The Department may implement a flexible system of examinations under which it directs resources as it deems necessary or appropriate. In consultation with the pension fund being examined, the Division may retain attorneys, independent actuaries, independent certified public accountants, and other professionals and specialists as examiners, the cost of which (except in the case of pension funds established under Article 3 or 4) shall be borne by the pension fund that is the subject of the examination.
    (b) The Division shall examine or investigate each pension fund established under Article 3 or Article 4 of this Code. The schedule of each examination shall be such that each fund shall be examined once every 3 years.
    Each examination shall include the following:
        (1) an audit of financial transactions, investment
    
policies, and procedures;
        (2) an examination of books, records, documents,
    
files, and other pertinent memoranda relating to financial, statistical, and administrative operations;
        (3) a review of policies and procedures maintained
    
for the administration and operation of the pension fund;
        (4) a determination of whether or not full effect is
    
being given to the statutory provisions governing the operation of the pension fund;
        (5) a determination of whether or not the
    
administrative policies in force are in accord with the purposes of the statutory provisions and effectively protect and preserve the rights and equities of the participants;
        (6) a determination of whether or not proper
    
financial and statistical records have been established and adequate documentary evidence is recorded and maintained in support of the several types of annuity and benefit payments being made; and
        (7) a determination of whether or not the
    
calculations made by the fund for the payment of all annuities and benefits are accurate.
    In addition, the Division may conduct investigations, which shall be identified as such and which may include one or more of the items listed in this subsection.
    A copy of the report of examination or investigation as prepared by the Division shall be submitted to the secretary of the board of trustees of the pension fund examined or investigated and to the chief executive officer of the municipality. The Director, upon request, shall grant a hearing to the officers or trustees of the pension fund or their duly appointed representatives, upon any facts contained in the report of examination. The hearing shall be conducted before filing the report or making public any information contained in the report. The Director may withhold the report from public inspection for up to 60 days following the hearing.
(Source: P.A. 95-950, eff. 8-29-08.)

40 ILCS 5/1A-105

    (40 ILCS 5/1A-105)
    Sec. 1A-105. Examination and subpoena of records and witnesses. The Director may administer oaths and affirmations and summon and compel the attendance before him or her and examine under oath any officer, trustee, agent, actuary, attorney, or employee connected either directly or indirectly with any pension fund, or any other person having information regarding the condition, affairs, management, administration, or methods of conducting a pension fund. The Director may require any person having possession of any record, book, paper, contract, or other document pertaining to a pension fund to surrender it or to otherwise afford the Director access to it and for failure so to do the Director may attach the same.
    Should any person fail to obey the summons of the Director or refuse to surrender to him or her or afford him or her access to any such record, book, paper, contract, or other document, the Director may apply to the circuit court of the county in which the principal office of the pension fund involved is located, and the court, if it finds that the Director has not exceeded his or her authority in the matter, may, by order duly entered, require the attendance of witnesses and the production of all relevant documents required by the Director in carrying out his or her responsibilities under this Code. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt of court.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-106

    (40 ILCS 5/1A-106)
    Sec. 1A-106. Advisory services. The Division shall render advisory services to the pension funds on all matters pertaining to their operations and shall recommend any corrective or clarifying legislation that it may deem necessary. These recommendations shall be made in the report of examination of the particular pension fund and in the biennial report to the General Assembly under Section 1A-108. The recommendations may embrace all substantive legislative and administrative policies, including, but not limited to, matters dealing with the payment of annuities and benefits, the investment of funds, and the condition of the books, records, and accounts of the pension fund.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-107

    (40 ILCS 5/1A-107)
    Sec. 1A-107. Automation of services. The Division shall automate its operations, services, and communications to the fullest practical extent. This automation shall include, but need not be limited to, the acquisition, use, and maintenance of electronic data processing technology to (i) automate Division operations as necessary to carry out its duties and responsibilities under this Code, (ii) provide by FY 2000 electronic exchange of information between the Division and pension funds subject to this Code, (iii) provide to pension funds and the general public and receive from pension funds and the general public data on computer processible media, and (iv) control access to information when necessary to protect the confidentiality of persons identified in the information.
    The Division shall ensure that this automation is designed so as to protect any confidential data it may receive from a pension fund. This Section does not authorize the Division or the Department of Insurance to disclose any information identifying specific pension fund participants or relating to an identifiable pension fund participant.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-108

    (40 ILCS 5/1A-108)
    Sec. 1A-108. Report to the Governor and General Assembly. On or before October 1 following the convening of a regular session of the General Assembly, the Division shall submit a report to the Governor and General Assembly setting forth the latest financial statements on the pension funds operating in the State of Illinois, a summary of the current provisions underlying these funds, and a report on any changes that have occurred in these provisions since the date of the last such report submitted by the Division.
    The report shall also include the results of examinations made by the Division of any pension fund and any specific recommendations for legislative and administrative correction that the Division deems necessary. The report may embody general recommendations concerning desirable changes in any existing pension, annuity, or retirement laws designed to standardize and establish uniformity in their basic provisions and to bring about an improvement in the financial condition of the pension funds. The purposes of these recommendations and the objectives sought shall be clearly expressed in the report.
    The requirement for reporting to the General Assembly shall be satisfied by filing copies of the report with the Speaker, the Minority Leader, and the Clerk of the House of Representatives, the President, the Minority Leader, and the Secretary of the Senate, and the Legislative Research Unit, as required by Section 3.1 of the General Assembly Organization Act, and filing additional copies with the State Government Report Distribution Center for the General Assembly as required under paragraph (t) of Section 7 of the State Library Act.
    Upon request, the Division shall distribute additional copies of the report at no charge to the secretary of each pension fund established under Article 3 or 4, the treasurer or fiscal officer of each municipality with an established police or firefighter pension fund, the executive director of every other pension fund established under this Code, and to public libraries, State agencies, and police, firefighter, and municipal organizations active in the public pension area.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-108.5

    (40 ILCS 5/1A-108.5)
    Sec. 1A-108.5. Economic opportunity investments.
    (a) For the purposes of this Section:
    "Economic opportunity investment" means a qualified investment, managed passively or actively by the pension fund, that promotes economic development within the State of Illinois by providing financially prudent investment opportunities in or through the use of (a) Illinois businesses or (b) Illinois-based projects that promote the economy of the State or a region of the State, including without limitation promotion of venture capital programs, coal and other natural resource development, tourism development, infrastructure development, real estate development, and job development within the State of Illinois, while producing a competitive rate of return commensurate with the risk of investment.
    "Illinois business" means a business, including an investment adviser, that is headquartered in Illinois.
    "Illinois-based project" means an individual project of a business, including the provision of products and investment and other services to the pension fund, that will result in the conduct of business within the State, the employment of individuals within the State, or the acquisition of real property located within the State.
    (b) It is the public policy of the State of Illinois to encourage the pension funds, and any State entity investing funds on behalf of pension funds, to promote the economy of Illinois through the use of economic opportunity investments to the greatest extent feasible within the bounds of financial and fiduciary prudence.
    (c) Each pension fund, except pension funds created under Articles 3 and 4 of this Code, shall submit a report to the Governor and the General Assembly by September 1 of each year, beginning in 2009, that identifies the economic opportunity investments made by the fund, the primary location of the business or project, the percentage of the fund's assets in economic opportunity investments, and the actions that the fund has undertaken to increase the use of economic opportunity investments.
    (d) Pension funds created under Articles 2, 14, 15, 16, and 18 of this Act, and any State agency investing funds on behalf of those pension funds, must make reasonable efforts to invest in economic opportunity investments.
    (e) In making economic opportunity investments, trustees and fiduciaries must comply with the relevant requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, and 1-111 of this Code. Economic opportunity investments that otherwise comply with this Code shall not be deemed imprudent solely because they are investments in an Illinois business or Illinois-based project.
(Source: P.A. 96-753, eff. 8-25-09.)

40 ILCS 5/1A-109

    (40 ILCS 5/1A-109)
    Sec. 1A-109. Annual statements by pension funds. Each pension fund shall furnish to the Division an annual statement in a format prepared by the Division. The Division shall design the form and prescribe the content of the annual statement and, at least 60 days prior to the filing date, shall furnish the form to each pension fund for completion. The annual statement shall be prepared by each fund, properly certified by its officers, and submitted to the Division within 6 months following the close of the fiscal year of the pension fund.
    The annual statement shall include, but need not be limited to, the following:
        (1) a financial balance sheet as of the close of the
    
fiscal year;
        (2) a statement of income and expenditures;
        (3) an actuarial balance sheet;
        (4) statistical data reflecting age, service, and
    
salary characteristics concerning all participants;
        (5) special facts concerning disability or other
    
claims;
        (6) details on investment transactions that occurred
    
during the fiscal year covered by the report;
        (7) details on administrative expenses; and
        (8) such other supporting data and schedules as in
    
the judgement of the Division may be necessary for a proper appraisal of the financial condition of the pension fund and the results of its operations. The annual statement shall also specify the actuarial and interest tables used in the operation of the pension fund.
    A pension fund that fails to file its annual statement within the time prescribed under this Section is subject to the penalty provisions of Section 1A-113.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-110

    (40 ILCS 5/1A-110)
    Sec. 1A-110. Actuarial statements by pension funds established under Articles other than 3 or 4.
    (a) Each pension fund established under an Article of this Code other than Article 3 or 4 shall include as part of its annual statement a complete actuarial statement applicable to the plan year.
    The actuarial statement shall be filed with the Division within 9 months after the close of the fiscal year of the pension fund. Any pension fund that fails to file within that time is subject to the penalty provisions of Section 1A-113.
    The board of trustees of each pension fund subject to this Section, on behalf of all its participants, shall engage an enrolled actuary who shall be responsible for the preparation of the materials comprising the actuarial statement. The enrolled actuary shall utilize such assumptions and methods as are necessary for the contents of the matters reported in the actuarial statement to be reasonably related to the experience of the plan and to reasonable expectations, and to represent in the aggregate the actuary's best estimate of anticipated experience under the plan.
    The actuarial statement shall include a description of the actuarial assumptions and methods used to determine the actuarial values in the statement and shall disclose the impact of significant changes in the actuarial assumptions and methods, plan provisions, and other pertinent factors on the actuarial position of the plan.
    The actuarial statement shall include a statement by the enrolled actuary that to the best of his or her knowledge the actuarial statement is complete and accurate and has been prepared in accordance with generally accepted actuarial principles and practice.
    For the purposes of this Section, "enrolled actuary" means an actuary who (1) is a member of the Society of Actuaries or the American Academy of Actuaries and (2) either is enrolled under Subtitle C of Title III of the Employee Retirement Income Security Act of 1974 or was engaged in providing actuarial services to a public retirement plan in Illinois on July 1, 1983.
    (b) The actuarial statement referred to in subsection (a) shall include all of the following:
        (1) The dates of the plan year and the date of the
    
actuarial valuation applicable to the plan year for which the actuarial statement is filed.
        (2) The amount of (i) the contributions made by the
    
participants, and (ii) all other contributions, including those made by the employer or employers.
        (3) The total estimated amount of the covered
    
compensation with respect to active participants for the plan year for which the statement is filed.
        (4) The number of (i) active participants, (ii)
    
terminated participants currently eligible for deferred vested pension benefits or the return of contributions made by those participants, and (iii) all other participants and beneficiaries included in the actuarial valuation.
        (5) The following values as of the date of the
    
actuarial valuation applicable to the plan year for which the statement is filed:
            (i) The current value of assets accumulated in
        
the plan.
            (ii) The unfunded accrued liability. The major
        
factors that have resulted in the change in the unfunded accrued liability from the previous year shall be identified. Effects that are individually significant shall be separately identified. As a minimum, the effect of the following shall be shown: plan amendments; changes in actuarial assumptions; experience less (or more) favorable than that assumed; and contributions less (or more) than the normal cost plus interest on the unfunded accrued liability.
            (iii) The amount of accumulated contributions for
        
active participants (including interest, if any).
            (iv) The actuarial present value of credited
        
projected benefits for vested participants currently receiving benefits, other vested participants, and non-vested participants.
        (6) The actuarial value of assets.
        (7) Any other information that is necessary to fully
    
and fairly disclose the actuarial position of the plan and any other information the enrolled actuary may present.
        (8) Any other information regarding the plan that the
    
Division may by rule request.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-111

    (40 ILCS 5/1A-111)
    Sec. 1A-111. Actuarial statements by pension funds established under Article 3 or 4.
    (a) Each pension fund established under Article 3 or 4 of this Code shall include as part of its annual statement a complete actuarial statement applicable to the plan year.
    If the actuarial statement is prepared by a person other than the Department, it shall be filed with the Division within 9 months after the close of the fiscal year of the pension fund. Any pension fund that fails to file within that time shall be subject to the penalty provisions of Section 1A-113. The statement shall be prepared by or under the supervision of a qualified actuary, signed by the qualified actuary, and contain such information as the Division may by rule require.
    (b) For the purposes of this Section, "qualified actuary" means (i) a member of the American Academy of Actuaries, or (ii) an individual who has demonstrated to the satisfaction of the Director that he or she has the educational background necessary for the practice of actuarial science and has at least 7 years of actuarial experience.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-112

    (40 ILCS 5/1A-112)
    Sec. 1A-112. Fees.
    (a) Every pension fund that is required to file an annual statement under Section 1A-109 shall pay to the Department an annual compliance fee. In the case of a pension fund under Article 3 or 4 of this Code, the annual compliance fee shall be 0.02% (2 basis points) of the total assets of the pension fund, as reported in the most current annual statement of the fund, but not more than $8,000. In the case of all other pension funds and retirement systems, the annual compliance fee shall be $8,000.
    (b) The annual compliance fee shall be due on June 30 for the following State fiscal year, except that the fee payable in 1997 for fiscal year 1998 shall be due no earlier than 30 days following the effective date of this amendatory Act of 1997.
    (c) Any information obtained by the Division that is available to the public under the Freedom of Information Act and is either compiled in published form or maintained on a computer processible medium shall be furnished upon the written request of any applicant and the payment of a reasonable information services fee established by the Director, sufficient to cover the total cost to the Division of compiling, processing, maintaining, and generating the information. The information may be furnished by means of published copy or on a computer processed or computer processible medium.
    No fee may be charged to any person for information that the Division is required by law to furnish to that person.
    (d) Except as otherwise provided in this Section, all fees and penalties collected by the Department under this Code shall be deposited into the Public Pension Regulation Fund.
    (e) Fees collected under subsection (c) of this Section and money collected under Section 1A-107 shall be deposited into the Technology Management Revolving Fund and credited to the account of the Department's Public Pension Division. This income shall be used exclusively for the purposes set forth in Section 1A-107. Notwithstanding the provisions of Section 408.2 of the Illinois Insurance Code, no surplus funds remaining in this account shall be deposited in the Insurance Financial Regulation Fund. All money in this account that the Director certifies is not needed for the purposes set forth in Section 1A-107 of this Code shall be transferred to the Public Pension Regulation Fund.
    (f) Nothing in this Code prohibits the General Assembly from appropriating funds from the General Revenue Fund to the Department for the purpose of administering or enforcing this Code.
(Source: P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/1A-113

    (40 ILCS 5/1A-113)
    Sec. 1A-113. Penalties.
    (a) A pension fund that fails, without just cause, to file its annual statement within the time prescribed under Section 1A-109 shall pay to the Department a penalty to be determined by the Department, which shall not exceed $100 for each day's delay.
    (b) A pension fund that fails, without just cause, to file its actuarial statement within the time prescribed under Section 1A-110 or 1A-111 shall pay to the Department a penalty to be determined by the Department, which shall not exceed $100 for each day's delay.
    (c) A pension fund that fails to pay a fee within the time prescribed under Section 1A-112 shall pay to the Department a penalty of 5% of the amount of the fee for each month or part of a month that the fee is late. The entire penalty shall not exceed 25% of the fee due.
    (d) This subsection applies to any governmental unit, as defined in Section 1A-102, that is subject to any law establishing a pension fund or retirement system for the benefit of employees of the governmental unit.
    Whenever the Division determines by examination, investigation, or in any other manner that the governing body or any elected or appointed officer or official of a governmental unit has failed to comply with any provision of that law:
        (1) The Director shall notify in writing the
    
governing body, officer, or official of the specific provision or provisions of the law with which the person has failed to comply.
        (2) Upon receipt of the notice, the person notified
    
shall take immediate steps to comply with the provisions of law specified in the notice.
        (3) If the person notified fails to comply within a
    
reasonable time after receiving the notice, the Director may hold a hearing at which the person notified may show cause for noncompliance with the law.
        (4) If upon hearing the Director determines that good
    
and sufficient cause for noncompliance has not been shown, the Director may order the person to submit evidence of compliance within a specified period of not less than 30 days.
        (5) If evidence of compliance has not been submitted
    
to the Director within the period of time prescribed in the order and no administrative appeal from the order has been initiated, the Director may assess a civil penalty of up to $2,000 against the governing body, officer, or official for each noncompliance with an order of the Director.
    The Director shall develop by rule, with as much specificity as practicable, the standards and criteria to be used in assessing penalties and their amounts. The standards and criteria shall include, but need not be limited to, consideration of evidence of efforts made in good faith to comply with applicable legal requirements. This rulemaking is subject to the provisions of the Illinois Administrative Procedure Act.
    If a penalty is not paid within 30 days of the date of assessment, the Director without further notice shall report the act of noncompliance to the Attorney General of this State. It shall be the duty of the Attorney General or, if the Attorney General so designates, the State's Attorney of the county in which the governmental unit is located to apply promptly by complaint on relation of the Director of Insurance in the name of the people of the State of Illinois, as plaintiff, to the circuit court of the county in which the governmental unit is located for enforcement of the penalty prescribed in this subsection or for such additional relief as the nature of the case and the interest of the employees of the governmental unit or the public may require.
    (e) Whoever knowingly makes a false certificate, entry, or memorandum upon any of the books or papers pertaining to any pension fund or upon any statement, report, or exhibit filed or offered for file with the Division or the Director of Insurance in the course of any examination, inquiry, or investigation, with intent to deceive the Director, the Division, or any of its employees is guilty of a Class A misdemeanor.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/1A-201

    (40 ILCS 5/1A-201)
    Sec. 1A-201. Advisory Commission on Pension Benefits.
    (a) There is created an Advisory Commission on Pension Benefits. The Commission shall consist of 15 persons, of whom 8 shall be appointed by the Governor and one each shall be appointed by the President and Minority Leader of the Senate and the Speaker and Minority Leader of the House of Representatives. Four of the persons appointed by the Governor shall represent different statewide labor organizations, of which 2 shall be organizations that represent primarily teachers and 2 shall be organizations that represent primarily State employees other than teachers. The Directors of the retirement systems established under Articles 14, 15, and 16 of this Code shall be ex officio members of the Commission.
    (b) The Commission shall consider and make its recommendations concerning changing the age and service requirements, automatic annual increase benefits, and employee contribution rates of the State-funded retirement systems and other pension-related issues as determined by the Commission. On or before November 1, 2005, the Commission shall report its findings and recommendations to the Governor and the General Assembly.
    (c) The Commission may request actuarial data from any of the 5 State-funded retirement systems established under this Code. That data may include, but is not limited to, the dates of birth, years of service, salaries, and life expectancies of members. A retirement system shall provide the requested information as soon as practical after the request is received, but in no event later than any reasonable deadline imposed by the Commission.
(Source: P.A. 94-4, eff. 6-1-05.)

40 ILCS 5/Art. 2

 
    (40 ILCS 5/Art. 2 heading)
ARTICLE 2. GENERAL ASSEMBLY RETIREMENT SYSTEM

40 ILCS 5/2-101

    (40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
    Sec. 2-101. Creation of system. A retirement system is created to provide retirement annuities, survivor's annuities and other benefits for members of the General Assembly, certain elected state officials and their beneficiaries.
    The system shall be known as the "General Assembly Retirement System". All its funds and property shall be a trust separate from all other entities, maintained for the purpose of securing payment of annuities and benefits under this Article.
(Source: P.A. 83-1440.)

