Bill Amendment: IL SB1300 | 2019-2020 | 101st General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: PEN CD-COOK COUNTY-FUNDING

Status: 2019-12-18 - Public Act . . . . . . . . . 101-0610 [SB1300 Detail]

Download: Illinois-2019-SB1300-House_Amendment_005.html

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Rep. Jay Hoffman

Filed: 11/11/2019

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AMENDMENT TO SENATE BILL 1300
AMENDMENT NO. ______. Amend Senate Bill 1300 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Finance Authority Act is amended
by changing Sections 801-10, 801-40, and 805-20 as follows:
(20 ILCS 3501/801-10)
Sec. 801-10. Definitions. The following terms, whenever
used or referred to in this Act, shall have the following
meanings, except in such instances where the context may
clearly indicate otherwise:
(a) The term "Authority" means the Illinois Finance
Authority created by this Act.
(b) The term "project" means an industrial project,
conservation project, housing project, public purpose project,
higher education project, health facility project, cultural
institution project, municipal bond program project, PACE

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Project, agricultural facility or agribusiness, and "project"
may include any combination of one or more of the foregoing
undertaken jointly by any person with one or more other
persons.
(c) The term "public purpose project" means (i) any project
or facility, including without limitation land, buildings,
structures, machinery, equipment and all other real and
personal property, which is authorized or required by law to be
acquired, constructed, improved, rehabilitated, reconstructed,
replaced or maintained by any unit of government or any other
lawful public purpose, including provision of working capital,
which is authorized or required by law to be undertaken by any
unit of government or (ii) costs incurred and other
expenditures, including expenditures for management,
investment, or working capital costs, incurred in connection
with the reform, consolidation, or implementation of the
transition process as described in Articles 22B and 22C of the
Illinois Pension Code.
(d) The term "industrial project" means the acquisition,
construction, refurbishment, creation, development or
redevelopment of any facility, equipment, machinery, real
property or personal property for use by any instrumentality of
the State or its political subdivisions, for use by any person
or institution, public or private, for profit or not for
profit, or for use in any trade or business, including, but not
limited to, any industrial, manufacturing or commercial

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enterprise that is located within or outside the State,
provided that, with respect to a project involving property
located outside the State, the property must be owned,
operated, leased or managed by an entity located within the
State or an entity affiliated with an entity located within the
State, and which is (1) a capital project, including, but not
limited to: (i) land and any rights therein, one or more
buildings, structures or other improvements, machinery and
equipment, whether now existing or hereafter acquired, and
whether or not located on the same site or sites; (ii) all
appurtenances and facilities incidental to the foregoing,
including, but not limited to, utilities, access roads,
railroad sidings, track, docking and similar facilities,
parking facilities, dockage, wharfage, railroad roadbed,
track, trestle, depot, terminal, switching and signaling or
related equipment, site preparation and landscaping; and (iii)
all non-capital costs and expenses relating thereto or (2) any
addition to, renovation, rehabilitation or improvement of a
capital project or (3) any activity or undertaking within or
outside the State, provided that, with respect to a project
involving property located outside the State, the property must
be owned, operated, leased or managed by an entity located
within the State or an entity affiliated with an entity located
within the State, which the Authority determines will aid,
assist or encourage economic growth, development or
redevelopment within the State or any area thereof, will

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promote the expansion, retention or diversification of
employment opportunities within the State or any area thereof
or will aid in stabilizing or developing any industry or
economic sector of the State economy. The term "industrial
project" also means the production of motion pictures.
(e) The term "bond" or "bonds" shall include bonds, notes
(including bond, grant or revenue anticipation notes),
certificates and/or other evidences of indebtedness
representing an obligation to pay money, including refunding
bonds.
(f) The terms "lease agreement" and "loan agreement" shall
mean: (i) an agreement whereby a project acquired by the
Authority by purchase, gift or lease is leased to any person,
corporation or unit of local government which will use or cause
the project to be used as a project as heretofore defined upon
terms providing for lease rental payments at least sufficient
to pay when due all principal of, interest and premium, if any,
on any bonds of the Authority issued with respect to such
project, providing for the maintenance, insuring and operation
of the project on terms satisfactory to the Authority,
providing for disposition of the project upon termination of
the lease term, including purchase options or abandonment of
the premises, and such other terms as may be deemed desirable
by the Authority, or (ii) any agreement pursuant to which the
Authority agrees to loan the proceeds of its bonds issued with
respect to a project or other funds of the Authority to any