40 ILCS 5/2-102

    (40 ILCS 5/2-102) (from Ch. 108 1/2, par. 2-102)
    Sec. 2-102. Terms defined. The terms used in this Article shall have the meanings ascribed to them in Sections 2-103 through 2-116, except when the context otherwise requires.
(Source: P.A. 83-1440.)

40 ILCS 5/2-103

    (40 ILCS 5/2-103) (from Ch. 108 1/2, par. 2-103)
    Sec. 2-103. System.
    "System": The General Assembly Retirement System.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-104

    (40 ILCS 5/2-104) (from Ch. 108 1/2, par. 2-104)
    Sec. 2-104. Board.
    "Board": The board of trustees of the system.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-105

    (40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
    Sec. 2-105. Member. "Member": Members of the General Assembly of this State including persons who enter military service while a member of the General Assembly and any person serving as Governor, Lieutenant Governor, Secretary of State, Treasurer, Comptroller, or Attorney General for the period of service in such office.
    Any person who has served for 10 or more years as Clerk or Assistant Clerk of the House of Representatives, Secretary or Assistant Secretary of the Senate, or any combination thereof, may elect to become a member of this system while thenceforth engaged in such service by filing a written election with the board. Any person so electing shall be deemed an active member of the General Assembly for the purpose of validating and transferring any service credits earned under any of the funds and systems established under Articles 3 through 18 of this Code.
(Source: P.A. 85-1008.)

40 ILCS 5/2-105.1

    (40 ILCS 5/2-105.1)
    (This Section was added by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-105.1. Tier 1 participant; Tier 2 participant.
    "Tier 1 participant": A participant who first became a participant before January 1, 2011.
    "Tier 2 participant": A participant who first became a participant on or after January 1, 2011.
(Source: P.A. 98-599, eff. 6-1-14.)

40 ILCS 5/2-105.2

    (40 ILCS 5/2-105.2)
    (This Section was added by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-105.2. Tier 1 retiree. "Tier 1 retiree" means a former Tier 1 participant who has made the election to retire and has terminated service.
(Source: P.A. 98-599, eff. 6-1-14.)

40 ILCS 5/2-106

    (40 ILCS 5/2-106) (from Ch. 108 1/2, par. 2-106)
    Sec. 2-106. Eligible member.
    "Eligible member": Any member other than one who has elected not to participate.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-107

    (40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
    Sec. 2-107. Participant. "Participant": Any member who elects to participate; and any former member who elects to continue participation under Section 2-117.1, for the duration of such continued participation.
(Source: P.A. 86-1488.)

40 ILCS 5/2-108

    (40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-108. Salary. "Salary":
    (1) For members of the General Assembly, the total compensation paid to the member by the State for one year of service, including the additional amounts, if any, paid to the member as an officer pursuant to Section 1 of "An Act in relation to the compensation and emoluments of the members of the General Assembly", approved December 6, 1907, as now or hereafter amended.
    (2) For the State executive officers specified in Section 2-105, the total compensation paid to the member for one year of service.
    (3) For members of the System who are participants under Section 2-117.1, or who are serving as Clerk or Assistant Clerk of the House of Representatives or Secretary or Assistant Secretary of the Senate, the total compensation paid to the member for one year of service, but not to exceed the salary of the highest salaried officer of the General Assembly.
    However, in the event that federal law results in any participant receiving imputed income based on the value of group term life insurance provided by the State, such imputed income shall not be included in salary for the purposes of this Article.
    Notwithstanding any other provision of this Code, the annual salary of a Tier 1 participant for the purposes of this Code shall not exceed, for periods of service in a term of office beginning on or after the effective date of this amendatory Act of the 98th General Assembly, the greater of (i) the annual limitation determined from time to time under subsection (b-5) of Section 1-160 of this Code or (ii) the annualized salary of the participant on the last day of that participant's last term of office beginning before that effective date.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-108. Salary. "Salary":
    (1) For members of the General Assembly, the total compensation paid to the member by the State for one year of service, including the additional amounts, if any, paid to the member as an officer pursuant to Section 1 of "An Act in relation to the compensation and emoluments of the members of the General Assembly", approved December 6, 1907, as now or hereafter amended.
    (2) For the State executive officers specified in Section 2-105, the total compensation paid to the member for one year of service.
    (3) For members of the System who are participants under Section 2-117.1, or who are serving as Clerk or Assistant Clerk of the House of Representatives or Secretary or Assistant Secretary of the Senate, the total compensation paid to the member for one year of service, but not to exceed the salary of the highest salaried officer of the General Assembly.
    However, in the event that federal law results in any participant receiving imputed income based on the value of group term life insurance provided by the State, such imputed income shall not be included in salary for the purposes of this Article.
(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)

40 ILCS 5/2-108.1

    (40 ILCS 5/2-108.1) (from Ch. 108 1/2, par. 2-108.1)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-108.1. Highest salary for annuity purposes.
    (a) "Highest salary for annuity purposes" means whichever of the following is applicable to the participant:
    For a participant who first becomes a participant of this System before August 10, 2009 (the effective date of Public Act 96-207):
        (1) For a participant who is a member of the General
    
Assembly on his or her last day of service: the highest salary that is prescribed by law, on the participant's last day of service, for a member of the General Assembly who is not an officer; plus, if the participant was elected or appointed to serve as an officer of the General Assembly for 2 or more years and has made contributions as required under subsection (d) of Section 2-126, the highest additional amount of compensation prescribed by law, at the time of the participant's service as an officer, for members of the General Assembly who serve in that office.
        (2) For a participant who holds one of the State
    
executive offices specified in Section 2-105 on his or her last day of service: the highest salary prescribed by law for service in that office on the participant's last day of service.
        (3) For a participant who is Clerk or Assistant Clerk
    
of the House of Representatives or Secretary or Assistant Secretary of the Senate on his or her last day of service: the salary received for service in that capacity on the last day of service, but not to exceed the highest salary (including additional compensation for service as an officer) that is prescribed by law on the participant's last day of service for the highest paid officer of the General Assembly.
        (4) For a participant who is a continuing participant
    
under Section 2-117.1 on his or her last day of service: the salary received for service in that capacity on the last day of service, but not to exceed the highest salary (including additional compensation for service as an officer) that is prescribed by law on the participant's last day of service for the highest paid officer of the General Assembly.
    For a participant who first becomes a participant of this System on or after August 10, 2009 (the effective date of Public Act 96-207) and before January 1, 2011 (the effective date of Public Act 96-889), the average monthly salary obtained by dividing the total salary of the participant during the period of: (1) the 48 consecutive months of service within the last 120 months of service in which the total compensation was the highest, or (2) the total period of service, if less than 48 months, by the number of months of service in that period.
    Except as otherwise provided below, for a Tier 2 participant who first becomes a participant of this System on or after January 1, 2011 (the effective date of Public Act 96-889), the average monthly salary obtained by dividing the total salary of the participant during the 96 consecutive months of service within the last 120 months of service in which the total compensation was the highest by the number of months of service in that period; however, for periods of service in a term of office beginning on or after January 1, 2011 and before the effective date of this amendatory Act of the 98th General Assembly, the highest salary for annuity purposes may not exceed $106,800, except that that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1. "Consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the Board by November 1 of each year until there is no longer any such participant who is in service in a term of office that began before the effective date of this amendatory Act of the 98th General Assembly.
    Notwithstanding any other provision of this Section, in determining the highest salary for annuity purposes of a Tier 2 participant who is in service in a term of office beginning on or after the effective date of this amendatory Act of the 98th General Assembly, the Tier 2 participant's salary for periods of service in a term of office beginning on or after that effective date shall not exceed the limitation on salary determined from time to time under subsection (b-5) of Section 1-160 of this Code.
    (b) The earnings limitations of subsection (a) apply to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating a proportional annuity under this Article, except in the case of a person who first became a member of this System before August 22, 1994 and has not, on or after the effective date of this amendatory Act of the 97th General Assembly, irrevocably elected to have those limitations apply. The limitations of subsection (a) shall apply, however, to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating the proportional annuity of a person who first became a member of this System before August 22, 1994 if, on or after the effective date of this amendatory Act of the 97th General Assembly, that member irrevocably elects to have those limitations apply.
    (c) In calculating the subsection (a) earnings limitation to be applied to earnings under any other participating system under the Retirement Systems Reciprocal Act for the purpose of calculating a proportional annuity under this Article, the participant's last day of service shall be deemed to mean the last day of service in any participating system from which the person has applied for a proportional annuity under the Retirement Systems Reciprocal Act.
(Source: P.A. 97-967, eff. 8-16-12; 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-108.1. Highest salary for annuity purposes.
    (a) "Highest salary for annuity purposes" means whichever of the following is applicable to the participant:
    For a participant who first becomes a participant of this System before August 10, 2009 (the effective date of Public Act 96-207):
        (1) For a participant who is a member of the General
    
Assembly on his or her last day of service: the highest salary that is prescribed by law, on the participant's last day of service, for a member of the General Assembly who is not an officer; plus, if the participant was elected or appointed to serve as an officer of the General Assembly for 2 or more years and has made contributions as required under subsection (d) of Section 2-126, the highest additional amount of compensation prescribed by law, at the time of the participant's service as an officer, for members of the General Assembly who serve in that office.
        (2) For a participant who holds one of the State
    
executive offices specified in Section 2-105 on his or her last day of service: the highest salary prescribed by law for service in that office on the participant's last day of service.
        (3) For a participant who is Clerk or Assistant Clerk
    
of the House of Representatives or Secretary or Assistant Secretary of the Senate on his or her last day of service: the salary received for service in that capacity on the last day of service, but not to exceed the highest salary (including additional compensation for service as an officer) that is prescribed by law on the participant's last day of service for the highest paid officer of the General Assembly.
        (4) For a participant who is a continuing participant
    
under Section 2-117.1 on his or her last day of service: the salary received for service in that capacity on the last day of service, but not to exceed the highest salary (including additional compensation for service as an officer) that is prescribed by law on the participant's last day of service for the highest paid officer of the General Assembly.
    For a participant who first becomes a participant of this System on or after August 10, 2009 (the effective date of Public Act 96-207) and before January 1, 2011 (the effective date of Public Act 96-889), the average monthly salary obtained by dividing the total salary of the participant during the period of: (1) the 48 consecutive months of service within the last 120 months of service in which the total compensation was the highest, or (2) the total period of service, if less than 48 months, by the number of months of service in that period.
    For a participant who first becomes a participant of this System on or after January 1, 2011 (the effective date of Public Act 96-889), the average monthly salary obtained by dividing the total salary of the participant during the 96 consecutive months of service within the last 120 months of service in which the total compensation was the highest by the number of months of service in that period; however, beginning January 1, 2011, the highest salary for annuity purposes may not exceed $106,800, except that that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1. "Consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the Board by November 1 of each year.
    (b) The earnings limitations of subsection (a) apply to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating a proportional annuity under this Article, except in the case of a person who first became a member of this System before August 22, 1994 and has not, on or after the effective date of this amendatory Act of the 97th General Assembly, irrevocably elected to have those limitations apply. The limitations of subsection (a) shall apply, however, to earnings under any other participating system under the Retirement Systems Reciprocal Act that are considered in calculating the proportional annuity of a person who first became a member of this System before August 22, 1994 if, on or after the effective date of this amendatory Act of the 97th General Assembly, that member irrevocably elects to have those limitations apply.
    (c) In calculating the subsection (a) earnings limitation to be applied to earnings under any other participating system under the Retirement Systems Reciprocal Act for the purpose of calculating a proportional annuity under this Article, the participant's last day of service shall be deemed to mean the last day of service in any participating system from which the person has applied for a proportional annuity under the Retirement Systems Reciprocal Act.
(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11; 97-967, eff. 8-16-12.)

40 ILCS 5/2-109

    (40 ILCS 5/2-109) (from Ch. 108 1/2, par. 2-109)
    Sec. 2-109. Military service. "Military service": Service in the United States Army, Navy, Air Force, Marines or Coast Guard or any women's auxiliary thereof.
(Source: P.A. 87-794.)

40 ILCS 5/2-110

    (40 ILCS 5/2-110) (from Ch. 108 1/2, par. 2-110)
    Sec. 2-110. Service.
    (A) "Service" means the period beginning on the day when a person first became a member, and ending on the date under consideration, excluding all intervening periods of nonmembership following resignation or expiration of any term of office.
    (B) "Service" includes:
        (a) Military service during war by a person who
    
entered such service while a member, whether rendered before or after the expiration of any term of office; plus up to 2 years of military service that need not have immediately followed service as a member, and need not have been served during wartime, provided that the member makes contributions to the System for such service (1) at the rates provided in Section 2-126 based upon the member's rate of compensation on the last date as a participant prior to such military service, or on the first date as a participant after such military service, whichever is greater, plus (2) if payment is made on or after May 1, 1993, an amount determined by the Board to be equal to the employer's normal cost of the benefits accrued for such military service, plus (3) interest at the effective rate from the date of first membership in the System to the date of payment.
        The amendment to this subdivision (B)(a) made by this
    
amendatory Act of 1993 shall apply to persons who are active contributors to the System on or after November 30, 1992. A person who was an active contributor to the System on November 30, 1992 but is no longer an active contributor may apply to purchase military credit under this subdivision (B)(a) within 60 days after the effective date of this amendatory Act of 1993; if the person is an annuitant, the resulting increase in annuity shall begin to accrue on the first day of the month following the month in which the required payment is received by the System. The change in the required contribution for purchased military credit made by this amendatory Act of 1993 shall not entitle any person to a refund of contributions already paid.
        (b) Service as a judge of a court of this State, but
    
credit for such service is subject to the following conditions: (1) such person shall have been a member for at least 4 years and contributed to the system for service as a judge subsequent to July 8, 1947, at the rates herein provided, including interest at 2% per annum to the date of payment based on the salary in effect during such service; (2) the member was not an eligible member of nor entitled to credit for such service in any other retirement system in the State maintained in whole or in part by public contributions; and (3) the last 4 years of service prior to retirement on annuity was rendered while a member.
        (c) Service as a participating employee under
    
Articles 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 or 18 of the Illinois Pension Code. Credit for such service may be established by a member and, if permitted by the credit transfer Section of the appropriate Article, by a former member who is not yet an annuitant, and is subject to the following conditions: (1) that the credits accrued under the above mentioned Articles have been transferred to this system; and (2) that the member has contributed to this system an amount equal to (i) the contribution rate in effect for participants at the date of membership in this system multiplied by the salary then in effect for members of the General Assembly for each year of service for which credit is being transferred, plus (ii) the State's share of the normal cost of benefits under this system expressed as a percent of payroll, as determined by the system's actuary as of the date of the participant's membership in this system, multiplied by the salary then in effect for members of the General Assembly, for each year of service for which credit is being transferred, plus (iii) interest on items (i) and (ii) above at 6% per annum compounded annually, from the date of membership to the date of payment by the participant, less (iv) the amount transferred to this system on behalf of the participant on account of service rendered while a participant under the above mentioned Articles.
        (d) Service, before October 1, 1975, as an officer
    
elected by the people of Illinois, for which creditable service is required to be transferred from the State Employees' Retirement System to this system by this amendatory Act of 1975.
        (e) Service rendered prior to January 1, 1964, as a
    
justice of the peace or police magistrate or as a civil referee in the Municipal Court of Chicago, but credit for such service may not be granted until the member has paid to the system an amount equal to (1) the contribution rate for participants at the date of membership in this system multiplied by the salary then in effect for members of the General Assembly for each year of service for which credit is being transferred, plus (2) the State's share of the normal cost of benefits under this system expressed as a percent of payroll, as determined by the system's actuary as of the date of the participant's membership in this system, multiplied by the salary then in effect for members of the General Assembly, for each year of service for which credit is allowed, plus, (3) interest on (1) and (2) above at 6% per annum compounded annually from the date of membership to the date of payment by the member. However, a participant may not receive more than 6 years of credit for such service nor may any member receive credit under this paragraph for service for which credit has been granted in any other public pension fund or retirement system in the State.
        (f) Service before January 16, 1981, as an officer
    
elected by the people of Illinois, for which creditable service is transferred from the State Employees' Retirement System to this system.
    (C) Service during any fraction of a month shall be considered as a month of service.
     Service includes the total period of time for which a participant is elected as a member or officer, even though he or she does not complete the term because of death, resignation, judicial decision, or operation of law, provided that the contributions required under this Article for such entire period of office have been made by or on behalf of the participant. In the case of a participant appointed or elected to fill a vacancy, service includes the total period from January 1 of the year in which his or her service commences to the end of the term in which the vacancy occurs, provided the participant contributes in the year of appointment an amount equal to the contributions that would have been required had the participant received salary for the entire year. The foregoing provisions relating to a participant appointed or elected to fill a vacancy shall not apply if the participant was a member of the other legislative chamber at the time of appointment or election.
    (D) Notwithstanding the other provisions of this Section, if application to transfer or establish service credit under paragraph (c) or (e) of subsection (B) of this Section is made between January 1, 1992 and February 1, 1993, the contribution required for such credit shall be an amount equal to (1) the contribution rate in effect for participants at the date of membership in this system multiplied by the salary then in effect for members of the General Assembly for each year of service for which credit is being granted, plus (2) interest thereon at 6% per annum compounded annually, from the date of membership to the date of payment by the member, less (3) any amount transferred to this system on behalf of the member on account of such service credit.
(Source: P.A. 86-27; 86-1028; 87-794; 87-1265.)

40 ILCS 5/2-110.1

    (40 ILCS 5/2-110.1) (from Ch. 108 1/2, par. 2-110.1)
    Sec. 2-110.1. Service credit for elected county, township or municipal official. An active participant having no creditable service as a participating employee under Article 7 of this Code may establish service credit in this system for periods during which the participant held an elective office in a county, township or municipality, (including the full term for which elected if he or she resigned such office to enter the armed forces of the United States), provided the member cannot establish service credit under Article 7 for such periods because the county, township or municipality did not and does not subscribe to coverage for that office under that Article. Credit for such service may be established in this system by the participant paying to this system an amount equal to (1) the contribution rate in effect for participants at the date of membership in this system multiplied by the salary then in effect for the members of the General Assembly for each year of service for which credit is allowed, plus (2) the State's share of the normal cost of benefits under this system expressed as a percent of payroll, as determined by the system's actuary as of the date of the participant's membership in this system multiplied by the salary then in effect for members of the General Assembly, for each year of service for which credit is allowed, plus (3) interest on (1) and (2) above at 4% per annum compounded annually from the date of membership to the date of payment by the participant.
    However, if application for such credit is made between January 1, 1992 and April 1, 1992, the applicant need not pay the amount indicated in item (2) above, but only the sum of items (1) and (3).
(Source: P.A. 87-794.)

40 ILCS 5/2-110.2

    (40 ILCS 5/2-110.2) (from Ch. 108 1/2, par. 2-110.2)
    Sec. 2-110.2. Age enhancement. Any member or former member who receives any age enhancement under Section 14-108.3 of this Code shall be entitled to use such age enhancement under the Retirement Systems Reciprocal Act for the purpose of establishing eligibility for and calculating the amount of a retirement annuity payable under this Article, notwithstanding the provisions of subsection (b) of Section 14-108.3.
(Source: P.A. 87-794.)

40 ILCS 5/2-111

    (40 ILCS 5/2-111) (from Ch. 108 1/2, par. 2-111)
    Sec. 2-111. Annuity. "Annuity": A series of monthly payments payable at the end of each calendar month during the life of an annuitant. The first payment shall be prorated for a fraction of a month to the end of the first month. The last payment shall be made for the whole calendar month in which death occurs.
(Source: P.A. 86-273.)

40 ILCS 5/2-112

    (40 ILCS 5/2-112) (from Ch. 108 1/2, par. 2-112)
    Sec. 2-112. Annuitant. "Annuitant": A person receiving a retirement annuity or survivor's annuity.
(Source: P.A. 83-1440.)

40 ILCS 5/2-113

    (40 ILCS 5/2-113) (from Ch. 108 1/2, par. 2-113)
    Sec. 2-113. Refund beneficiary.
    "Refund beneficiary": The person entitled to receive refunds of a deceased participant's contributions.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-114

    (40 ILCS 5/2-114) (from Ch. 108 1/2, par. 2-114)
    Sec. 2-114. Actuarial tables. "Actuarial tables": Tabular listings of assumed rates of death, disability, retirement and withdrawal from service and mathematical functions derived from such rates combined with an assumed rate of interest based upon the experience of the system as adopted by the board upon recommendation of the actuary.
    The adopted actuarial tables shall be used to determine the amount of all benefits under this Article, including any optional forms of benefits. Optional forms of benefits must be the actuarial equivalent of the normal benefit payable under this Article.
(Source: P.A. 98-1117, eff. 8-26-14.)

40 ILCS 5/2-115

    (40 ILCS 5/2-115) (from Ch. 108 1/2, par. 2-115)
    Sec. 2-115. Prescribed rate of interest.
    "Prescribed rate of interest": 3% per annum compounded annually, or such other rate determined from the actual experience of the system as may be prescribed by the board.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-116

    (40 ILCS 5/2-116) (from Ch. 108 1/2, par. 2-116)
    Sec. 2-116. Fiscal year.
    "Fiscal year": The period beginning on July 1 in any year and ending on June 30 of the next succeeding year.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-117

    (40 ILCS 5/2-117) (from Ch. 108 1/2, par. 2-117)
    Sec. 2-117. Participants - Election not to participate.
    (a) Every person who was a member on November 1, 1947, or in military service on such date, is subject to the provisions of this system beginning upon such date, unless prior to such date he or she filed with the board a written notice of election not to participate.
    Every person who becomes a member after November 1, 1947, and who is then not a participant becomes a participant beginning upon the date of becoming a member unless, within 24 months from that date, he or she has filed with the board a written notice of election not to participate.
    (b) A member who has filed notice of an election not to participate (and a former member who has not yet begun to receive a retirement annuity under this Article) may become a participant with respect to the period for which the member elected not to participate upon filing with the board, before April 1, 1993, a written rescission of the election not to participate. Upon contributing an amount equal to the contributions he or she would have made as a participant from November 1, 1947, or the date of becoming a member, whichever is later, to the date of becoming a participant, with interest at the rate of 4% per annum until the contributions are paid, the participant shall receive credit for service as a member prior to the date of the rescission, both before and after November 1, 1947. The required contributions shall be made before commencement of the retirement annuity; otherwise no credit for service prior to the date of participation shall be granted.
(Source: P.A. 86-273; 87-1265.)

40 ILCS 5/2-117.1

    (40 ILCS 5/2-117.1) (from Ch. 108 1/2, par. 2-117.1)
    Sec. 2-117.1. Participants - Election to continue participation.
    (a) Any person who has served as a member for 4 or more years or who has elected to become a member pursuant to Section 2-105, and who is employed in such a position as to be eligible to actively participate in one of the retirement systems established under Articles 5 through 18 of this Code or under the authority of the Illinois Housing Development Act, and who earns in that capacity, at the time of making an election under this subsection, an amount at least equal to the minimum salary provided by law for members of the General Assembly, may elect after he or she ceases to be a member, but in no event after June 1, 1992, to continue his or her participation in this System for up to 4 additional years instead of participating in such other retirement system, by making written application to the board.
    (b) A person who elects to continue participation under this Section shall make contributions directly to the board, not less frequently than monthly, at the rates specified for participants under Section 2-126. The State shall continue to make contributions on behalf of persons participating under this Section on the same basis as for other participants.
    Creditable service shall be granted to any person for the period, not exceeding 4 years, during which the person continues participation under this Section and continues to make contributions as required.
    (c) A person who elects to continue participation under this Section may cancel such election at any time, and may apply to transfer the creditable service accumulated under this Section to any one of the retirement systems established under Articles 5 through 18 or the Illinois Housing Development Act in which he or she is eligible to participate. Upon such application, the board shall pay to such retirement system (1) the amounts credited to the participant under this Section through participant contributions, including interest, if any, on the date of transfer, plus (2) employer contributions in an amount equal to the amount determined under clause (1). Participation in this System as to any credits transferred under this Section shall terminate on the date of transfer.
(Source: P.A. 86-272; 86-1488; 87-794.)

40 ILCS 5/2-117.2

    (40 ILCS 5/2-117.2) (from Ch. 108 1/2, par. 2-117.2)
    Sec. 2-117.2. Transfer of creditable service to Article 8, 9 or 13 fund.
    (a) Any city officer as defined in Section 8-243.2 of this Code, any county officer elected by vote of the people who is a participant in a pension fund established under Article 9 of this Code, and any elected sanitary district commissioner who is a participant in a pension fund established under Article 13 of this Code, may apply for transfer of his or her creditable service accumulated under this System to such Article 8, 9 or 13 fund. Such creditable service shall be transferred forthwith. Payment by this System to the Article 8, 9 or 13 fund shall be made at the same time and shall consist of:
        (1) the amounts credited to the participant under
    
this System through participant contributions, including interest, if any, on the date of the transfer, but excluding any additional optional credits, which credits shall be refunded to the participant; plus
        (2) employer contributions in an amount equal to the
    
amount determined under clause (1).
    Participation in this System as to any credits transferred under this Section shall terminate on the date of transfer.
    (b) Any such elected city officer, county officer or sanitary district commissioner who has credits and creditable service under the System may establish additional credits and creditable service for periods during which he could have elected to participate but did not so elect. Credits and creditable service may be established by payment to the System of an amount equal to the contributions he would have made if he had elected to participate, plus interest to the date of payment.
    (c) Any such elected city officer, county officer or sanitary district commissioner may reinstate credits and creditable service terminated upon receipt of a refund, by payment to the System of the amount of the refund plus interest thereon to the date of payment.
(Source: P.A. 85-964; 86-1488.)

40 ILCS 5/2-117.3

    (40 ILCS 5/2-117.3) (from Ch. 108 1/2, par. 2-117.3)
    Sec. 2-117.3. Payments and Rollovers.
    (a) The Board may adopt rules prescribing the manner of repaying refunds and purchasing any optional credits permitted under this Article. The rules may prescribe the manner of calculating interest when such payments or repayments are made in installments.
    (b) Rollover contributions from other retirement plans qualified under the U.S. Internal Revenue Code may be used to purchase any optional credit or repay any refund permitted under this Article.
(Source: P.A. 86-1488.)

40 ILCS 5/2-118

    (40 ILCS 5/2-118) (from Ch. 108 1/2, par. 2-118)
    Sec. 2-118. Participants subject to survivor's annuity. Every male participant in service after August 2, 1949 and each female participant in service after July 1, 1971 shall be subject to the provisions relating to a survivor's annuity.
(Source: P.A. 83-1440.)

40 ILCS 5/2-119

    (40 ILCS 5/2-119) (from Ch. 108 1/2, par. 2-119)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-119. Retirement annuity - conditions for eligibility.
    (a) A participant whose service as a member is terminated, regardless of age or cause, is entitled to a retirement annuity beginning on the date specified by the participant in a written application subject to the following conditions:
        1. The date the annuity begins does not precede the
    
date of final termination of service, or is not more than 30 days before the receipt of the application by the board in the case of annuities based on disability or one year before the receipt of the application in the case of annuities based on attained age;
        2. The participant meets one of the following
    
eligibility requirements:
        For a participant who first becomes a participant of
    
this System before January 1, 2011 (the effective date of Public Act 96-889):
            (A) He or she has attained age 55 and has at
        
least 8 years of service credit;
            (B) He or she has attained age 62 and terminated
        
service after July 1, 1971 with at least 4 years of service credit; or
            (C) He or she has completed 8 years of service
        
and has become permanently disabled and as a consequence, is unable to perform the duties of his or her office.
        For a participant who first becomes a participant of
    
this System on or after January 1, 2011 (the effective date of Public Act 96-889), he or she has attained age 67 and has at least 8 years of service credit.
    (a-1) Notwithstanding subsection (a) of this Section, for a Tier 1 participant who begins receiving a retirement annuity under this Section on or after July 1, 2014, the required retirement age under subsection (a) is increased as follows, based on the Tier 1 participant's age on June 1, 2014:
        (1) If he or she is at least age 46 on June 1, 2014,
    
then the required retirement ages under subsection (a) remain unchanged.
        (2) If he or she is at least age 45 but less than age
    
46 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 4 months.
        (3) If he or she is at least age 44 but less than age
    
45 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 8 months.
        (4) If he or she is at least age 43 but less than age
    
44 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 12 months.
        (5) If he or she is at least age 42 but less than age
    
43 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 16 months.
        (6) If he or she is at least age 41 but less than age
    
42 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 20 months.
        (7) If he or she is at least age 40 but less than age
    
41 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 24 months.
        (8) If he or she is at least age 39 but less than age
    
40 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 28 months.
        (9) If he or she is at least age 38 but less than age
    
39 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 32 months.
        (10) If he or she is at least age 37 but less than
    
age 38 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 36 months.
        (11) If he or she is at least age 36 but less than
    
age 37 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 40 months.
        (12) If he or she is at least age 35 but less than
    
age 36 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 44 months.
        (13) If he or she is at least age 34 but less than
    
age 35 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 48 months.
        (14) If he or she is at least age 33 but less than
    
age 34 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 52 months.
        (15) If he or she is at least age 32 but less than
    
age 33 on June 1, 2014, then the required retirement ages under subsection (a) are increased by 56 months.
        (16) If he or she is less than age 32 on June 1,
    
2014, then the required retirement ages under subsection (a) are increased by 60 months.
    Notwithstanding Section 1-103.1, this subsection (a-1) applies without regard to whether or not the Tier 1 participant is in active service under this Article on or after the effective date of this amendatory Act of the 98th General Assembly.
    (a-5) A participant who first becomes a participant of this System on or after January 1, 2011 (the effective date of Public Act 96-889) who has attained age 62 and has at least 8 years of service credit may elect to receive the lower retirement annuity provided in paragraph (c) of Section 2-119.01 of this Code.
    (b) A participant shall be considered permanently disabled only if: (1) disability occurs while in service and is of such a nature as to prevent him or her from reasonably performing the duties of his or her office at the time; and (2) the board has received a written certificate by at least 2 licensed physicians appointed by the board stating that the member is disabled and that the disability is likely to be permanent.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-119. Retirement annuity - conditions for eligibility.
    (a) A participant whose service as a member is terminated, regardless of age or cause, is entitled to a retirement annuity beginning on the date specified by the participant in a written application subject to the following conditions:
        1. The date the annuity begins does not precede the
    
date of final termination of service, or is not more than 30 days before the receipt of the application by the board in the case of annuities based on disability or one year before the receipt of the application in the case of annuities based on attained age;
        2. The participant meets one of the following
    
eligibility requirements:
        For a participant who first becomes a participant of
    
this System before January 1, 2011 (the effective date of Public Act 96-889):
            (A) He or she has attained age 55 and has at
        
least 8 years of service credit;
            (B) He or she has attained age 62 and terminated
        
service after July 1, 1971 with at least 4 years of service credit; or
            (C) He or she has completed 8 years of service
        
and has become permanently disabled and as a consequence, is unable to perform the duties of his or her office.
        For a participant who first becomes a participant of
    
this System on or after January 1, 2011 (the effective date of Public Act 96-889), he or she has attained age 67 and has at least 8 years of service credit.
    (a-5) A participant who first becomes a participant of this System on or after January 1, 2011 (the effective date of Public Act 96-889) who has attained age 62 and has at least 8 years of service credit may elect to receive the lower retirement annuity provided in paragraph (c) of Section 2-119.01 of this Code.
    (b) A participant shall be considered permanently disabled only if: (1) disability occurs while in service and is of such a nature as to prevent him or her from reasonably performing the duties of his or her office at the time; and (2) the board has received a written certificate by at least 2 licensed physicians appointed by the board stating that the member is disabled and that the disability is likely to be permanent.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

40 ILCS 5/2-119.01

    (40 ILCS 5/2-119.01) (from Ch. 108 1/2, par. 2-119.01)
    Sec. 2-119.01. Retirement annuities - Amount.
    (a) For a participant in service after June 30, 1977 who has not made contributions to this System after January 1, 1982, the annual retirement annuity is 3% for each of the first 8 years of service, plus 4% for each of the next 4 years of service, plus 5% for each year of service in excess of 12 years, based on the participant's highest salary for annuity purposes. The maximum retirement annuity payable shall be 80% of the participant's highest salary for annuity purposes.
    (b) For a participant in service after June 30, 1977 who has made contributions to this System on or after January 1, 1982, the annual retirement annuity is 3% for each of the first 4 years of service, plus 3 1/2% for each of the next 2 years of service, plus 4% for each of the next 2 years of service, plus 4 1/2% for each of the next 4 years of service, plus 5% for each year of service in excess of 12 years, of the participant's highest salary for annuity purposes. The maximum retirement annuity payable shall be 85% of the participant's highest salary for annuity purposes.
    (c) Notwithstanding any other provision of this Article, for a participant who first becomes a participant on or after January 1, 2011 (the effective date of Public Act 96-889), the annual retirement annuity is 3% of the participant's highest salary for annuity purposes for each year of service. The maximum retirement annuity payable shall be 60% of the participant's highest salary for annuity purposes.
    (d) Notwithstanding any other provision of this Article, for a participant who first becomes a participant on or after January 1, 2011 (the effective date of Public Act 96-889) and who is retiring after attaining age 62 with at least 8 years of service credit, the retirement annuity shall be reduced by one-half of 1% for each month that the member's age is under age 67.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

40 ILCS 5/2-119.1

    (40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-119.1. Automatic increase in retirement annuity.
    (a) Except as otherwise provided in this Section, a participant who retires after June 30, 1967, and who has not received an initial increase under this Section before the effective date of this amendatory Act of 1991, shall, in January or July next following the first anniversary of retirement, whichever occurs first, and in the same month of each year thereafter, but in no event prior to age 60, have the amount of the originally granted retirement annuity increased as follows: for each year through 1971, 1 1/2%; for each year from 1972 through 1979, 2%; and for 1980 and each year thereafter, 3%. Annuitants who have received an initial increase under this subsection prior to the effective date of this amendatory Act of 1991 shall continue to receive their annual increases in the same month as the initial increase.
    (a-1) Notwithstanding subsection (a), but subject to the provisions of subsection (a-2), for a Tier 1 retiree, all automatic increases payable under subsection (a) on or after the effective date of this amendatory Act of the 98th General Assembly shall be calculated as 3% of the lesser of (1) the total annuity payable at the time of the increase, including previous increases granted, or (2) $1,000 multiplied by the number of years of creditable service upon which the annuity is based.
    Beginning January 1, 2016, the $1,000 referred to in item (2) of this subsection (a-1) shall be increased on each January 1 by the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the preceding September; these adjustments shall be cumulative and compounded. For the purposes of this subsection (a-1), "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new dollar amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the System by November 1 of each year.
    This subsection (a-1) is applicable without regard to whether the person is in service on or after the effective date of this amendatory Act of the 98th General Assembly.
    (a-2) Notwithstanding subsections (a) and (a-1), for an active or inactive Tier 1 participant who has not begun to receive a retirement annuity under this Article before July 1, 2014:
        (1) the second automatic annual increase payable
    
under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 50 on the effective date of this amendatory Act;
        (2) the second, fourth, and sixth automatic annual
    
increases payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 47 but less than age 50 on the effective date of this amendatory Act;
        (3) the second, fourth, sixth, and eighth automatic
    
annual increases payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 44 but less than age 47 on the effective date of this amendatory Act; and
        (4) the second, fourth, sixth, eighth, and tenth
    
automatic annual increases payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is less than age 44 on the effective date of this amendatory Act.
    For the purposes of Section 1-103.1, this subsection (a-2) is applicable without regard to whether the person is in service on or after the effective date of this amendatory Act of the 98th General Assembly.
    (b) Beginning January 1, 1990, for eligible participants who remain in service after attaining 20 years of creditable service, the increases provided under subsection (a) shall begin to accrue on the January 1 next following the date upon which the participant (1) attains age 55, or (2) attains 20 years of creditable service, whichever occurs later, and shall continue to accrue while the participant remains in service; such increases shall become payable on January 1 or July 1, whichever occurs first, next following the first anniversary of retirement. For any person who has service credit in the System for the entire period from January 15, 1969 through December 31, 1992, regardless of the date of termination of service, the reference to age 55 in clause (1) of this subsection (b) shall be deemed to mean age 50. The increases accruing under this subsection (b) after the effective date of this amendatory Act of the 98th General Assembly shall accrue at the rate provided in subsection (a-1).
    This subsection (b) does not apply to any person who first becomes a member of the System after the effective date of this amendatory Act of the 93rd General Assembly.
    (b-5) Notwithstanding any other provision of this Section, a participant who first becomes a participant on or after January 1, 2011 (the effective date of Public Act 96-889) shall, in January or July next following the first anniversary of retirement, whichever occurs first, and in the same month of each year thereafter, but in no event prior to age 67, have the amount of the retirement annuity then being paid increased by an amount calculated as a percentage of the originally granted retirement annuity, equal to 3% or one-half of the annual unadjusted percentage increase (but not less than zero) in the Consumer Price Index for All Urban Consumers for the 12 months ending with the preceding September, as determined by the Public Pension Division of the Department of Insurance and reported to the System by November 1 of each year, whichever is less.
    The changes made to this subsection (b-5) by this amendatory Act of the 98th General Assembly shall apply to increases provided under this subsection on or after the effective date of this amendatory Act without regard to whether service terminated before that effective date.
    (c) The foregoing provisions relating to automatic increases are not applicable to a participant who retires before having made contributions (at the rate prescribed in Section 2-126) for automatic increases for less than the equivalent of one full year. However, in order to be eligible for the automatic increases, such a participant may make arrangements to pay to the system the amount required to bring the total contributions for the automatic increase to the equivalent of one year's contributions based upon his or her last salary.
    (d) A participant who terminated service prior to July 1, 1967, with at least 14 years of service is entitled to an increase in retirement annuity beginning January, 1976, and to additional increases in January of each year thereafter.
    The initial increase shall be 1 1/2% of the originally granted retirement annuity multiplied by the number of full years that the annuitant was in receipt of such annuity prior to January 1, 1972, plus 2% of the originally granted retirement annuity for each year after that date. The subsequent annual increases shall be at the rate of 2% of the originally granted retirement annuity for each year through 1979 and at the rate of 3% for 1980 and thereafter. The increases provided under this subsection (d) on or after the effective date of this amendatory Act of the 98th General Assembly shall be at the rate provided in subsection (a-1), notwithstanding that service terminated before that effective date.
    (e) Except as may be provided in subsection (b-5), beginning January 1, 1990, all automatic annual increases payable under this Section shall be calculated as a percentage of the total annuity payable at the time of the increase, including previous increases granted under this Article.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-119.1. Automatic increase in retirement annuity.
    (a) A participant who retires after June 30, 1967, and who has not received an initial increase under this Section before the effective date of this amendatory Act of 1991, shall, in January or July next following the first anniversary of retirement, whichever occurs first, and in the same month of each year thereafter, but in no event prior to age 60, have the amount of the originally granted retirement annuity increased as follows: for each year through 1971, 1 1/2%; for each year from 1972 through 1979, 2%; and for 1980 and each year thereafter, 3%. Annuitants who have received an initial increase under this subsection prior to the effective date of this amendatory Act of 1991 shall continue to receive their annual increases in the same month as the initial increase.
    (b) Beginning January 1, 1990, for eligible participants who remain in service after attaining 20 years of creditable service, the 3% increases provided under subsection (a) shall begin to accrue on the January 1 next following the date upon which the participant (1) attains age 55, or (2) attains 20 years of creditable service, whichever occurs later, and shall continue to accrue while the participant remains in service; such increases shall become payable on January 1 or July 1, whichever occurs first, next following the first anniversary of retirement. For any person who has service credit in the System for the entire period from January 15, 1969 through December 31, 1992, regardless of the date of termination of service, the reference to age 55 in clause (1) of this subsection (b) shall be deemed to mean age 50.
    This subsection (b) does not apply to any person who first becomes a member of the System after the effective date of this amendatory Act of the 93rd General Assembly.
    (b-5) Notwithstanding any other provision of this Article, a participant who first becomes a participant on or after January 1, 2011 (the effective date of Public Act 96-889) shall, in January or July next following the first anniversary of retirement, whichever occurs first, and in the same month of each year thereafter, but in no event prior to age 67, have the amount of the retirement annuity then being paid increased by 3% or the annual unadjusted percentage increase in the Consumer Price Index for All Urban Consumers as determined by the Public Pension Division of the Department of Insurance under subsection (a) of Section 2-108.1, whichever is less.
    (c) The foregoing provisions relating to automatic increases are not applicable to a participant who retires before having made contributions (at the rate prescribed in Section 2-126) for automatic increases for less than the equivalent of one full year. However, in order to be eligible for the automatic increases, such a participant may make arrangements to pay to the system the amount required to bring the total contributions for the automatic increase to the equivalent of one year's contributions based upon his or her last salary.
    (d) A participant who terminated service prior to July 1, 1967, with at least 14 years of service is entitled to an increase in retirement annuity beginning January, 1976, and to additional increases in January of each year thereafter.
    The initial increase shall be 1 1/2% of the originally granted retirement annuity multiplied by the number of full years that the annuitant was in receipt of such annuity prior to January 1, 1972, plus 2% of the originally granted retirement annuity for each year after that date. The subsequent annual increases shall be at the rate of 2% of the originally granted retirement annuity for each year through 1979 and at the rate of 3% for 1980 and thereafter.
    (e) Beginning January 1, 1990, all automatic annual increases payable under this Section shall be calculated as a percentage of the total annuity payable at the time of the increase, including previous increases granted under this Article.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