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person which will use or cause the project to be used as a
project as heretofore defined upon terms providing for loan
repayment installments at least sufficient to pay when due all
principal of, interest and premium, if any, on any bonds of the
Authority, if any, issued with respect to the project, and
providing for maintenance, insurance and other matters as may
be deemed desirable by the Authority.
(g) The term "financial aid" means the expenditure of
Authority funds or funds provided by the Authority through the
issuance of its bonds, notes or other evidences of indebtedness
or from other sources for the development, construction,
acquisition or improvement of a project.
(h) The term "person" means an individual, corporation,
unit of government, business trust, estate, trust, partnership
or association, 2 or more persons having a joint or common
interest, or any other legal entity.
(i) The term "unit of government" means the federal
government, the State or unit of local government, a school
district, or any agency or instrumentality, office, officer,
department, division, bureau, commission, college or
university thereof.
(j) The term "health facility" means: (a) any public or
private institution, place, building, or agency required to be
licensed under the Hospital Licensing Act; (b) any public or
private institution, place, building, or agency required to be
licensed under the Nursing Home Care Act, the Specialized

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Mental Health Rehabilitation Act of 2013, the ID/DD Community
Care Act, or the MC/DD Act; (c) any public or licensed private
hospital as defined in the Mental Health and Developmental
Disabilities Code; (d) any such facility exempted from such
licensure when the Director of Public Health attests that such
exempted facility meets the statutory definition of a facility
subject to licensure; (e) any other public or private health
service institution, place, building, or agency which the
Director of Public Health attests is subject to certification
by the Secretary, U.S. Department of Health and Human Services
under the Social Security Act, as now or hereafter amended, or
which the Director of Public Health attests is subject to
standard-setting by a recognized public or voluntary
accrediting or standard-setting agency; (f) any public or
private institution, place, building or agency engaged in
providing one or more supporting services to a health facility;
(g) any public or private institution, place, building or
agency engaged in providing training in the healing arts,
including, but not limited to, schools of medicine, dentistry,
osteopathy, optometry, podiatry, pharmacy or nursing, schools
for the training of x-ray, laboratory or other health care
technicians and schools for the training of para-professionals
in the health care field; (h) any public or private congregate,
life or extended care or elderly housing facility or any public
or private home for the aged or infirm, including, without
limitation, any Facility as defined in the Life Care Facilities

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Act; (i) any public or private mental, emotional or physical
rehabilitation facility or any public or private educational,
counseling, or rehabilitation facility or home, for those
persons with a developmental disability, those who are
physically ill or disabled, the emotionally disturbed, those
persons with a mental illness or persons with learning or
similar disabilities or problems; (j) any public or private
alcohol, drug or substance abuse diagnosis, counseling
treatment or rehabilitation facility, (k) any public or private
institution, place, building or agency licensed by the
Department of Children and Family Services or which is not so
licensed but which the Director of Children and Family Services
attests provides child care, child welfare or other services of
the type provided by facilities subject to such licensure; (l)
any public or private adoption agency or facility; and (m) any
public or private blood bank or blood center. "Health facility"
also means a public or private structure or structures suitable
primarily for use as a laboratory, laundry, nurses or interns
residence or other housing or hotel facility used in whole or
in part for staff, employees or students and their families,
patients or relatives of patients admitted for treatment or
care in a health facility, or persons conducting business with
a health facility, physician's facility, surgicenter,
administration building, research facility, maintenance,
storage or utility facility and all structures or facilities
related to any of the foregoing or required or useful for the

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operation of a health facility, including parking or other
facilities or other supporting service structures required or
useful for the orderly conduct of such health facility. "Health
facility" also means, with respect to a project located outside
the State, any public or private institution, place, building,
or agency which provides services similar to those described
above, provided that such project is owned, operated, leased or
managed by a participating health institution located within
the State, or a participating health institution affiliated
with an entity located within the State.
(k) The term "participating health institution" means (i) a
private corporation or association or (ii) a public entity of
this State, in either case authorized by the laws of this State
or the applicable state to provide or operate a health facility
as defined in this Act and which, pursuant to the provisions of
this Act, undertakes the financing, construction or
acquisition of a project or undertakes the refunding or
refinancing of obligations, loans, indebtedness or advances as
provided in this Act.
(l) The term "health facility project", means a specific
health facility work or improvement to be financed or
refinanced (including without limitation through reimbursement
of prior expenditures), acquired, constructed, enlarged,
remodeled, renovated, improved, furnished, or equipped, with
funds provided in whole or in part hereunder, any accounts
receivable, working capital, liability or insurance cost or

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operating expense financing or refinancing program of a health
facility with or involving funds provided in whole or in part
hereunder, or any combination thereof.
(m) The term "bond resolution" means the resolution or
resolutions authorizing the issuance of, or providing terms and
conditions related to, bonds issued under this Act and
includes, where appropriate, any trust agreement, trust
indenture, indenture of mortgage or deed of trust providing
terms and conditions for such bonds.
(n) The term "property" means any real, personal or mixed
property, whether tangible or intangible, or any interest
therein, including, without limitation, any real estate,
leasehold interests, appurtenances, buildings, easements,
equipment, furnishings, furniture, improvements, machinery,
rights of way, structures, accounts, contract rights or any
interest therein.
(o) The term "revenues" means, with respect to any project,
the rents, fees, charges, interest, principal repayments,
collections and other income or profit derived therefrom.
(p) The term "higher education project" means, in the case
of a private institution of higher education, an educational
facility to be acquired, constructed, enlarged, remodeled,
renovated, improved, furnished, or equipped, or any
combination thereof.
(q) The term "cultural institution project" means, in the
case of a cultural institution, a cultural facility to be

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acquired, constructed, enlarged, remodeled, renovated,
improved, furnished, or equipped, or any combination thereof.
(r) The term "educational facility" means any property
located within the State, or any property located outside the
State, provided that, if the property is located outside the
State, it must be owned, operated, leased or managed by an
entity located within the State or an entity affiliated with an
entity located within the State, in each case constructed or
acquired before or after the effective date of this Act, which
is or will be, in whole or in part, suitable for the
instruction, feeding, recreation or housing of students, the
conducting of research or other work of a private institution
of higher education, the use by a private institution of higher
education in connection with any educational, research or
related or incidental activities then being or to be conducted
by it, or any combination of the foregoing, including, without
limitation, any such property suitable for use as or in
connection with any one or more of the following: an academic
facility, administrative facility, agricultural facility,
assembly hall, athletic facility, auditorium, boating
facility, campus, communication facility, computer facility,
continuing education facility, classroom, dining hall,
dormitory, exhibition hall, fire fighting facility, fire
prevention facility, food service and preparation facility,
gymnasium, greenhouse, health care facility, hospital,
housing, instructional facility, laboratory, library,

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maintenance facility, medical facility, museum, offices,
parking area, physical education facility, recreational
facility, research facility, stadium, storage facility,
student union, study facility, theatre or utility.
(s) The term "cultural facility" means any property located
within the State, or any property located outside the State,
provided that, if the property is located outside the State, it
must be owned, operated, leased or managed by an entity located
within the State or an entity affiliated with an entity located
within the State, in each case constructed or acquired before
or after the effective date of this Act, which is or will be,
in whole or in part, suitable for the particular purposes or
needs of a cultural institution, including, without
limitation, any such property suitable for use as or in
connection with any one or more of the following: an
administrative facility, aquarium, assembly hall, auditorium,
botanical garden, exhibition hall, gallery, greenhouse,
library, museum, scientific laboratory, theater or zoological
facility, and shall also include, without limitation, books,
works of art or music, animal, plant or aquatic life or other
items for display, exhibition or performance. The term
"cultural facility" includes buildings on the National
Register of Historic Places which are owned or operated by
nonprofit entities.
(t) "Private institution of higher education" means a
not-for-profit educational institution which is not owned by