40 ILCS 5/2-120

    (40 ILCS 5/2-120) (from Ch. 108 1/2, par. 2-120)
    Sec. 2-120. Reversionary annuity.
    (a) Prior to retirement, a participant may elect to take a reduced retirement annuity and provide, with the actuarial value of the amount of the reduction in annuity, a reversionary annuity for a spouse, parent, child, brother or sister. The option shall be exercised by the filing of a written designation with the board prior to retirement, and may be revoked by the participant at any time before retirement. The death of the participant or the designated reversionary annuitant prior to the participant's retirement shall automatically void this option. If the reversionary annuitant dies after the participant's retirement, the reduced annuity being paid to the retired participant shall remain unchanged and no reversionary annuity shall be payable.
    (b) A reversionary annuity shall not be payable if the participant dies before the expiration of 2 years from the date the written designation was filed with the board even though he or she had retired and was receiving a reduced retirement annuity under this option.
    (c) A reversionary annuity shall begin on the first day of the month following the death of the annuitant and continue until the death of the reversionary annuitant.
    (d) For a member electing to take a reduced annuity under this Section, the automatic increases provided in Section 2-119.1 shall be applied to the amount of the reduced retirement annuity.
(Source: P.A. 90-655, eff. 7-30-98.)

40 ILCS 5/2-121

    (40 ILCS 5/2-121) (from Ch. 108 1/2, par. 2-121)
    Sec. 2-121. Survivor's annuity - conditions for payment.
    (a) A survivor's annuity shall be payable to a surviving spouse or eligible child (1) upon the death in service of a participant with at least 2 years of service credit, or (2) upon the death of an annuitant in receipt of a retirement annuity, or (3) upon the death of a participant who terminated service with at least 4 years of service credit.
    The change in this subsection (a) made by this amendatory Act of 1995 applies to survivors of participants who die on or after December 1, 1994, without regard to whether or not the participant was in service on or after the effective date of this amendatory Act of 1995.
    (b) To be eligible for the survivor's annuity, the spouse and the participant or annuitant must have been married for a continuous period of at least one year immediately preceding the date of death, but need not have been married on the day of the participant's last termination of service, regardless of whether such termination occurred prior to the effective date of this amendatory Act of 1985.
    (c) The annuity shall be payable beginning on the date of a participant's death, or the first of the month following an annuitant's death, if the spouse is then age 50 or over, or beginning at age 50 if the spouse is then under age 50. If an eligible child or children of the participant or annuitant (or a child or children of the eligible spouse meeting the criteria of item (1), (2), or (3) of subsection (d) of this Section) also survive, and the child or children are under the care of the eligible spouse, the annuity shall begin as of the date of a participant's death, or the first of the month following an annuitant's death, without regard to the spouse's age.
    The change to this subsection made by this amendatory Act of 1998 (relating to children of an eligible spouse) applies to the eligible spouse of a participant or annuitant who dies on or after the effective date of this amendatory Act, without regard to whether the participant or annuitant is in service on or after that effective date.
    (c-5) Upon the death in service of a participant during the 90th General Assembly, the survivor's annuity shall be payable prior to age 50, notwithstanding subsection (c) of this Section, provided that the deceased participant had at least 6 years of service. This subsection (c-5) applies to the eligible spouse of a deceased participant without regard to whether the deceased participant was in service on or after the effective date of this amendatory Act of the 96th General Assembly, and retroactive benefits may be paid for periods of eligibility after February 28, 2009.
    (d) For the purposes of this Section and Section 2-121.1, "eligible child" means a child of the deceased participant or annuitant who is at least one of the following:
        (1) unmarried and under the age of 18;
        (2) unmarried, a full-time student, and under the age
    
of 22;
        (3) dependent by reason of physical or mental
    
disability.
    The inclusion of unmarried students under age 22 in the calculation of survivor's annuities by this amendatory Act of 1991 shall apply to all eligible students beginning January 1, 1992, without regard to whether the deceased participant or annuitant was in service on or after the effective date of this amendatory Act of 1991.
    (e) Remarriage of a surviving spouse prior to attainment of age 55 shall disqualify the surviving spouse from the receipt of a survivor's annuity, if the remarriage occurs before the effective date of this amendatory Act of the 91st General Assembly.
    The changes made to this subsection by this amendatory Act of the 91st General Assembly (pertaining to remarriage prior to age 55) apply without regard to whether the deceased participant or annuitant was in service on or after the effective date of this amendatory Act.
(Source: P.A. 95-279, eff. 1-1-08; 96-775, eff. 8-28-09.)

40 ILCS 5/2-121.1

    (40 ILCS 5/2-121.1) (from Ch. 108 1/2, par. 2-121.1)
    Sec. 2-121.1. Survivor's annuity - amount.
    (a) A surviving spouse shall be entitled to 66 2/3% of the amount of retirement annuity to which the participant or annuitant was entitled on the date of death, without regard to whether the participant had attained age 55 prior to his or her death, subject to a minimum payment of 10% of salary. If a surviving spouse, regardless of age, has in his or her care at the date of death any eligible child or children of the participant, the survivor's annuity shall be the greater of the following: (1) 66 2/3% of the amount of retirement annuity to which the participant or annuitant was entitled on the date of death, or (2) 30% of the participant's salary increased by 10% of salary on account of each such child, subject to a total payment for the surviving spouse and children of 50% of salary. If eligible children survive but there is no surviving spouse, or if the surviving spouse dies or becomes disqualified by remarriage while eligible children survive, each eligible child shall be entitled to an annuity of 20% of salary, subject to a maximum total payment for all such children of 50% of salary.
    However, the survivor's annuity payable under this Section shall not be less than 100% of the amount of retirement annuity to which the participant or annuitant was entitled on the date of death, if he or she is survived by a dependent disabled child.
    The salary to be used for determining these benefits shall be the salary used for determining the amount of retirement annuity as provided in Section 2-119.01.
    (b) Upon the death of a participant after the termination of service or upon death of an annuitant, the maximum total payment to a surviving spouse and eligible children, or to eligible children alone if there is no surviving spouse, shall be 75% of the retirement annuity to which the participant or annuitant was entitled, unless there is a dependent disabled child among the survivors.
    (c) When a child ceases to be an eligible child, the annuity to that child, or to the surviving spouse on account of that child, shall thereupon cease, and the annuity payable to the surviving spouse or other eligible children shall be recalculated if necessary.
    Upon the ineligibility of the last eligible child, the annuity shall immediately revert to the amount payable upon death of a participant or annuitant who leaves no eligible children. If the surviving spouse is then under age 50, the annuity as revised shall be deferred until the attainment of age 50.
    (d) Beginning January 1, 1990, every survivor's annuity shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity, or (2) in other cases, on each January 1 occurring on or after the first anniversary of the commencement of the annuity, by an amount equal to 3% of the current amount of the annuity, including any previous increases under this Article. Such increases shall apply without regard to whether the deceased member was in service on or after the effective date of this amendatory Act of 1991, but shall not accrue for any period prior to January 1, 1990.
    (d-5) Notwithstanding any other provision of this Article, the initial survivor's annuity of a survivor of a participant who first becomes a participant on or after January 1, 2011 (the effective date of Public Act 96-889) shall be in the amount of 66 2/3% of the amount of the retirement annuity to which the participant or annuitant was entitled on the date of death and shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity or (2) in other cases, on each January 1 occurring on or after the first anniversary of the commencement of the annuity, by an amount equal to 3% or the annual unadjusted percentage increase in the Consumer Price Index for All Urban Consumers as determined by the Public Pension Division of the Department of Insurance under subsection (a) of Section 2-108.1, whichever is less, of the survivor's annuity then being paid.
    (e) Notwithstanding any other provision of this Article, beginning January 1, 1990, the minimum survivor's annuity payable to any person who is entitled to receive a survivor's annuity under this Article shall be $300 per month, without regard to whether or not the deceased participant was in service on the effective date of this amendatory Act of 1989.
    (f) In the case of a proportional survivor's annuity arising under the Retirement Systems Reciprocal Act where the amount payable by the System on January 1, 1993 is less than $300 per month, the amount payable by the System shall be increased beginning on that date by a monthly amount equal to $2 for each full year that has expired since the annuity began.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

40 ILCS 5/2-121.2

    (40 ILCS 5/2-121.2) (from Ch. 108 1/2, par. 2-121.2)
    Sec. 2-121.2. Reduction of disability and survivor's benefits for corresponding benefits payable under Workers' Compensation and Workers' Occupational Diseases Acts. Whenever a person is entitled to a disability or survivor's benefit under this Article and to benefits under the Workers' Compensation Act or the Workers' Occupational Diseases Act for the same injury or disease, the benefits payable under this Article shall be reduced by the amount of benefits payable under either of those Acts. There shall be no reduction, however, for payments for medical, surgical and hospital services, non-medical remedial care and treatment rendered in accordance with a religious method of healing recognized by the laws of this State, and for artificial appliances, and fixed statutory payments for the loss of or the permanent and complete loss of the use of any bodily member. If the benefits deductible under this Section are stated in a weekly amount, the monthly amount for the purposes of this Section shall be 4 1/3 times the weekly amount.
(Source: P.A. 83-1440.)

40 ILCS 5/2-121.3

    (40 ILCS 5/2-121.3) (from Ch. 108 1/2, par. 2-121.3)
    Sec. 2-121.3. Required distributions. (a) A person who would be eligible to receive a survivor's annuity under this Article but for the fact that the person has not yet attained age 50, shall be eligible for a monthly distribution under this subsection (a), provided that the payment of such distribution is required by federal law.
    The distribution shall become payable on (i) July 1, 1987, (ii) December 1 of the calendar year immediately following the calendar year in which the deceased spouse died, or (iii) December 1 of the calendar year in which the deceased spouse would have attained age 70 1/2, whichever occurs last, and shall remain payable until the first of the following to occur: (1) the person becomes eligible to receive a survivor's annuity under this Article; (2) the end of the month in which the person ceases to be eligible to receive a survivor's annuity upon attainment of age 50, due to remarriage or death; or (3) the end of the month in which such distribution ceases to be required by federal law.
    The amount of the distribution shall be fixed at the time the distribution first becomes payable, and shall be calculated in the same manner as a survivor's annuity under Sections 2-121, 2-121.1 and 2-121.2, but excluding: (A) any requirement for an application for the distribution; (B) any automatic annual increases, supplemental increases, or one-time increases that may be provided by law for survivor's annuities; and (C) any lump-sum or death benefit.
    (b) For the purpose of this Section, a distribution shall be deemed to be required by federal law if: (1) directly mandated by federal statute, rule, or administrative or court decision; or (2) indirectly mandated through imposition of substantial tax or other penalties for noncompliance.
    (c) Notwithstanding Section 1-103.1 of this Code, a member need not be in service on or after the effective date of this amendatory Act of 1989 for the member's surviving spouse to be eligible for a distribution under this Section.
(Source: P.A. 86-273.)

40 ILCS 5/2-122

    (40 ILCS 5/2-122) (from Ch. 108 1/2, par. 2-122)
    Sec. 2-122. Re-entry after retirement. An annuitant who re-enters service as a member shall become a participant on the date of re-entry and retirement annuity payments shall cease at that time. The participant shall resume contributions to the system on the date of re-entry at the rates then in effect and shall begin to accrue additional service credit. He or she shall be entitled to all rights and privileges in the system, including death and disability benefits, subject to the limitations herein provided, except refund of retirement annuity contributions.
    Upon subsequent retirement, the participant shall be entitled to a retirement annuity consisting of: (1) the amount of retirement annuity previously granted and terminated by re-entry into service; and (2) the amount of additional retirement annuity earned during the additional service based on the provisions in effect at the date of such subsequent retirement. However, the total retirement annuity shall not exceed the maximum retirement annuity applicable at the date of the participant's last retirement. If the salary of the participant following the latest re-entry into service is higher than that in effect at the date of the previous retirement and the participant restores to the system all amounts previously received as retirement annuity payments, upon subsequent retirement, the retirement annuity shall be recalculated for all service credited under the system as though the participant had not previously retired.
    The repayment of retirement annuity payments must be made by the participant in a single sum or by a withholding from salary within a period of 6 years from date of re-entry and in any event before subsequent retirement. If previous annuity payments have not been repaid to the system at the date of death of the participant, any remaining balance must be fully repaid to the system before any further annuity shall be payable.
    Such member, if unmarried at date of his last retirement, shall also be entitled to a refund of widow's and widower's annuity contributions, without interest, covering the period from the date of re-entry into service to the date of last retirement.
    Notwithstanding any other provision of this Article, if a person who first becomes a participant under this System on or after January 1, 2011 (the effective date of Public Act 96-889) is receiving a retirement annuity under this Article and becomes a member or participant under this Article or any other Article of this Code and is employed on a full-time basis, then the person's retirement annuity under this System shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity shall resume and, if appropriate, be recalculated under the applicable provisions of this Article.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

40 ILCS 5/2-123

    (40 ILCS 5/2-123) (from Ch. 108 1/2, par. 2-123)
    Sec. 2-123. Refunds.
    (a) A participant who ceases to be a member, other than an annuitant, shall, upon written request, receive a refund of his or her total contributions, without interest. The refund shall include the additional contributions for the automatic increase in retirement annuity. By accepting the refund, a participant forfeits all accrued rights and benefits in the System and loses credit for all service. However, if he or she again becomes a member, he or she may resume status as a participant and reestablish any forfeited service credit by paying to the System the full amount refunded, together with interest at 4% per annum from the time the refund is paid to the date the member again becomes a participant.
    A former member of the General Assembly may reestablish any service credit forfeited by acceptance of a refund by paying to the System on or before February 1, 1993, the full amount refunded, together with interest at 4% per annum from the date of payment of the refund to the date of repayment.
    When a member or former member owes money to the System, interest at the rate of 4% per annum shall accrue and be payable on such amounts owed beginning on the date of termination of service as a member until the contributions due have been paid in full.
    (b) A participant who (1) has elected to cease making contributions for survivor's annuity under subsection (b) of Section 2-126, (2) has no eligible survivor's annuity beneficiary upon becoming an annuitant, or (3) terminates service with less than 8 years of service is entitled to a refund of the contributions for a survivor's annuity, without interest. If the person later marries, a survivor's annuity shall not be payable upon his or her death, unless the amount of the refund is repaid to the System, together with interest at the rate of 4% per year from the date of refund to the date of repayment.
    (c) If at the date of retirement or death of a participant who served as an officer of the General Assembly, the total period of such service is less than 4 years, the additional contributions made by such member on the additional salary as an officer shall be refunded unless the participant served as an officer for at least 2 years and has contributed the amount he or she would have contributed if he or she had served as an officer for 4 years as provided in Section 2-126.
    (d) Upon the termination of the last survivor's annuity payable to a survivor of a deceased participant, the excess, if any, of the total contributions made by the participant for retirement and survivor's annuity, without interest, over the total amount of retirement and survivor's annuity payments received by the participant and the participant's survivors shall be refunded upon request:
        (i) if there was a surviving spouse of the deceased
    
participant who was eligible for a survivor's annuity, to the designated beneficiary of that spouse or, if the designated beneficiary is deceased or there is no designated beneficiary, to that spouse's estate;
        (ii) if there was no eligible surviving spouse of the
    
deceased participant, to the designated beneficiary of the deceased participant or, if the designated beneficiary is deceased or there is no designated beneficiary, to the deceased participant's estate.
    (e) Upon the death of a participant, if a survivor's annuity is not payable under this Article, a beneficiary designated by the participant shall be entitled to a refund of all contributions made by the participant. If the participant has not designated a refund beneficiary, the surviving spouse shall be entitled to the refund of contributions; if there is no surviving spouse, the contributions shall be refunded to the participant's surviving children, if any, and if no children survive, the refund payment shall be made to the participant's estate.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

40 ILCS 5/2-124

    (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
    Sec. 2-124. Contributions by State.
    (a) The State shall make contributions to the System by appropriations of amounts which, together with the contributions of participants, interest earned on investments, and other income will meet the cost of maintaining and administering the System on a 90% funded basis in accordance with actuarial recommendations.
    (b) The Board shall determine the amount of State contributions required for each fiscal year on the basis of the actuarial tables and other assumptions adopted by the Board and the prescribed rate of interest, using the formula in subsection (c).
    (c) For State fiscal years 2012 through 2045, the minimum contribution to the System to be made by the State for each fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 90% of the total actuarial liabilities of the System by the end of State fiscal year 2045. In making these determinations, the required State contribution shall be calculated each year as a level percentage of payroll over the years remaining to and including fiscal year 2045 and shall be determined under the projected unit credit actuarial cost method.
    A change in an actuarial or investment assumption that increases or decreases the required State contribution and first applies in State fiscal year 2018 or thereafter shall be implemented in equal annual amounts over a 5-year period beginning in the State fiscal year in which the actuarial change first applies to the required State contribution.
    A change in an actuarial or investment assumption that increases or decreases the required State contribution and first applied to the State contribution in fiscal year 2014, 2015, 2016, or 2017 shall be implemented:
        (i) as already applied in State fiscal years before
    
2018; and
        (ii) in the portion of the 5-year period beginning in
    
the State fiscal year in which the actuarial change first applied that occurs in State fiscal year 2018 or thereafter, by calculating the change in equal annual amounts over that 5-year period and then implementing it at the resulting annual rate in each of the remaining fiscal years in that 5-year period.
    For State fiscal years 1996 through 2005, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments so that by State fiscal year 2011, the State is contributing at the rate required under this Section.
    Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2006 is $4,157,000.
    Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2007 is $5,220,300.
    For each of State fiscal years 2008 through 2009, the State contribution to the System, as a percentage of the applicable employee payroll, shall be increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is $10,454,000 and shall be made from the proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2010, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.
    Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2011 is the amount recertified by the System on or before April 1, 2011 pursuant to Section 2-134 and shall be made from the proceeds of bonds sold in fiscal year 2011 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System's share of total bond proceeds, (ii) any amounts received from the General Revenue Fund in fiscal year 2011, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.
    Beginning in State fiscal year 2046, the minimum State contribution for each fiscal year shall be the amount needed to maintain the total assets of the System at 90% of the total actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the "required State contribution" or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the required State contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter, as calculated under this Section and certified under Section 2-134, shall not exceed an amount equal to (i) the amount of the required State contribution that would have been calculated under this Section for that fiscal year if the System had not received any payments under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus (ii) the portion of the State's total debt service payments for that fiscal year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined and certified by the Comptroller, that is the same as the System's portion of the total moneys distributed under subsection (d) of Section 7.2 of the General Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State's total debt service payments for fiscal year 2007 on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General Obligation Bond Act, so that, by State fiscal year 2011, the State is contributing at the rate otherwise required under this Section.
    (d) For purposes of determining the required State contribution to the System, the value of the System's assets shall be equal to the actuarial value of the System's assets, which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's assets shall be equal to the market value of the assets as of that date. In determining the actuarial value of the System's assets for fiscal years after June 30, 2008, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.
    (e) For purposes of determining the required State contribution to the system for a particular year, the actuarial value of assets shall be assumed to earn a rate of return equal to the system's actuarially assumed rate of return.
(Source: P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/2-125

    (40 ILCS 5/2-125) (from Ch. 108 1/2, par. 2-125)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-125. Obligations of State; funding guarantee.
    (a) The payment of (1) the required State contributions, (2) all benefits granted under this system and (3) all expenses of administration and operation are obligations of the State to the extent specified in this Article.
    (b) All income, interest and dividends derived from deposits and investments shall be credited to the account of the system in the State Treasury and used to pay benefits under this Article.
    (c) Beginning July 1, 2014, the State shall be obligated to contribute to the System in each State fiscal year an amount not less than the sum of (i) the State's normal cost for the year and (ii) the portion of the unfunded accrued liability assigned to that year by law. Notwithstanding any other provision of law, if the State fails to pay an amount required under this subsection, it shall be the obligation of the Board to seek payment of the required amount in compliance with the provisions of this Section and, if the amount remains unpaid, to bring a mandamus action in the Supreme Court of Illinois to compel the State to make the required payment.
    If the System submits a voucher for contributions required under Section 2-124 and the State fails to pay that voucher within 90 days of its receipt, the Board shall submit a written request to the Comptroller seeking payment. A copy of the request shall be filed with the Secretary of State, and the Secretary of State shall provide a copy to the Governor and General Assembly. No earlier than the 16th day after the System files the request with the Comptroller and Secretary of State, if the amount remains unpaid the Board shall commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to satisfy the voucher.
    This subsection (c) constitutes an express waiver of the State's sovereign immunity solely to the extent that it permits the Board to commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to pay a voucher for the contributions required under Section 2-124.
    (d) Beginning in State fiscal year 2016, the State shall be obligated to make the transfers set forth in subsections (c-5) and (c-10) of Section 20 of the Budget Stabilization Act and to pay to the System its proportionate share of the transferred amounts in accordance with Section 25 of the Budget Stabilization Act. Notwithstanding any other provision of law, if the State fails to transfer an amount required under this subsection or to pay to the System its proportionate share of the transferred amount in accordance with Section 25 of the Budget Stabilization Act, it shall be the obligation of the Board to seek transfer or payment of the required amount in compliance with the provisions of this Section and, if the required amount remains untransferred or the required payment remains unpaid, to bring a mandamus action in the Supreme Court of Illinois to compel the State to make the required transfer or payment or both, as the case may be.
    If the State fails to make a transfer required under subsection (c-5) or (c-10) of Section 20 of the Budget Stabilization Act or a payment to the System required under Section 25 of that Act, the Board shall submit a written request to the Comptroller seeking payment. A copy of the request shall be filed with the Secretary of State, and the Secretary of State shall provide a copy to the Governor and General Assembly. No earlier than the 16th day after the System files the request with the Comptroller and Secretary of State, if the required amount remains untransferred or the required payment remains unpaid, the Board shall commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to make the required transfer or payment or both, as the case may be.
    This subsection (d) constitutes an express waiver of the State's sovereign immunity solely to the extent that it permits the Board to commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to make a transfer required under subsection (c-5) or (c-10) of Section 20 of the Budget Stabilization Act and to pay to the System its proportionate share of the transferred amount in accordance with Section 25 of the Budget Stabilization Act.
    The obligations created by this subsection (d) expire when all of the requirements of subsections (c-5) and (c-10) of Section 20 of the Budget Stabilization Act and Section 25 of the Budget Stabilization Act have been met.
    (e) Any payments and transfers required to be made by the State pursuant to subsection (c) or (d) are expressly subordinate to the payment of the principal, interest, and premium, if any, on any bonded debt obligation of the State or any other State-created entity, either currently outstanding or to be issued, for which the source of repayment or security thereon is derived directly or indirectly from tax revenues collected by the State or any other State-created entity. Payments on such bonded obligations include any statutory fund transfers or other prefunding mechanisms or formulas set forth, now or hereafter, in State law or bond indentures, into debt service funds or accounts of the State related to such bond obligations, consistent with the payment schedules associated with such obligations.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-125. Obligations of State. The payment of (1) the required State contributions, (2) all benefits granted under this system and (3) all expenses of administration and operation are obligations of the State to the extent specified in this Article.
    All income, interest and dividends derived from deposits and investments shall be credited to the account of the system in the State Treasury and used to pay benefits under this Article.
(Source: P.A. 83-1440.)

40 ILCS 5/2-126

    (40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-126. Contributions by participants.
    (a) Each participant shall contribute toward the cost of his or her retirement annuity a percentage of each payment of salary received by him or her for service as a member as follows: for service between October 31, 1947 and January 1, 1959, 5%; for service between January 1, 1959 and June 30, 1969, 6%; for service between July 1, 1969 and January 10, 1973, 6 1/2%; for service after January 10, 1973, 7%; for service after December 31, 1981, 8 1/2%.
    (b) Beginning August 2, 1949, each male participant, and from July 1, 1971, each female participant shall contribute towards the cost of the survivor's annuity 2% of salary.
    A participant who has no eligible survivor's annuity beneficiary may elect to cease making contributions for survivor's annuity under this subsection. A survivor's annuity shall not be payable upon the death of a person who has made this election, unless prior to that death the election has been revoked and the amount of the contributions that would have been paid under this subsection in the absence of the election is paid to the System, together with interest at the rate of 4% per year from the date the contributions would have been made to the date of payment.
    (c) Beginning July 1, 1967 and, in the case of Tier 1 participants, ending on June 30, 2014, each participant shall contribute 1% of salary towards the cost of automatic increase in annuity provided in Section 2-119.1. These contributions shall be made concurrently with contributions for retirement annuity purposes.
    (d) In addition, each participant serving as an officer of the General Assembly shall contribute, for the same purposes and at the same rates as are required of a regular participant, on each additional payment received as an officer. If the participant serves as an officer for at least 2 but less than 4 years, he or she shall contribute an amount equal to the amount that would have been contributed had the participant served as an officer for 4 years. Persons who serve as officers in the 87th General Assembly but cannot receive the additional payment to officers because of the ban on increases in salary during their terms may nonetheless make contributions based on those additional payments for the purpose of having the additional payments included in their highest salary for annuity purposes; however, persons electing to make these additional contributions must also pay an amount representing the corresponding employer contributions, as calculated by the System.
    (e) Notwithstanding any other provision of this Article, the required contribution of a participant who first becomes a participant on or after January 1, 2011 shall not exceed the contribution that would be due under this Article if that participant's highest salary for annuity purposes were $106,800, plus any increases in that amount under Section 2-108.1.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-126. Contributions by participants.
    (a) Each participant shall contribute toward the cost of his or her retirement annuity a percentage of each payment of salary received by him or her for service as a member as follows: for service between October 31, 1947 and January 1, 1959, 5%; for service between January 1, 1959 and June 30, 1969, 6%; for service between July 1, 1969 and January 10, 1973, 6 1/2%; for service after January 10, 1973, 7%; for service after December 31, 1981, 8 1/2%.
    (b) Beginning August 2, 1949, each male participant, and from July 1, 1971, each female participant shall contribute towards the cost of the survivor's annuity 2% of salary.
    A participant who has no eligible survivor's annuity beneficiary may elect to cease making contributions for survivor's annuity under this subsection. A survivor's annuity shall not be payable upon the death of a person who has made this election, unless prior to that death the election has been revoked and the amount of the contributions that would have been paid under this subsection in the absence of the election is paid to the System, together with interest at the rate of 4% per year from the date the contributions would have been made to the date of payment.
    (c) Beginning July 1, 1967, each participant shall contribute 1% of salary towards the cost of automatic increase in annuity provided in Section 2-119.1. These contributions shall be made concurrently with contributions for retirement annuity purposes.
    (d) In addition, each participant serving as an officer of the General Assembly shall contribute, for the same purposes and at the same rates as are required of a regular participant, on each additional payment received as an officer. If the participant serves as an officer for at least 2 but less than 4 years, he or she shall contribute an amount equal to the amount that would have been contributed had the participant served as an officer for 4 years. Persons who serve as officers in the 87th General Assembly but cannot receive the additional payment to officers because of the ban on increases in salary during their terms may nonetheless make contributions based on those additional payments for the purpose of having the additional payments included in their highest salary for annuity purposes; however, persons electing to make these additional contributions must also pay an amount representing the corresponding employer contributions, as calculated by the System.
    (e) Notwithstanding any other provision of this Article, the required contribution of a participant who first becomes a participant on or after January 1, 2011 shall not exceed the contribution that would be due under this Article if that participant's highest salary for annuity purposes were $106,800, plus any increases in that amount under Section 2-108.1.
(Source: P.A. 96-1490, eff. 1-1-11.)

40 ILCS 5/2-126.1

    (40 ILCS 5/2-126.1) (from Ch. 108 1/2, par. 2-126.1)
    Sec. 2-126.1. Pickup of contributions.
    (a) The State shall pick up the participant contributions required under Section 2-126 for all salary earned after December 31, 1981. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code. The State shall pay these participant contributions from the same source of funds which is used in paying salary to the participant. The State may pick up these contributions by a reduction in the cash salary of the participant. If participant contributions are picked up they shall be treated for all purposes of this Article 2 in the same manner as participant contributions that were made prior to the date that the pick up of contributions began.
    (b) Subject to the requirements of federal law, a participant may elect to have the employer pick up optional contributions that the participant has elected to pay to the System, and the contributions so picked up shall be treated as employer contributions for the purposes of determining federal tax treatment. The employer shall pick up the contributions by a reduction in the cash salary of the participant and shall pay the contributions from the same fund that is used to pay earnings to the participant. The election to have optional contributions picked up is irrevocable and the optional contributions may not thereafter be prepaid, by direct payment or otherwise. If the provision authorizing the optional contribution requires payment by a stated date (rather than the date of withdrawal or retirement), that requirement shall be deemed to have been satisfied if (i) on or before the stated date the participant executes a valid irrevocable election to have the contributions picked up under this subsection, and (ii) the picked-up contributions are in fact paid to the System as provided in the election.
(Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)

40 ILCS 5/2-126.5

    (40 ILCS 5/2-126.5)
    (This Section was added by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-126.5. Use of contributions for health care subsidies. The System shall not use any contribution received by the System under this Article to provide a subsidy for the cost of participation in a retiree health care program.
(Source: P.A. 98-599, eff. 6-1-14.)

40 ILCS 5/2-127

    (40 ILCS 5/2-127) (from Ch. 108 1/2, par. 2-127)
    Sec. 2-127. Board created. The system shall be administered by a board of trustees of 7 members as follows: the President of the Senate, ex officio, or his designee; 2 members of the Senate appointed by the President; 3 members of the House of Representatives appointed by the Speaker; and one person elected from the member annuitants under rules prescribed by the board. Only participants are eligible to serve as board members. Not more than two members of the House of Representatives, and not more than one member of the Senate so appointed shall be of the same political party. Appointed board members shall serve for 2-year terms. If the office of President of the Senate or Speaker of the House is vacant or its incumbent is not a participant, the position of trustee otherwise occupied by such officers shall be deemed vacant and be filled by appointment by the Governor with a member of the Senate or the House, as the case may be. This appointment shall be of the same political party as the vacated position.
    Elections for the annuitant member shall be held in January of 1993 and every fourth year thereafter. Nominations and elections shall be conducted in accordance with such procedures as the Board may prescribe. In the event that only one eligible person is nominated, the Board may declare the nominee elected at the close of the nomination period, and need not conduct an election. The annuitant member elected in 1989 shall serve for a term of 4 years beginning February 1, 1989; thereafter, an annuitant member shall serve for a period of 4 years from the February 1st immediately following the date of election, and until a successor is elected and qualified.
    Every person designated to serve as a trustee shall take an oath of office and shall thereupon qualify as a trustee. The oath shall state that the person will diligently and honestly administer the affairs of the system, and will not knowingly violate or wilfully permit the violation of any of the provisions of this Article.
(Source: P.A. 86-273; 86-1488.)

40 ILCS 5/2-128

    (40 ILCS 5/2-128) (from Ch. 108 1/2, par. 2-128)
    Sec. 2-128. Board vacancy. A vacancy in the office of an appointed or ex-officio member occurring during the session of the General Assembly shall be filled by appointment for the unexpired term in the manner provided in Section 2-127 for the initial selection of such members. A vacancy occurring during the interim recess of the General Assembly shall be filled by the Governor for the unexpired term.
    An annuitant trustee shall be disqualified to serve as trustee upon removal of his or her permanent residence from the State of Illinois.
    A vacancy in the office of an annuitant member shall be filled for the unexpired term by the remaining members of the board.
(Source: P.A. 83-1440.)

40 ILCS 5/2-129

    (40 ILCS 5/2-129) (from Ch. 108 1/2, par. 2-129)
    Sec. 2-129. Board voting. Each trustee is entitled to one vote on any action of the board. Not less than 4 concurring votes shall be necessary for action by the board at any meeting. No decision or action shall be effective unless so approved by the board.
(Source: P.A. 83-1440.)

40 ILCS 5/2-130

    (40 ILCS 5/2-130) (from Ch. 108 1/2, par. 2-130)
    Sec. 2-130. Board powers and duties. The board shall have the powers and duties stated in Sections 2-131 through 2-143, in addition to the other powers and duties provided in this Article.
(Source: P.A. 83-1440.)

40 ILCS 5/2-131

    (40 ILCS 5/2-131) (from Ch. 108 1/2, par. 2-131)
    Sec. 2-131. To hold meetings. To hold regular meetings at least twice in each year, and special meetings at such times as are deemed necessary by the board. At least 10 days' notice of each meeting shall be given to each trustee. All meetings shall be open to the public and shall be held in the office of the board.
(Source: P.A. 86-273.)

40 ILCS 5/2-132

    (40 ILCS 5/2-132) (from Ch. 108 1/2, par. 2-132)
    Sec. 2-132. To authorize payments. To consider and pass on all applications for annuities and refunds; to authorize the granting of all annuities and refunds; to suspend any payment or payments, all in accordance with this Article.
(Source: P.A. 83-1440.)

40 ILCS 5/2-133

    (40 ILCS 5/2-133) (from Ch. 108 1/2, par. 2-133)
    Sec. 2-133. To certify interest rate and adopt actuarial tables.
    To certify in the records of the board the prescribed interest rate, and to adopt all necessary actuarial tables in accordance with recommendations of the actuary.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-134

    (40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
    Sec. 2-134. To certify required State contributions and submit vouchers.
    (a) The Board shall certify to the Governor on or before December 15 of each year until December 15, 2011 the amount of the required State contribution to the System for the next fiscal year and shall specifically identify the System's projected State normal cost for that fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based and shall specifically identify the System's projected State normal cost for that fiscal year.
    On or before November 1 of each year, beginning November 1, 2012, the Board shall submit to the State Actuary, the Governor, and the General Assembly a proposed certification of the amount of the required State contribution to the System for the next fiscal year, along with all of the actuarial assumptions, calculations, and data upon which that proposed certification is based. On or before January 1 of each year beginning January 1, 2013, the State Actuary shall issue a preliminary report concerning the proposed certification and identifying, if necessary, recommended changes in actuarial assumptions that the Board must consider before finalizing its certification of the required State contributions. On or before January 15, 2013 and every January 15 thereafter, the Board shall certify to the Governor and the General Assembly the amount of the required State contribution for the next fiscal year. The Board's certification must note any deviations from the State Actuary's recommended changes, the reason or reasons for not following the State Actuary's recommended changes, and the fiscal impact of not following the State Actuary's recommended changes on the required State contribution.
    On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.
    On or before April 1, 2011, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2011, applying the changes made by Public Act 96-889 to the System's assets and liabilities as of June 30, 2009 as though Public Act 96-889 was approved on that date.
    By November 1, 2017, the Board shall recalculate and recertify to the State Actuary, the Governor, and the General Assembly the amount of the State contribution to the System for State fiscal year 2018, taking into account the changes in required State contributions made by this amendatory Act of the 100th General Assembly. The State Actuary shall review the assumptions and valuations underlying the Board's revised certification and issue a preliminary report concerning the proposed recertification and identifying, if necessary, recommended changes in actuarial assumptions that the Board must consider before finalizing its certification of the required State contributions. The Board's final certification must note any deviations from the State Actuary's recommended changes, the reason or reasons for not following the State Actuary's recommended changes, and the fiscal impact of not following the State Actuary's recommended changes on the required State contribution.
    (b) Beginning in State fiscal year 1996, on or as soon as possible after the 15th day of each month the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (d) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year. If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this Section, the difference shall be paid from the General Revenue Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.
    (c) The full amount of any annual appropriation for the System for State fiscal year 1995 shall be transferred and made available to the System at the beginning of that fiscal year at the request of the Board. Any excess funds remaining at the end of any fiscal year from appropriations shall be retained by the System as a general reserve to meet the System's accrued liabilities.
(Source: P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/2-136

    (40 ILCS 5/2-136) (from Ch. 108 1/2, par. 2-136)
    Sec. 2-136. To provide for examination of disability annuitants.
    To provide for the examination of disability annuitants at least once each year during the continuance of disability prior to age 60. The examination shall be by one or more licensed physicians designated by the board.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-137

    (40 ILCS 5/2-137) (from Ch. 108 1/2, par. 2-137)
    Sec. 2-137. To establish an office.
    To establish an office or offices with suitable space for the meetings of the board and for the necessary administrative personnel. All books and records shall be kept in such offices.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-138

    (40 ILCS 5/2-138) (from Ch. 108 1/2, par. 2-138)
    Sec. 2-138. To hire employees.
    To appoint a secretary and employ such other actuarial, medical, clerical or other help as shall be required for the efficient administration of the system and to determine and fix their rate of pay.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-139

    (40 ILCS 5/2-139) (from Ch. 108 1/2, par. 2-139)
    Sec. 2-139. To keep records and accounts. To keep a permanent record of all proceedings of the board, a separate account for each individual member and such additional data as are specified by the actuary as necessary for required calculations and valuations.
(Source: P.A. 83-1440.)