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the State or any political subdivision, agency,
instrumentality, district or municipality thereof, which is
authorized by law to provide a program of education beyond the
high school level and which:
(1) Admits as regular students only individuals having
a certificate of graduation from a high school, or the
recognized equivalent of such a certificate;
(2) Provides an educational program for which it awards
a bachelor's degree, or provides an educational program,
admission into which is conditioned upon the prior
attainment of a bachelor's degree or its equivalent, for
which it awards a postgraduate degree, or provides not less
than a 2-year program which is acceptable for full credit
toward such a degree, or offers a 2-year program in
engineering, mathematics, or the physical or biological
sciences which is designed to prepare the student to work
as a technician and at a semiprofessional level in
engineering, scientific, or other technological fields
which require the understanding and application of basic
engineering, scientific, or mathematical principles or
knowledge;
(3) Is accredited by a nationally recognized
accrediting agency or association or, if not so accredited,
is an institution whose credits are accepted, on transfer,
by not less than 3 institutions which are so accredited,
for credit on the same basis as if transferred from an

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institution so accredited, and holds an unrevoked
certificate of approval under the Private College Act from
the Board of Higher Education, or is qualified as a "degree
granting institution" under the Academic Degree Act; and
(4) Does not discriminate in the admission of students
on the basis of race or color. "Private institution of
higher education" also includes any "academic
institution".
(u) The term "academic institution" means any
not-for-profit institution which is not owned by the State or
any political subdivision, agency, instrumentality, district
or municipality thereof, which institution engages in, or
facilitates academic, scientific, educational or professional
research or learning in a field or fields of study taught at a
private institution of higher education. Academic institutions
include, without limitation, libraries, archives, academic,
scientific, educational or professional societies,
institutions, associations or foundations having such
purposes.
(v) The term "cultural institution" means any
not-for-profit institution which is not owned by the State or
any political subdivision, agency, instrumentality, district
or municipality thereof, which institution engages in the
cultural, intellectual, scientific, educational or artistic
enrichment of the people of the State. Cultural institutions
include, without limitation, aquaria, botanical societies,

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historical societies, libraries, museums, performing arts
associations or societies, scientific societies and zoological
societies.
(w) The term "affiliate" means, with respect to financing
of an agricultural facility or an agribusiness, any lender, any
person, firm or corporation controlled by, or under common
control with, such lender, and any person, firm or corporation
controlling such lender.
(x) The term "agricultural facility" means land, any
building or other improvement thereon or thereto, and any
personal properties deemed necessary or suitable for use,
whether or not now in existence, in farming, ranching, the
production of agricultural commodities (including, without
limitation, the products of aquaculture, hydroponics and
silviculture) or the treating, processing or storing of such
agricultural commodities when such activities are customarily
engaged in by farmers as a part of farming and which land,
building, improvement or personal property is located within
the State, or is located outside the State, provided that, if
such property is located outside the State, it must be owned,
operated, leased, or managed by an entity located within the
State or an entity affiliated with an entity located within the
State.
(y) The term "lender" with respect to financing of an
agricultural facility or an agribusiness, means any federal or
State chartered bank, Federal Land Bank, Production Credit

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Association, Bank for Cooperatives, federal or State chartered
savings and loan association or building and loan association,
Small Business Investment Company or any other institution
qualified within this State to originate and service loans,
including, but without limitation to, insurance companies,
credit unions and mortgage loan companies. "Lender" also means
a wholly owned subsidiary of a manufacturer, seller or
distributor of goods or services that makes loans to businesses
or individuals, commonly known as a "captive finance company".
(z) The term "agribusiness" means any sole proprietorship,
limited partnership, co-partnership, joint venture,
corporation or cooperative which operates or will operate a
facility located within the State or outside the State,
provided that, if any facility is located outside the State, it
must be owned, operated, leased, or managed by an entity
located within the State or an entity affiliated with an entity
located within the State, that is related to the processing of
agricultural commodities (including, without limitation, the
products of aquaculture, hydroponics and silviculture) or the
manufacturing, production or construction of agricultural
buildings, structures, equipment, implements, and supplies, or
any other facilities or processes used in agricultural
production. Agribusiness includes but is not limited to the
following:
(1) grain handling and processing, including grain
storage, drying, treatment, conditioning, mailing and