40 ILCS 5/2-139.1

    (40 ILCS 5/2-139.1)
    Sec. 2-139.1. To request information. To request from any member, annuitant, beneficiary, or employer such information as is necessary for the proper administration of the System.
(Source: P.A. 99-450, eff. 8-24-15.)

40 ILCS 5/2-140

    (40 ILCS 5/2-140) (from Ch. 108 1/2, par. 2-140)
    Sec. 2-140. To have an audit and submit statements.
    To have the accounts of the system audited at least biennially by a certified public accountant designated by the Auditor General and to submit an annual statement to the Governor as soon as possible after the end of each fiscal year.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-141

    (40 ILCS 5/2-141) (from Ch. 108 1/2, par. 2-141)
    Sec. 2-141. To accept gifts.
    To accept any gift, grant or bequest of any money or securities. If the grantor specifies the purpose of providing cash benefits for some or all of the participants or annuitants of the system, the gift shall be so used; if no such purpose is designated, the gift shall be used to reduce the costs of the State for providing benefits.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-142

    (40 ILCS 5/2-142) (from Ch. 108 1/2, par. 2-142)
    Sec. 2-142. To submit individual statement. To submit an individual statement to any participating member upon the member's request. The statement shall show the amount of accumulations to the member's credit as of the latest date practicable.
(Source: P.A. 83-1440.)

40 ILCS 5/2-143

    (40 ILCS 5/2-143) (from Ch. 108 1/2, par. 2-143)
    Sec. 2-143. To establish rules.
    To establish rules necessary for the efficient administration of the system.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-144

    (40 ILCS 5/2-144) (from Ch. 108 1/2, par. 2-144)
    Sec. 2-144. Secretary. The secretary shall be in charge of the administration of the detailed affairs of the system and, in addition to such other powers and duties as are delegated by the board, shall:
    (1) Collect and record the receipt of all income of the system, including participants' contributions, State contributions, interest and principal collections on investments as they become due and payable, and other income accruing to the system, and immediately deposit them with the State Treasurer for the account of the system;
    (2) Sign vouchers requesting the State Comptroller to draw warrants upon the State Treasurer in accordance with resolutions of the board, authorizing payments of benefits, refunds and expenses out of the funds of the system;
    (3) Certify to the State, the names of the persons from whose salary deductions are to be made and the amounts or rates to be so deducted.
(Source: P.A. 83-1440.)

40 ILCS 5/2-145

    (40 ILCS 5/2-145) (from Ch. 108 1/2, par. 2-145)
    Sec. 2-145. Treasurer. The State Treasurer shall be ex-officio the treasurer of the system and shall:
    (1) Act as official custodian of the cash and securities of the system and provide adequate safe deposit facilities for the preservation of such securities, and hold such cash and securities subject to the order of the board;
    (2) Receive from the secretary all items of cash belonging to the system, including participants' contributions, State contributions, interest and principal on investments and other income accruing to the system, and deposit all such amounts in a special trust fund for the account of the system;
    (3) Make payments for purposes specified in this Article upon warrants or direct deposit transmittals of the State Comptroller drawn in accordance with vouchers signed by the secretary pursuant to resolutions of the board;
    (4) Submit to the board at least once each month a statement of all receipts for the account of the system and all payments chargeable to the system;
    (5) Furnish a corporate surety bond acceptable to the board in such amount as the board shall designate. The bond shall indemnify the board against any loss which may result from any action or omission of the Treasurer or any of the Treasurer's agents. All reasonable charges incidental to the procuring and giving of the bond shall be paid by the board.
    Any cash accruing to the system not required for current expenditures by the system shall be transferred to the Illinois State Board of Investment for purposes of investment. Until such transfer is made, those funds shall be invested temporarily by the Treasurer on behalf of the system and interest earned thereon shall be credited to the trust fund of the system.
(Source: P.A. 86-273.)

40 ILCS 5/2-146

    (40 ILCS 5/2-146) (from Ch. 108 1/2, par. 2-146)
    Sec. 2-146. Actuary. The actuary shall be the technical advisor of the board and, in addition to supplying general information on technical matters, shall:
        (1) Make an investigation at least once every 3 years
    
of the mortality, retirement, disability, separation, interest and salary rates and recommend, as a result of each such investigation, the actuarial tables to be adopted; and
        (2) Make an annual valuation of the liabilities and
    
reserves of the system, an annual determination of the amount of the required State contributions, and certify the results thereof to the board.
(Source: P.A. 99-232, eff. 8-3-15.)

40 ILCS 5/2-147

    (40 ILCS 5/2-147) (from Ch. 108 1/2, par. 2-147)
    Sec. 2-147. State Comptroller. The State Comptroller in drawing salary warrants on payroll vouchers for members shall draw such warrants to participants for the salary specified less the member contributions to be deducted, as certified in the vouchers, and shall draw a warrant to the system for the total of the contributions so withheld on each such payroll voucher. The warrant drawn to the system, and the additional copy of the payroll, shall be transmitted immediately to the secretary.
    The Comptroller shall draw warrants or prepare direct deposit transmittals upon the State Treasurer payable from the funds of this system for purposes of this Article upon the presentation of vouchers approved by the secretary in accordance with resolutions of the board, and in the exercise of the investment authority, upon presentation of vouchers approved by the director of the Illinois State Board of Investment in accordance with the order and direction of said board.
(Source: P.A. 83-1440.)

40 ILCS 5/2-148

    (40 ILCS 5/2-148) (from Ch. 108 1/2, par. 2-148)
    Sec. 2-148. Speaker of House - President of Senate. The Speaker of the House and the President of the Senate, in the preparation of payroll vouchers for payments of salary to participants, shall indicate in addition to other things: (1) the amount of contributions to be deducted from the salary of each participant included in each voucher, (2) the net amount payable to each participant after such deductions and, (3) the total of all participant contributions so deducted. An additional certified copy of each payroll voucher certified by the State shall be prepared and forwarded along with the original payroll voucher to the State Comptroller for transmittal to the board as herein provided.
(Source: P.A. 83-1440.)

40 ILCS 5/2-149

    (40 ILCS 5/2-149) (from Ch. 108 1/2, par. 2-149)
    Sec. 2-149. Authorization. Each participant shall, by virtue of the payment of the participant contributions paid to the system, receive a vested interest in the refunds provided herein, and in consideration of such vested interest agrees to and authorizes the deductions from salary of all contributions required under this Article.
    Payment of salary as prescribed by law, less the required participant contributions, shall, together with the vested rights in the refunds, be a full and complete discharge of all claims of payments for service rendered by a participant during the period covered by any such payment.
(Source: P.A. 83-1440.)

40 ILCS 5/2-150

    (40 ILCS 5/2-150) (from Ch. 108 1/2, par. 2-150)
    Sec. 2-150. Retirement Systems Reciprocal Act. The "Retirement Systems Reciprocal Act", being Article 20 of this Code, is adopted, and made a part of this Article; provided, (1) that where there is a direct conflict in the provisions of such Act and the specific provisions of this Article, the provisions of this Article shall prevail, and (2) that Section 20-131 shall be applicable to this system only if a participant has rendered at least 6 years of service as a member and, (3) that in the case of any participant who would have been eligible to have his or her retirement annuity computed under Section 20-131, the survivor's annuity payable in the event of the participant's death under Section 2-121 to the surviving spouse shall be computed on the basis of the retirement annuity to which the participant would have been entitled under the provisions of Section 20-131 if such computation would result in a greater survivor's annuity.
(Source: P.A. 83-1440.)

40 ILCS 5/2-151

    (40 ILCS 5/2-151) (from Ch. 108 1/2, par. 2-151)
    Sec. 2-151. No compensation. Trustees shall serve without compensation, but shall be reimbursed for reasonable traveling expenses incurred in attending meetings of the board.
(Source: P.A. 83-1440.)

40 ILCS 5/2-152

    (40 ILCS 5/2-152) (from Ch. 108 1/2, par. 2-152)
    Sec. 2-152. No monetary gain on investments. No trustee or employee of the board shall have any direct interest in the income, gains or profits of any investments made in behalf of the system, nor receive any pay or emolument for services in connection with any investment. No trustee or employee of the board shall become an endorser or surety, or in any manner an obligor for money loaned or borrowed from the system. Whoever violates any of the provisions of this Section is guilty of a petty offense.
(Source: P.A. 83-1440.)

40 ILCS 5/2-153

    (40 ILCS 5/2-153) (from Ch. 108 1/2, par. 2-153)
    Sec. 2-153. Undivided interest. The assets of the system shall be invested as one fund, and no particular person, group of persons or entity shall have any right in any specific security or property, or in any item of cash, other than an undivided interest in the whole as specified in this Article.
(Source: P.A. 83-1440.)

40 ILCS 5/2-154

    (40 ILCS 5/2-154) (from Ch. 108 1/2, par. 2-154)
    Sec. 2-154. Assignment. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of participants in this system, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. However, a person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the "State Salary and Annuity Withholding Act", approved August 21, 1961, as now or hereafter amended.
    The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.
(Source: P.A. 86-273.)

40 ILCS 5/2-155

    (40 ILCS 5/2-155) (from Ch. 108 1/2, par. 2-155)
    Sec. 2-155. Fraud.
    Any person who knowingly makes any false statement, or falsifies or permits to be falsified any record of this system, in any attempt to defraud the system, is guilty of a petty offense.
(Source: P.A. 77-2560.)

40 ILCS 5/2-155.1

    (40 ILCS 5/2-155.1)
    Sec. 2-155.1. Mistake in benefit. If the System mistakenly sets any benefit at an incorrect amount, it shall recalculate the benefit as soon as may be practicable after the mistake is discovered.
    If the benefit was mistakenly set too low, the System shall make a lump sum payment to the recipient of an amount equal to the difference between the benefits that should have been paid and those actually paid.
    If the benefit was mistakenly set too high, the System may recover the amount overpaid from the recipient thereof, either directly or by deducting such amount from the remaining benefits payable to the recipient. However, if (1) the amount of the benefit was mistakenly set too high, and (2) the error was undiscovered for 3 years or longer, and (3) the error was not the result of incorrect information supplied by the affected member or beneficiary, then upon discovery of the mistake the benefit shall be adjusted to the correct level, but the recipient of the benefit need not repay to the System the excess amounts received in error.
    This Section applies to all mistakes in benefit calculations that occur before, on, or after the effective date of this amendatory Act of the 98th General Assembly.
(Source: P.A. 98-1117, eff. 8-26-14.)

40 ILCS 5/2-156

    (40 ILCS 5/2-156) (from Ch. 108 1/2, par. 2-156)
    Sec. 2-156. Felony conviction. None of the benefits herein provided for shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his or her service as a member.
    None of the benefits provided for in this Article shall be paid to any person who otherwise would receive a survivor benefit who is convicted of any felony relating to or arising out of or in connection with the service of the member from whom the benefit results.
    This Section shall not operate to impair any contract or vested right acquired prior to July 11, 1955 under any law or laws continued in this Article, nor to preclude the right to a refund, and for the changes under this amendatory Act of the 100th General Assembly, shall not impair any contract or vested right acquired by a survivor prior to the effective date of this amendatory Act of the 100th General Assembly.
    All participants entering service subsequent to July 11, 1955 shall be deemed to have consented to the provisions of this Section as a condition of participation, and all participants entering service subsequent to the effective date of this amendatory Act of the 100th General Assembly shall be deemed to have consented to the provisions of this amendatory Act as a condition of participation.
(Source: P.A. 100-334, eff. 8-25-17.)

40 ILCS 5/2-157

    (40 ILCS 5/2-157) (from Ch. 108 1/2, par. 2-157)
    Sec. 2-157. Administrative review. The provisions of the Administrative Review Law, and all amendments and modifications thereof and the rules adopted pursuant thereto, shall apply to and govern all proceedings for the judicial review of final administrative decisions of the retirement board provided for under this Article. The term "administrative decision" is as defined in Section 3-101 of the Code of Civil Procedure.
(Source: P.A. 82-783.)

40 ILCS 5/2-158

    (40 ILCS 5/2-158) (from Ch. 108 1/2, par. 2-158)
    Sec. 2-158. General provisions and savings clause.
    The provisions of Article 1 and Article 23 of this Code apply to this Article as though such provisions were fully set forth in this Article as a part thereof.
(Source: Laws 1963, p. 161.)

40 ILCS 5/2-160

    (40 ILCS 5/2-160) (from Ch. 108 1/2, par. 2-160)
    Sec. 2-160. Savings clause. The repeal or amendment of any Section or provision of this Article by this amendatory Act of 1984 shall not affect or impair any pensions, benefits, rights or credits accrued or in effect prior thereto.
(Source: P.A. 83-1440.)

40 ILCS 5/2-161

    (40 ILCS 5/2-161) (from Ch. 108 1/2, par. 2-161)
    Sec. 2-161. Application of amendments. The amendments to Sections 2-119.1 and 2-126 of this Code made by this amendatory Act of 1993 shall apply to persons who are active contributors to this System on or after November 30, 1992. A person who was an active contributor to the System on November 30, 1992 but is no longer an active contributor may apply for any additional benefits authorized by those amendments until 60 days after the effective date of this amendatory Act of 1993; if the person is an annuitant, the resulting increase in annuity shall begin to accrue on the first day of the month following the month in which application for the benefit and any required contribution are received by the System.
(Source: P.A. 87-1265.)

40 ILCS 5/2-162

    (40 ILCS 5/2-162)
    (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-162. Application and expiration of new benefit increases.
    (a) As used in this Section, "new benefit increase" means an increase in the amount of any benefit provided under this Article, or an expansion of the conditions of eligibility for any benefit under this Article, that results from an amendment to this Code that takes effect after the effective date of this amendatory Act of the 94th General Assembly. "New benefit increase", however, does not include any benefit increase resulting from the changes made to this Article by this amendatory Act of the 98th General Assembly.
    (b) Notwithstanding any other provision of this Code or any subsequent amendment to this Code, every new benefit increase is subject to this Section and shall be deemed to be granted only in conformance with and contingent upon compliance with the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must identify and provide for payment to the System of additional funding at least sufficient to fund the resulting annual increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General Assembly providing the additional funding required under this subsection. The Commission on Government Forecasting and Accountability shall analyze whether adequate additional funding has been provided for the new benefit increase and shall report its analysis to the Public Pension Division of the Department of Insurance. A new benefit increase created by a Public Act that does not include the additional funding required under this subsection is null and void. If the Public Pension Division determines that the additional funding provided for a new benefit increase under this subsection is or has become inadequate, it may so certify to the Governor and the State Comptroller and, in the absence of corrective action by the General Assembly, the new benefit increase shall expire at the end of the fiscal year in which the certification is made.
    (d) Every new benefit increase shall expire 5 years after its effective date or on such earlier date as may be specified in the language enacting the new benefit increase or provided under subsection (c). This does not prevent the General Assembly from extending or re-creating a new benefit increase by law.
    (e) Except as otherwise provided in the language creating the new benefit increase, a new benefit increase that expires under this Section continues to apply to persons who applied and qualified for the affected benefit while the new benefit increase was in effect and to the affected beneficiaries and alternate payees of such persons, but does not apply to any other person, including without limitation a person who continues in service after the expiration date and did not apply and qualify for the affected benefit while the new benefit increase was in effect.
(Source: P.A. 98-599, eff. 6-1-14.)
 
    (Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)
    Sec. 2-162. Application and expiration of new benefit increases.
    (a) As used in this Section, "new benefit increase" means an increase in the amount of any benefit provided under this Article, or an expansion of the conditions of eligibility for any benefit under this Article, that results from an amendment to this Code that takes effect after the effective date of this amendatory Act of the 94th General Assembly.
    (b) Notwithstanding any other provision of this Code or any subsequent amendment to this Code, every new benefit increase is subject to this Section and shall be deemed to be granted only in conformance with and contingent upon compliance with the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must identify and provide for payment to the System of additional funding at least sufficient to fund the resulting annual increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General Assembly providing the additional funding required under this subsection. The Commission on Government Forecasting and Accountability shall analyze whether adequate additional funding has been provided for the new benefit increase and shall report its analysis to the Public Pension Division of the Department of Financial and Professional Regulation. A new benefit increase created by a Public Act that does not include the additional funding required under this subsection is null and void. If the Public Pension Division determines that the additional funding provided for a new benefit increase under this subsection is or has become inadequate, it may so certify to the Governor and the State Comptroller and, in the absence of corrective action by the General Assembly, the new benefit increase shall expire at the end of the fiscal year in which the certification is made.
    (d) Every new benefit increase shall expire 5 years after its effective date or on such earlier date as may be specified in the language enacting the new benefit increase or provided under subsection (c). This does not prevent the General Assembly from extending or re-creating a new benefit increase by law.
    (e) Except as otherwise provided in the language creating the new benefit increase, a new benefit increase that expires under this Section continues to apply to persons who applied and qualified for the affected benefit while the new benefit increase was in effect and to the affected beneficiaries and alternate payees of such persons, but does not apply to any other person, including without limitation a person who continues in service after the expiration date and did not apply and qualify for the affected benefit while the new benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)

40 ILCS 5/2-163

    (40 ILCS 5/2-163)
    Sec. 2-163. Termination of plan. Upon plan termination, a participant's interest in the pension fund will be nonforfeitable.
(Source: P.A. 98-1117, eff. 8-26-14.)

40 ILCS 5/2-165

    (40 ILCS 5/2-165)
    Sec. 2-165. (Repealed).
(Source: P.A. 98-599, eff. 6-1-14. Repealed by P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/2-166

    (40 ILCS 5/2-166)
    Sec. 2-166. (Repealed).
(Source: P.A. 98-599, eff. 6-1-14. Repealed by P.A. 100-23, eff. 7-6-17.)

40 ILCS 5/Art. 3

 
    (40 ILCS 5/Art. 3 heading)
ARTICLE 3. POLICE PENSION FUND - MUNICIPALITIES
500,000 and UNDER

40 ILCS 5/3-101

    (40 ILCS 5/3-101) (from Ch. 108 1/2, par. 3-101)
    Sec. 3-101. Creation of fund. In each municipality, as defined in Section 3-103, the city council or the board of trustees, as the case may be, shall establish and administer a police pension fund, as prescribed in this Article, for the benefit of its police officers and of their surviving spouses, children, and certain other dependents. The duty of the corporate authorities of a municipality to establish and administer a police pension fund shall be suspended during any period during which the fund is dissolved under Section 3-144.6 of this Code.
(Source: P.A. 97-99, eff. 1-1-12.)

40 ILCS 5/3-102

    (40 ILCS 5/3-102) (from Ch. 108 1/2, par. 3-102)
    Sec. 3-102. Terms defined. The terms used in this Article have the meanings ascribed to them in Sections 3-103 through 3-108.3, except when the context otherwise requires.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/3-103

    (40 ILCS 5/3-103) (from Ch. 108 1/2, par. 3-103)
    Sec. 3-103. Municipality. "Municipality": (1) Any city, village or incorporated town of 5,000 or more but less than 500,000 inhabitants, as determined from the United States Government statistics or a census taken at any time by the city, village or incorporated town and (2) any city, village or incorporated town of less than 5,000 inhabitants which, by referendum held under Section 3-145 adopts this Article.
(Source: P.A. 83-1440.)

40 ILCS 5/3-105

    (40 ILCS 5/3-105) (from Ch. 108 1/2, par. 3-105)
    Sec. 3-105. Board. "Board": The board of trustees of the police pension fund of a municipality as established in Section 3-128.
(Source: P.A. 83-1440.)

40 ILCS 5/3-105.1

    (40 ILCS 5/3-105.1) (from Ch. 108 1/2, par. 3-105.1)
    Sec. 3-105.1. Deferred Pensioner. "Deferred Pensioner": a police officer who has retired having accumulated enough creditable service to qualify for a pension, but who has not attained the required age.
(Source: P.A. 84-1010.)

40 ILCS 5/3-105.2

    (40 ILCS 5/3-105.2)
    Sec. 3-105.2. Self-Managed Plan. "Self-managed plan": The defined contribution retirement program established for eligible employees under Section 3-109.3. The self-managed plan includes disability benefits as provided in Sections 3-114.1, 3-114.2, 3-114.3, and 3-114.6 (but disregarding disability retirement annuities under Section 3-116.1). The self-managed plan does not include any retirement annuities, death benefits, or survivors insurance benefits payable directly from the fund under Section 3-111, 3-111.1, 3-112, 3-114.1, 3-114.2, 3-114.3, 3-114.6, or 3-116.1 or any refunds determined under Section 3-124.
(Source: P.A. 91-939, eff. 2-1-01.)

40 ILCS 5/3-106

    (40 ILCS 5/3-106) (from Ch. 108 1/2, par. 3-106)
    Sec. 3-106. Police officer, officer. "Police officer" or "officer": Any person who (1) is appointed to the police force of a police department and sworn and commissioned to perform police duties; and (2) within 3 months after receiving his or her first appointment and, if reappointed, within 3 months thereafter, or as otherwise provided in Section 3-109, makes written application to the board to come under the provisions of this Article.
    Police officers serving initial probationary periods, if otherwise eligible, shall be police officers within the meaning of this Section.
(Source: P.A. 89-52, eff. 6-30-95.)

40 ILCS 5/3-107

    (40 ILCS 5/3-107) (from Ch. 108 1/2, par. 3-107)
    Sec. 3-107. Gender. "Gender": The masculine gender whenever used in this Article includes the female gender unless manifestly inconsistent with the context.
(Source: P.A. 83-1440.)

40 ILCS 5/3-108

    (40 ILCS 5/3-108) (from Ch. 108 1/2, par. 3-108)
    Sec. 3-108. Child or children. "Child" or "children": "Child" or "children" includes a police officer's natural and legally adopted children.
(Source: P.A. 95-279, eff. 1-1-08.)

40 ILCS 5/3-108.1

    (40 ILCS 5/3-108.1) (from Ch. 108 1/2, par. 3-108.1)
    Sec. 3-108.1. Dependent parent. "Dependent parent": A parent who furnishes satisfactory proof that the deceased police officer at the time of his or her death was the sole support of the parent or that the parent was the dependent of the deceased police officer for federal income tax purposes.
(Source: P.A. 83-1440.)

40 ILCS 5/3-108.2

    (40 ILCS 5/3-108.2)
    Sec. 3-108.2. Participant. "Participant": A police officer or deferred pensioner of a pension fund, or a beneficiary of the pension fund.
(Source: P.A. 90-507, eff. 8-22-97.)

40 ILCS 5/3-108.3

    (40 ILCS 5/3-108.3)
    Sec. 3-108.3. Beneficiary. "Beneficiary": A person receiving benefits from a pension fund, including, but not limited to, retired pensioners, disabled pensioners, their surviving spouses, minor children, disabled children, and dependent parents. If a special needs trust as described in Section 1396p(d)(4) of Title 42 of the United States Code, as amended from time to time, has been established for a disabled adult child, then the special needs trust may stand in lieu of the disabled adult child as a beneficiary for the purposes of this Article.
(Source: P.A. 96-1143, eff. 7-21-10.)

40 ILCS 5/3-109

    (40 ILCS 5/3-109) (from Ch. 108 1/2, par. 3-109)
    Sec. 3-109. Persons excluded.
    (a) The following persons shall not be eligible to participate in a fund created under this Article:
        (1) part-time police officers, special police
    
officers, night watchmen, temporary employees, traffic guards or so-called auxiliary police officers specially appointed to aid or direct traffic at or near schools or public functions, or to aid in civil defense, municipal parking lot attendants, clerks or other civilian employees of a police department who perform clerical duties exclusively;
        (2) any police officer who fails to pay the
    
contributions required under Section 3-125.1, computed (i) for funds established prior to August 5, 1963, from the date the municipality established the fund or the date of a police officer's first appointment (including an appointment on probation), whichever is later, or (ii) for funds established after August 5, 1963, from the date, as determined from the statistics or census provided in Section 3-103, the municipality became subject to this Article by attaining the minimum population or by referendum, or the date of a police officer's first appointment (including an appointment on probation), whichever is later, and continuing during his or her entire service as a police officer; and
        (3) any person who has elected under Section 3-109.1
    
to participate in the Illinois Municipal Retirement Fund rather than in a fund established under this Article, without regard to whether the person continues to be employed as chief of police or is employed in some other rank or capacity within the police department, unless the person has lawfully rescinded that election.
    (b) A police officer who is reappointed shall, before being declared eligible to participate in the pension fund, repay to the fund as required by Section 3-124 any refund received thereunder.
    (c) Any person otherwise qualified to participate who was excluded from participation by reason of the age restriction removed by Public Act 79-1165 may elect to participate by making a written application to the Board before January 1, 1990. Persons so electing shall begin participation on the first day of the month following the date of application. Such persons may also elect to establish creditable service for periods of employment as a police officer during which they did not participate by paying into the police pension fund, before January 1, 1990, the amount that the person would have contributed had deductions from salary been made for such purpose at the time such service was rendered, together with interest thereon at 6% per annum from the time such service was rendered until the date the payment is made.
    (d) A person otherwise qualified to participate who was excluded from participation by reason of the fitness requirement removed by this amendatory Act of 1995 may elect to participate by making a written application to the Board before July 1, 1996. Persons so electing shall begin participation on the first day of the month following the month in which the application is received by the Board. These persons may also elect to establish creditable service for periods of employment as a police officer during which they did not participate by paying into the police pension fund, before January 1, 1997, the amount that the person would have contributed had deductions from salary been made for this purpose at the time the service was rendered, together with interest thereon at 6% per annum, compounded annually, from the time the service was rendered until the date of payment.
    (e) A person employed by the Village of Shiloh who is otherwise qualified to participate and was excluded from participation by reason of his or her failure to make written application to the Board within 3 months after receiving his or her first appointment or reappointment as required under Section 3-106 may elect to participate by making a written application to the Board before July 1, 2008. Persons so electing shall begin participation on the first day of the month following the month in which the application is received by the Board. These persons may also elect to establish creditable service for periods of employment as a police officer during which they did not participate by paying into the police pension fund, before January 1, 2009, the amount that the person would have contributed had deductions from salary been made for this purpose at the time the service was rendered, together with interest thereon at 6% per annum, compounded annually, from the time the service was rendered until the date of payment. The Village of Shiloh must pay to the System the corresponding employer contributions, plus interest.
    (f) A person who has entered into a personal services contract to perform police duties for the Village of Bartonville on or before the effective date of this amendatory Act of the 96th General Assembly may be appointed as an officer in the Village of Bartonville within 6 months after the effective date of this amendatory Act, but shall be excluded from participating under this Article.
    (g) A person employed by the Village of Glen Carbon who is otherwise qualified to participate and was excluded from participation by reason of his or her failure to make written application to the Board within 3 months after receiving his or her first appointment or reappointment as required under Section 3-106 may elect to participate by making a written application to the Board before January 1, 2011. Persons so electing shall begin participation on the first day of the month following the month in which the application is received by the Board. These persons may also elect to establish creditable service for periods of employment as a police officer during which they did not participate by paying into the police pension fund, before July 1, 2011, (i) employee contributions that the person would have contributed had deductions from salary been made for this purpose at the time the service was rendered, (ii) employer contributions that the employer would have contributed had deductions from salary been made for this purpose at the time the service was rendered, plus (iii) interest on items (i) and (ii) at the actuarially assumed interest rate, compounded annually, from the time the service was rendered until the date of payment.
(Source: P.A. 95-483, eff. 8-28-07; 96-775, eff. 8-28-09; 96-1252, eff. 7-23-10.)

40 ILCS 5/3-109.1

    (40 ILCS 5/3-109.1) (from Ch. 108 1/2, par. 3-109.1)
    Sec. 3-109.1. Chief of police.
    (a) Except as provided in subsection (a-5), beginning January 1, 1990, any person who is employed as the chief of police of a "participating municipality" as defined in Section 7-106 of this Code, may elect to participate in the Illinois Municipal Retirement Fund rather than in a fund created under this Article 3. Except as provided in subsection (b), this election shall be irrevocable, and shall be filed in writing with the Board of the Illinois Municipal Retirement Fund.
    (a-5) On or after January 1, 2019, a person may not elect to participate in the Illinois Municipal Retirement Fund with respect to his or her employment as the chief of police of a participating municipality, unless that person became a participating employee in the Illinois Municipal Retirement Fund before January 1, 2019.
    (b) Until January 1, 1999, a chief of police who has elected under this Section to participate in IMRF rather than a fund created under this Article may elect to rescind that election and transfer his or her participation to the police pension fund established under this Article by the employing municipality. The chief must notify the boards of trustees of both funds in writing of his or her decision to rescind the election and transfer participation. A chief of police who transfers participation under this subsection (b) shall not be deemed ineligible to participate in the police pension fund by reason of having failed to apply within the 3-month period specified in Section 3-106.
(Source: P.A. 100-281, eff. 8-24-17.)

40 ILCS 5/3-109.2

    (40 ILCS 5/3-109.2)
    Sec. 3-109.2. Retirement Program Elections.
    (a) For the purposes of this Section and Section 3-109.3:
    "Eligible employee" means a police officer who is hired on or within one year after the effective date of the self-managed plan established under Section 3-109.3.
    "Ineligible employee" means a police officer who is hired before or more than one year after that effective date.
    (b) Each eligible employee may elect to participate in the self-managed plan with respect to all periods of covered employment occurring on and after the effective date of the eligible employee's election. The election must be made in writing, in the manner prescribed by the fund, and within 6 months after the later of (i) the date upon which the self-managed plan takes effect or (ii) the date of hire.
    The election, once made, is irrevocable. If an employee terminates employment after making the election, then upon his or her subsequent re-employment under this Article with the same municipality, the original election shall automatically be reinstated.
    A police officer who does not elect to participate in the self-managed plan within the permitted time shall participate in the defined benefit plan otherwise provided under this Article.
    The employer shall not remit contributions to the fund on behalf of an eligible employee until the earlier of the expiration of the employee's 6-month election period or the date on which the employee submits a properly completed election to the employer or to the fund.
    (c) Each eligible employee shall be provided with written information prepared or prescribed by the fund, describing the employee's retirement program choices. The eligible employee shall be offered an opportunity to receive counseling from the fund prior to making his or her election. This counseling may consist of videotaped materials, group presentations, individual consultation with an employee or authorized representative of the fund in person or by telephone or other electronic means, or any combination of these methods.
(Source: P.A. 91-939, eff. 2-1-01.)

40 ILCS 5/3-109.3

    (40 ILCS 5/3-109.3)
    Sec. 3-109.3. Self-managed plan.
    (a) Purpose. The General Assembly finds that it is important for municipalities to be able to attract and retain the most qualified police officers and that in order to attract and retain these police officers, municipalities should have the flexibility to provide a defined contribution plan as an alternative for eligible employees who elect not to participate in a defined benefit retirement program provided under this Article. Accordingly, a self-managed plan shall be provided, which shall offer participating employees the opportunity to accumulate assets for retirement through a combination of employee and employer contributions that may be invested in mutual funds, collective investment funds, or other investment products and used to purchase annuity contracts, either fixed or variable, or a combination thereof. The plan must be qualified under the Internal Revenue Code of 1986.
    (b) Study by Commission; Adoption of plan. The Illinois Pension Laws Commission (or its successor, the Commission on Government Forecasting and Accountability) shall study and evaluate the creation of a statewide self-managed plan for eligible employees under this Article. The Commission shall report its findings and recommendations to the General Assembly no later than January 1, 2002.
    In accordance with the recommendations of the Commission and any action taken by the General Assembly in response to those recommendations, a statewide self-managed plan shall be adopted for eligible employees under this Article. The self-managed plan shall take effect as specified in the plan, but in no event earlier than July 1, 2002 or the date of its approval by the U.S. Internal Revenue Service, whichever occurs later.
    The self-managed plan shall include a plan document and shall provide for the adoption of such rules and procedures as are necessary or desirable for the administration of the self-managed plan. Consistent with fiduciary duty to the participants and beneficiaries of the self-managed plan, it may provide for delegation of suitable aspects of plan administration to companies authorized to do business in this State.
    (c) Selection of service providers and funding vehicles. The principal administrator of the self-managed plan shall solicit proposals to provide administrative services and funding vehicles for the self-managed plan from insurance and annuity companies and mutual fund companies, banks, trust companies, or other financial institutions authorized to do business in this State. In reviewing the proposals received and approving and contracting with no fewer than 2 and no more than 7 companies, the principal administrator shall consider, among other things, the following criteria:
        (1) the nature and extent of the benefits that would
    
be provided to the participants;
        (2) the reasonableness of the benefits in relation to
    
the premium charged;
        (3) the suitability of the benefits to the needs and
    
interests of the participating employees and the employer;
        (4) the ability of the company to provide benefits
    
under the contract and the financial stability of the company; and
        (5) the efficacy of the contract in the recruitment
    
and retention of employees.
    The principal administrator shall periodically review each approved company. A company may continue to provide administrative services and funding vehicles for the self-managed plan only so long as it continues to be an approved company under contract with the principal administrator.
    (d) Employee Direction. Employees who are participating in the program must be allowed to direct the transfer of their account balances among the various investment options offered, subject to applicable contractual provisions. The participant shall not be deemed a fiduciary by reason of providing such investment direction. A person who is a fiduciary shall not be liable for any loss resulting from such investment direction and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. The self-managed plan does not guarantee any of the investments in the employee's account balances.
    (e) Participation. An eligible employee must make a written election in accordance with the provisions of Section 3-109.2 and the procedures established under the self-managed plan. Participation in the self-managed plan by an eligible employee who elects to participate in the self-managed plan shall begin on the first day of the first pay period following the later of the date the employee's election is filed with the fund or the employer, but in no event sooner than the effective date of the self-managed plan.
    A police officer who has elected to participate in the self-managed plan under this Section must continue participation while employed in an eligible position, and may not participate in any other retirement program administered by the municipality while employed as a police officer by that municipality. Participation in the self-managed plan under this Section shall constitute membership in an Article 3 pension fund.
    (f) No Duplication of Service Credit. Notwithstanding any other provision of this Article, a police officer may not purchase or receive service or service credit applicable to any other retirement program administered by a fund under this Article for any period during which the police officer was a participant in the self-managed plan established under this Section.
    (g) Contributions. The self-managed plan shall be funded by contributions from participants in the self-managed plan and employer contributions as provided in this Section.
    The contribution rate for a participant in the self-managed plan under this Section shall be a minimum of 10% of his or her salary. This required contribution shall be made as an "employer pick-up" under Section 414(h) of the Internal Revenue Code of 1986 or any successor Section thereof. An employee may make additional contributions to the self-managed plan in accordance with the terms of the plan.
    The self-managed plan shall provide for employer contributions to be credited to each self-managed plan participant at a rate of 10% of the participating employee's salary, less the amount of the employer contribution used to provide disability benefits for the employee. The amounts so credited shall be paid into the participant's self-managed plan accounts in the manner prescribed by the plan.
    An amount of employer contribution, not exceeding 1.5% of the participating employee's salary, shall be used for the purpose of providing disability benefits to the participating employee. Prior to the beginning of each plan year under the self-managed plan, the principal administrator shall determine, as a percentage of salary, the amount of employer contributions to be allocated during that plan year for providing disability benefits for employees in the self-managed plan.
    (h) Vesting; Withdrawal; Return to Service. A participant in the self-managed plan becomes fully vested in the employer contributions credited to his or her account in the self-managed plan on the earliest to occur of the following:
        (1) completion of 6 years of service with the
    
municipality; or
        (2) the death of the participating employee while
    
employed by the municipality, if the participant has completed at least 1.5 years of service.
    A participant in the self-managed plan who receives a distribution of his or her vested amounts from the self-managed plan upon or after termination of employment shall forfeit all service credit and accrued rights in the fund of his or her employer; if subsequently re-employed, the participant shall be considered a new employee. If a former participant again becomes a participating employee and continues as such for at least 2 years, all such rights, service credit, and previous status as a participant shall be restored upon repayment of the amount of the distribution without interest.
    (i) Benefit amounts. If a participating employee who is fully vested in employer contributions terminates employment, the participating employee shall be entitled to a benefit which is based on the account values attributable to both employer and employee contributions and any investment return thereon.
    If a participating employee who is not fully vested in employer contributions terminates employment, the employee shall be entitled to a benefit based on the account values attributable to the employee's contributions and any investment return thereon, plus the following percentage of employer contributions and any investment return thereon: 20% after the second year; 40% after the third year; 60% after the fourth year; 80% after the fifth year; and 100% after the sixth year. The remainder of employer contributions and investment return thereon shall be forfeited. Any employer contributions that are forfeited shall be held in escrow by the company investing those contributions and shall be used as directed by the municipality for future allocations of employer contributions or for the restoration of amounts previously forfeited by former participants who again become participating employees.
(Source: P.A. 93-632, eff. 2-1-04; 93-1067, eff. 1-15-05.)

40 ILCS 5/3-109.4

    (40 ILCS 5/3-109.4)
    Sec. 3-109.4. Defined contribution plan for certain police officers.
    (a) Each municipality shall establish a defined contribution plan that aggregates police officer and employer contributions in individual accounts used for retirement. The defined contribution plan, including both police officer and employer contributions, established by the municipality must, at a minimum: meet the safe harbor provisions of the Internal Revenue Code of 1986, as amended; be a qualified plan under the Internal Revenue Code of 1986, as amended; and comply with all other applicable laws, rules, and regulations. Contributions shall vest immediately upon deposit in the police officer's account.
    A police officer who participates in the defined contribution plan under this Section may not earn creditable service or otherwise participate in the defined benefit plan offered by his or her employing municipality, except as an annuitant in another fund or as a survivor, while he or she is a participant in the defined contribution plan. The defined contribution plan under this Section shall not be construed to be a pension, annuity, or other defined benefit under this Code.
    (b) If a police officer who has more than 10 years of creditable service in a fund enters active service with a different municipality, he or she may elect to participate in the defined contribution plan under this Section in lieu of the defined benefit plan.
    A police officer who has elected under this subsection to participate in the defined contribution plan may, in writing, rescind that election in accordance with the rules of the board. Any employer contributions, and the earnings thereon, shall remain vested in the police officer's account. A police officer who rescinds the election may begin participating in the defined benefit plan on the first day of the month following the rescission.
    (c) As used in this Section, "defined benefit plan" means the retirement plan available to police officers under this Article who do not participate in the defined contribution plan under this Section.
(Source: P.A. 100-281, eff. 8-24-17.)