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packaging;
(2) seed and feed grain development and processing;
(3) fruit and vegetable processing, including
preparation, canning and packaging;
(4) processing of livestock and livestock products,
dairy products, poultry and poultry products, fish or
apiarian products, including slaughter, shearing,
collecting, preparation, canning and packaging;
(5) fertilizer and agricultural chemical
manufacturing, processing, application and supplying;
(6) farm machinery, equipment and implement
manufacturing and supplying;
(7) manufacturing and supplying of agricultural
commodity processing machinery and equipment, including
machinery and equipment used in slaughter, treatment,
handling, collecting, preparation, canning or packaging of
agricultural commodities;
(8) farm building and farm structure manufacturing,
construction and supplying;
(9) construction, manufacturing, implementation,
supplying or servicing of irrigation, drainage and soil and
water conservation devices or equipment;
(10) fuel processing and development facilities that
produce fuel from agricultural commodities or byproducts;
(11) facilities and equipment for processing and
packaging agricultural commodities specifically for

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export;
(12) facilities and equipment for forestry product
processing and supplying, including sawmilling operations,
wood chip operations, timber harvesting operations, and
manufacturing of prefabricated buildings, paper, furniture
or other goods from forestry products;
(13) facilities and equipment for research and
development of products, processes and equipment for the
production, processing, preparation or packaging of
agricultural commodities and byproducts.
(aa) The term "asset" with respect to financing of any
agricultural facility or any agribusiness, means, but is not
limited to the following: cash crops or feed on hand; livestock
held for sale; breeding stock; marketable bonds and securities;
securities not readily marketable; accounts receivable; notes
receivable; cash invested in growing crops; net cash value of
life insurance; machinery and equipment; cars and trucks; farm
and other real estate including life estates and personal
residence; value of beneficial interests in trusts; government
payments or grants; and any other assets.
(bb) The term "liability" with respect to financing of any
agricultural facility or any agribusiness shall include, but
not be limited to the following: accounts payable; notes or
other indebtedness owed to any source; taxes; rent; amounts
owed on real estate contracts or real estate mortgages;
judgments; accrued interest payable; and any other liability.

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(cc) The term "Predecessor Authorities" means those
authorities as described in Section 845-75.
(dd) The term "housing project" means a specific work or
improvement located within the State or outside the State and
undertaken to provide residential dwelling accommodations,
including the acquisition, construction or rehabilitation of
lands, buildings and community facilities and in connection
therewith to provide nonhousing facilities which are part of
the housing project, including land, buildings, improvements,
equipment and all ancillary facilities for use for offices,
stores, retirement homes, hotels, financial institutions,
service, health care, education, recreation or research
establishments, or any other commercial purpose which are or
are to be related to a housing development, provided that any
work or improvement located outside the State is owned,
operated, leased or managed by an entity located within the
State, or any entity affiliated with an entity located within
the State.
(ee) The term "conservation project" means any project
including the acquisition, construction, rehabilitation,
maintenance, operation, or upgrade that is intended to create
or expand open space or to reduce energy usage through
efficiency measures. For the purpose of this definition, "open
space" has the definition set forth under Section 10 of the
Illinois Open Land Trust Act.
(ff) The term "significant presence" means the existence

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within the State of the national or regional headquarters of an
entity or group or such other facility of an entity or group of
entities where a significant amount of the business functions
are performed for such entity or group of entities.
(gg) The term "municipal bond issuer" means the State or
any other state or commonwealth of the United States, or any
unit of local government, school district, agency or
instrumentality, office, department, division, bureau,
commission, college or university thereof located in the State
or any other state or commonwealth of the United States.
(hh) The term "municipal bond program project" means a
program for the funding of the purchase of bonds, notes or
other obligations issued by or on behalf of a municipal bond
issuer.
(ii) The term "participating lender" means any trust
company, bank, savings bank, credit union, merchant bank,
investment bank, broker, investment trust, pension fund,
building and loan association, savings and loan association,
insurance company, venture capital company, or other
institution approved by the Authority which provides a portion
of the financing for a project.
(jj) The term "loan participation" means any loan in which
the Authority co-operates with a participating lender to
provide all or a portion of the financing for a project.
(kk) The term "PACE Project" means an energy project as
defined in Section 5 of the Property Assessed Clean Energy Act.