40 ILCS 5/3-110

    (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
    Sec. 3-110. Creditable service.
    (a) "Creditable service" is the time served by a police officer as a member of a regularly constituted police force of a municipality. In computing creditable service furloughs without pay exceeding 30 days shall not be counted, but all leaves of absence for illness or accident, regardless of length, and all periods of disability retirement for which a police officer has received no disability pension payments under this Article shall be counted.
    (a-5) Up to 3 years of time during which the police officer receives a disability pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 shall be counted as creditable service, provided that (i) the police officer returns to active service after the disability for a period at least equal to the period for which credit is to be established and (ii) the police officer makes contributions to the fund based on the rates specified in Section 3-125.1 and the salary upon which the disability pension is based. These contributions may be paid at any time prior to the commencement of a retirement pension. The police officer may, but need not, elect to have the contributions deducted from the disability pension or to pay them in installments on a schedule approved by the board. If not deducted from the disability pension, the contributions shall include interest at the rate of 6% per year, compounded annually, from the date for which service credit is being established to the date of payment. If contributions are paid under this subsection (a-5) in excess of those needed to establish the credit, the excess shall be refunded. This subsection (a-5) applies to persons receiving a disability pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on the effective date of this amendatory Act of the 91st General Assembly, as well as persons who begin to receive such a disability pension after that date.
    (b) Creditable service includes all periods of service in the military, naval or air forces of the United States entered upon while an active police officer of a municipality, provided that upon applying for a permanent pension, and in accordance with the rules of the board, the police officer pays into the fund the amount the officer would have contributed if he or she had been a regular contributor during such period, to the extent that the municipality which the police officer served has not made such contributions in the officer's behalf. The total amount of such creditable service shall not exceed 5 years, except that any police officer who on July 1, 1973 had more than 5 years of such creditable service shall receive the total amount thereof.
    (b-5) Creditable service includes all periods of service in the military, naval, or air forces of the United States entered upon before beginning service as an active police officer of a municipality, provided that, in accordance with the rules of the board, the police officer pays into the fund the amount the police officer would have contributed if he or she had been a regular contributor during such period, plus an amount determined by the Board to be equal to the municipality's normal cost of the benefit, plus interest at the actuarially assumed rate calculated from the date the employee last became a police officer under this Article. The total amount of such creditable service shall not exceed 2 years.
    (c) Creditable service also includes service rendered by a police officer while on leave of absence from a police department to serve as an executive of an organization whose membership consists of members of a police department, subject to the following conditions: (i) the police officer is a participant of a fund established under this Article with at least 10 years of service as a police officer; (ii) the police officer received no credit for such service under any other retirement system, pension fund, or annuity and benefit fund included in this Code; (iii) pursuant to the rules of the board the police officer pays to the fund the amount he or she would have contributed had the officer been an active member of the police department; (iv) the organization pays a contribution equal to the municipality's normal cost for that period of service; and (v) for all leaves of absence under this subsection (c), including those beginning before the effective date of this amendatory Act of the 97th General Assembly, the police officer continues to remain in sworn status, subject to the professional standards of the public employer or those terms established in statute.
        (d)(1) Creditable service also includes periods of
    
service originally established in another police pension fund under this Article or in the Fund established under Article 7 of this Code for which (i) the contributions have been transferred under Section 3-110.7 or Section 7-139.9 and (ii) any additional contribution required under paragraph (2) of this subsection has been paid in full in accordance with the requirements of this subsection (d).
        (2) If the board of the pension fund to which
    
creditable service and related contributions are transferred under Section 7-139.9 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then in order to establish that creditable service the police officer must pay to the pension fund, within the payment period specified in paragraph (3) of this subsection, an additional contribution equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection. If the board of the pension fund to which creditable service and related contributions are transferred under Section 3-110.7 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then the police officer may elect (A) to establish that creditable service by paying to the pension fund, within the payment period specified in paragraph (3) of this subsection (d), an additional contribution equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection (d) or (B) to have his or her creditable service reduced by an amount equal to the difference between the amount transferred under Section 3-110.7 and the true cost to the pension fund of allowing that creditable service to be established, as determined by the board in accordance with the rules and procedures adopted under paragraph (6) of this subsection (d).
        (3) Except as provided in paragraph (4), the
    
additional contribution that is required or elected under paragraph (2) of this subsection (d) must be paid to the board (i) within 5 years from the date of the transfer of contributions under Section 3-110.7 or 7-139.9 and (ii) before the police officer terminates service with the fund. The additional contribution may be paid in a lump sum or in accordance with a schedule of installment payments authorized by the board.
        (4) If the police officer dies in service before
    
payment in full has been made and before the expiration of the 5-year payment period, the surviving spouse of the officer may elect to pay the unpaid amount on the officer's behalf within 6 months after the date of death, in which case the creditable service shall be granted as though the deceased police officer had paid the remaining balance on the day before the date of death.
        (5) If the additional contribution that is required
    
or elected under paragraph (2) of this subsection (d) is not paid in full within the required time, the creditable service shall not be granted and the police officer (or the officer's surviving spouse or estate) shall be entitled to receive a refund of (i) any partial payment of the additional contribution that has been made by the police officer and (ii) those portions of the amounts transferred under subdivision (a)(1) of Section 3-110.7 or subdivisions (a)(1) and (a)(3) of Section 7-139.9 that represent employee contributions paid by the police officer (but not the accumulated interest on those contributions) and interest paid by the police officer to the prior pension fund in order to reinstate service terminated by acceptance of a refund.
        At the time of paying a refund under this item (5),
    
the pension fund shall also repay to the pension fund from which the contributions were transferred under Section 3-110.7 or 7-139.9 the amount originally transferred under subdivision (a)(2) of that Section, plus interest at the rate of 6% per year, compounded annually, from the date of the original transfer to the date of repayment. Amounts repaid to the Article 7 fund under this provision shall be credited to the appropriate municipality.
        Transferred credit that is not granted due to failure
    
to pay the additional contribution within the required time is lost; it may not be transferred to another pension fund and may not be reinstated in the pension fund from which it was transferred.
        (6) The Public Employee Pension Fund Division of the
    
Department of Insurance shall establish by rule the manner of making the calculation required under paragraph (2) of this subsection, taking into account the appropriate actuarial assumptions; the police officer's service, age, and salary history; the level of funding of the pension fund to which the credits are being transferred; and any other factors that the Division determines to be relevant. The rules may require that all calculations made under paragraph (2) be reported to the Division by the board performing the calculation, together with documentation of the creditable service to be transferred, the amounts of contributions and interest to be transferred, the manner in which the calculation was performed, the numbers relied upon in making the calculation, the results of the calculation, and any other information the Division may deem useful.
        (e)(1) Creditable service also includes periods of
    
service originally established in the Fund established under Article 7 of this Code for which the contributions have been transferred under Section 7-139.11.
        (2) If the board of the pension fund to which
    
creditable service and related contributions are transferred under Section 7-139.11 determines that the amount transferred is less than the true cost to the pension fund of allowing that creditable service to be established, then the amount of creditable service the police officer may establish under this subsection (e) shall be reduced by an amount equal to the difference, as determined by the board in accordance with the rules and procedures adopted under paragraph (3) of this subsection.
        (3) The Public Pension Division of the Department of
    
Financial and Professional Regulation shall establish by rule the manner of making the calculation required under paragraph (2) of this subsection, taking into account the appropriate actuarial assumptions; the police officer's service, age, and salary history; the level of funding of the pension fund to which the credits are being transferred; and any other factors that the Division determines to be relevant. The rules may require that all calculations made under paragraph (2) be reported to the Division by the board performing the calculation, together with documentation of the creditable service to be transferred, the amounts of contributions and interest to be transferred, the manner in which the calculation was performed, the numbers relied upon in making the calculation, the results of the calculation, and any other information the Division may deem useful.
        (4) Until January 1, 2010, a police officer who
    
transferred service from the Fund established under Article 7 of this Code under the provisions of Public Act 94-356 may establish additional credit, but only for the amount of the service credit reduction in that transfer, as calculated under paragraph (3) of this subsection (e). This credit may be established upon payment by the police officer of an amount to be determined by the board, equal to (1) the amount that would have been contributed as employee and employer contributions had all of the service been as an employee under this Article, plus interest thereon at the rate of 6% per year, compounded annually from the date of service to the date of transfer, less (2) the total amount transferred from the Article 7 Fund, plus (3) interest on the difference at the rate of 6% per year, compounded annually, from the date of the transfer to the date of payment. The additional service credit is allowed under this amendatory Act of the 95th General Assembly notwithstanding the provisions of Article 7 terminating all transferred credits on the date of transfer.
(Source: P.A. 96-297, eff. 8-11-09; 96-1260, eff. 7-23-10; 97-651, eff. 1-5-12.)

40 ILCS 5/3-110.2

    (40 ILCS 5/3-110.2) (from Ch. 108 1/2, par. 3-110.2)
    Sec. 3-110.2. Transfer of creditable service to General Assembly Retirement System. (a) An active member of the General Assembly Retirement System may apply to transfer his or her credits and creditable service accumulated in any police pension fund under this Article to the General Assembly Retirement System. Such transfer shall be made forthwith. Payment by the police pension fund to the General Assembly Retirement System shall be made at the same time and shall consist of:
    (1) the amounts credited to the applicant, through employee contributions on the date of transfer; and
    (2) municipality contributions equal to the accumulated employee contributions as determined under subparagraph (1) above. Participation in the police pension fund shall terminate on the date of transfer.
    (b) An active member of the General Assembly may reinstate service and creditable service terminated upon receipt of a refund, by payment to the fund of the amount of the refund together with interest thereon at the rate of 6% per year to the date of payment.
(Source: P.A. 83-1440.)

40 ILCS 5/3-110.3

    (40 ILCS 5/3-110.3) (from Ch. 108 1/2, par. 3-110.3)
    Sec. 3-110.3. Transfer to IMRF.
    (a) Any person who has made an election under Section 3-109.1, and until July 1, 1993, any active member of the Illinois Municipal Retirement Fund who is a county clerk, may apply for transfer of his creditable service accumulated in any police pension fund under this Article to the Illinois Municipal Retirement Fund. The creditable service shall be transferred upon payment by the police pension fund to the Illinois Municipal Retirement Fund of an amount equal to:
        (1) the amounts accumulated to the credit of the
    
applicant on the books of the fund on the date of transfer; and
        (2) employer contributions in an amount equal to the
    
amount determined under subparagraph (1); and
        (3) any interest paid by the applicant in order to
    
reinstate service.
    Participation in this Fund shall terminate on the date of transfer.
    (b) Any person who has made an election under Section 3-109.1, and until July 1, 1993, any such county clerk, may reinstate service which was terminated by receipt of a refund, by payment to the police pension fund of the amount of the refund with interest thereon at the rate of 6% per year, compounded annually, from the date of refund to the date of payment.
(Source: P.A. 86-273; 87-1265.)

40 ILCS 5/3-110.4

    (40 ILCS 5/3-110.4) (from Ch. 108 1/2, par. 3-110.4)
    Sec. 3-110.4. Transfer of creditable service to Article 8, 9 or 13 fund.
    (a) Any city officer as defined in Section 8-243.2 of this Code, any county officer elected by vote of the people who is a participant in a pension fund established under Article 9 of this Code, any chief of the County Police Department or undersheriff of the County Sheriff's Department who has elected under subparagraph (j) of Section 9-128.1 to be included within the provisions of Section 9-128.1 of Article 9 of this Code, and any elected sanitary district commissioner who is a participant in a pension fund established under Article 13 of this Code, may apply to transfer his or her credits and creditable service accumulated in any police pension fund established under this Article to such Article 8, 9 or 13 fund. Such transfer shall be made forthwith. Payment by the police pension fund to the Article 8, 9 or 13 fund shall be made at the same time and shall consist of:
        (1) the amounts credited to the applicant through
    
employee contributions on the date of transfer; and
        (2) municipality contributions equal to the
    
accumulated employee contributions as determined under item (1) above.
Participation in the police pension fund shall terminate on the date of transfer.
    (b) Any such elected city officer, county officer, chief of the County Police Department, undersheriff of the County Sheriff's Department, or sanitary district commissioner may reinstate credits and creditable service terminated upon receipt of a refund, by payment to the fund of the amount of the refund together with interest thereon at the rate of 6% per year, compounded annually from the date of refund to the date of payment.
(Source: P.A. 89-643, eff. 8-9-96.)

40 ILCS 5/3-110.5

    (40 ILCS 5/3-110.5) (from Ch. 108 1/2, par. 3-110.5)
    Sec. 3-110.5. Transfer to Article 14 system.
    (a) Until January 1, 1990, any active member of the State Employees' Retirement System who is a State policeman and until July 1, 1998, any active member of the State Employees' Retirement System who is a security employee of the Department of Corrections may apply for transfer of his or her creditable service accumulated in any police pension fund under this Article to the State Employees' Retirement System. Such creditable service shall be transferred only upon payment by such police pension fund to the State Employees' Retirement System of an amount equal to:
        (1) the amounts accumulated to the credit of the
    
applicant on the books of the fund on the date of transfer; and
        (2) employer contributions in an amount equal to the
    
amount determined under subparagraph (1); and
        (3) any interest paid by the applicant in order to
    
reinstate service.
Participation in this Fund shall terminate on the date of transfer.
    (b) Until January 1, 1990, any such State policeman and until July 1, 1998, any such security employee of the Department of Corrections may reinstate service which was terminated by receipt of a refund, by payment to the police pension fund of the amount of the refund with interest thereon at the rate of 6% per year, compounded annually, from the date of refund to the date of payment.
(Source: P.A. 90-32, eff. 6-27-97.)

40 ILCS 5/3-110.6

    (40 ILCS 5/3-110.6) (from Ch. 108 1/2, par. 3-110.6)
    Sec. 3-110.6. Transfer to Article 14 System.
    (a) Any active member of the State Employees' Retirement System who is a State policeman, an investigator for the Secretary of State, a conservation police officer, an investigator for the Office of the Attorney General, an investigator for the Department of Revenue, an investigator for the Office of the State's Attorneys Appellate Prosecutor, or a controlled substance inspector may apply for transfer of some or all of his or her creditable service accumulated in any police pension fund under this Article to the State Employees' Retirement System in accordance with Section 14-110. The creditable service shall be transferred only upon payment by the police pension fund to the State Employees' Retirement System of an amount equal to:
        (1) the amounts accumulated to the credit of the
    
applicant for the service to be transferred on the books of the fund on the date of transfer; and
        (2) employer contributions in an amount equal to the
    
amount determined under subparagraph (1); and
        (3) any interest paid by the applicant in order to
    
reinstate service to be transferred.
Participation in the police pension fund with respect to the service to be transferred shall terminate on the date of transfer.
    (b) Any person applying to transfer service under this Section may reinstate service that was terminated by receipt of a refund, by paying to the police pension fund the amount of the refund with interest thereon at the actuarially assumed rate of interest, compounded annually, from the date of refund to the date of payment.
(Source: P.A. 95-530, eff. 8-28-07; 96-745, eff. 8-25-09.)

40 ILCS 5/3-110.7

    (40 ILCS 5/3-110.7)
    Sec. 3-110.7. Transfer between Article 3 funds.
    (a) An active member of a pension fund established under this Article may apply for transfer to that fund of his or her creditable service and related contributions accumulated in any other police pension fund established under this Article, except that a police officer may not transfer creditable service under this Section from a pension fund unless (i) the police officer actively served in the police department under that fund for at least 2 years, (ii) the police officer actively served in the police department under that fund for less than 2 years but was laid off or otherwise involuntarily terminated for a reason other than the fault of the officer, or (iii) the police officer was not in service in the police department under that fund on or after the effective date of this Section. Upon receiving the application, that other pension fund shall transfer to the pension fund in which the applicant currently participates an amount equal to:
        (1) the amounts actually contributed by or on behalf
    
of the applicant to the fund as employee contributions (including any interest paid by the applicant in order to reinstate service), plus interest on those amounts at the rate of 6% per year, compounded annually, from the date of contribution to the date of transfer; plus
        (2) an amount representing employer contributions,
    
equal to the total amount determined under subdivision (1).
Participation in that other pension fund shall terminate on the date of transfer.
    (b) An active member of a pension fund established under this Article may reinstate service in any other pension fund established under this Article that was terminated by receipt of a refund, by paying to that other pension fund the amount of the refund plus interest thereon at the rate of 6% per year, compounded annually, from the date of refund to the date of payment.
(Source: P.A. 90-460, eff. 8-17-97.)

40 ILCS 5/3-110.8

    (40 ILCS 5/3-110.8)
    Sec. 3-110.8. Transfer to IMRF.
    (a) Until 60 days after the effective date of this amendatory Act of the 97th General Assembly, any active member of the Illinois Municipal Retirement Fund may apply to transfer up to 10 years of creditable service in a police pension fund under this Article to the Illinois Municipal Retirement Fund. The creditable service shall be transferred upon payment by the police pension fund to the Illinois Municipal Retirement Fund of an amount equal to:
        (1) the amounts accumulated to the credit of the
    
applicant on the books of the fund on the date of transfer; and
        (2) employer contributions in an amount equal to the
    
amount determined under subparagraph (1); and
        (3) any interest paid by the applicant in order to
    
reinstate service.
Creditable service transferred to the Illinois Municipal Retirement Fund under this Section shall terminate on the date of the transfer.
    (b) Until 60 days after the effective date of this amendatory Act of the 97th General Assembly, any active member of the Illinois Municipal Retirement Fund may reinstate all or any portion of his or her service that was terminated by receipt of a refund, by payment to the police pension fund of the amount of the refund with interest thereon at the actuarially assumed rate, compounded annually, from the date of refund to the date of payment.
(Source: P.A. 97-273, eff. 8-8-11.)

40 ILCS 5/3-110.9

    (40 ILCS 5/3-110.9)
    Sec. 3-110.9. Transfer to Article 9.
    (a) Until 6 months after the effective date of this amendatory Act of the 95th General Assembly, any active member of a pension fund established under Article 9 of this Code may apply for transfer of up to 6 years of his or her creditable service accumulated in any police pension fund under this Article to the Article 9 fund. Such creditable service shall be transferred only upon payment by such police pension fund to the Article 9 fund of an amount equal to:
        (1) the amounts accumulated to the credit of the
    
applicant on the books of the fund on the date of transfer; and
        (2) employer contributions in an amount equal to the
    
amount determined under subparagraph (1); and
        (3) any interest paid by the applicant in order to
    
reinstate service.
    Participation in the police pension fund shall terminate on the date of transfer.
    (b) Until 6 months after the effective date of this amendatory Act of the 95th General Assembly, any active member of an Article 9 fund may reinstate service that was terminated by receipt of a refund, by payment to the police pension fund of the amount of the refund with interest thereon at the rate of 6% per year, compounded annually, from the date of refund to the date of payment.
(Source: P.A. 95-504, eff. 8-28-07; 95-876, eff. 8-21-08.)

40 ILCS 5/3-110.10

    (40 ILCS 5/3-110.10)
    Sec. 3-110.10. Transfer from Article 7. Until January 1, 2009, a person may transfer to a fund established under this Article up to 8 years of creditable service accumulated under Article 7 of this Code upon payment to the fund of an amount to be determined by the board, equal to (i) the difference between the amount of employee and employer contributions transferred to the fund under Section 7-139.11 and the amounts that would have been contributed had such contributions been made at the rates applicable to an employee under this Article, plus (ii) interest thereon at the actuarially assumed rate, compounded annually, from the date of service to the date of payment.
(Source: P.A. 95-530, eff. 8-28-07; 95-876, eff. 8-21-08; 95-1036, eff. 2-17-09.)

40 ILCS 5/3-110.11

    (40 ILCS 5/3-110.11)
    Sec. 3-110.11. Transfer of creditable service from Article 5 fund. For a period of 60 days after the effective date of this Section, a person may transfer to a fund established under this Article up to 10 years of creditable service accumulated under Article 5 of this Code upon payment to the fund of an amount to be determined by the board, equal to (i) the difference between the amount of employee and employer contributions transferred to the fund under Section 5-237.5 and the amounts that would have been contributed had such contributions been made at the rates applicable to an employee under this Article, plus (ii) interest thereon at the actuarially assumed rate, compounded annually, from the date of service to the date of payment.
(Source: P.A. 97-326, eff. 8-12-11.)

40 ILCS 5/3-111

    (40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111)
    Sec. 3-111. Pension.
    (a) A police officer age 50 or more with 20 or more years of creditable service, who is not a participant in the self-managed plan under Section 3-109.3 and who is no longer in service