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(Source: P.A. 99-180, eff. 7-29-15; 100-919, eff. 8-17-18.)
(20 ILCS 3501/801-40)
Sec. 801-40. In addition to the powers otherwise authorized
by law and in addition to the foregoing general corporate
powers, the Authority shall also have the following additional
specific powers to be exercised in furtherance of the purposes
of this Act.
(a) The Authority shall have power (i) to accept grants,
loans or appropriations from the federal government or the
State, or any agency or instrumentality thereof, to be used for
the operating expenses of the Authority, or for any purposes of
the Authority, including the making of direct loans of such
funds with respect to projects, and (ii) to enter into any
agreement with the federal government or the State, or any
agency or instrumentality thereof, in relationship to such
grants, loans or appropriations.
(b) The Authority shall have power to procure and enter
into contracts for any type of insurance and indemnity
agreements covering loss or damage to property from any cause,
including loss of use and occupancy, or covering any other
insurable risk.
(c) The Authority shall have the continuing power to issue
bonds for its corporate purposes. Bonds may be issued by the
Authority in one or more series and may provide for the payment
of any interest deemed necessary on such bonds, of the costs of

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issuance of such bonds, of any premium on any insurance, or of
the cost of any guarantees, letters of credit or other similar
documents, may provide for the funding of the reserves deemed
necessary in connection with such bonds, and may provide for
the refunding or advance refunding of any bonds or for accounts
deemed necessary in connection with any purpose of the
Authority. The bonds may bear interest payable at any time or
times and at any rate or rates, notwithstanding any other
provision of law to the contrary, and such rate or rates may be
established by an index or formula which may be implemented or
established by persons appointed or retained therefor by the
Authority, or may bear no interest or may bear interest payable
at maturity or upon redemption prior to maturity, may bear such
date or dates, may be payable at such time or times and at such
place or places, may mature at any time or times not later than
40 years from the date of issuance, may be sold at public or
private sale at such time or times and at such price or prices,
may be secured by such pledges, reserves, guarantees, letters
of credit, insurance contracts or other similar credit support
or liquidity instruments, may be executed in such manner, may
be subject to redemption prior to maturity, may provide for the
registration of the bonds, and may be subject to such other
terms and conditions all as may be provided by the resolution
or indenture authorizing the issuance of such bonds. The holder
or holders of any bonds issued by the Authority may bring suits
at law or proceedings in equity to compel the performance and

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observance by any person or by the Authority or any of its
agents or employees of any contract or covenant made with the
holders of such bonds and to compel such person or the
Authority and any of its agents or employees to perform any
duties required to be performed for the benefit of the holders
of any such bonds by the provision of the resolution
authorizing their issuance, and to enjoin such person or the
Authority and any of its agents or employees from taking any
action in conflict with any such contract or covenant.
Notwithstanding the form and tenor of any such bonds and in the
absence of any express recital on the face thereof that it is
non-negotiable, all such bonds shall be negotiable
instruments. Pending the preparation and execution of any such
bonds, temporary bonds may be issued as provided by the
resolution. The bonds shall be sold by the Authority in such
manner as it shall determine. The bonds may be secured as
provided in the authorizing resolution by the receipts,
revenues, income and other available funds of the Authority and
by any amounts derived by the Authority from the loan agreement
or lease agreement with respect to the project or projects; and
bonds may be issued as general obligations of the Authority
payable from such revenues, funds and obligations of the
Authority as the bond resolution shall provide, or may be
issued as limited obligations with a claim for payment solely
from such revenues, funds and obligations as the bond
resolution shall provide. The Authority may grant a specific

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pledge or assignment of and lien on or security interest in
such rights, revenues, income, or amounts and may grant a
specific pledge or assignment of and lien on or security
interest in any reserves, funds or accounts established in the
resolution authorizing the issuance of bonds. Any such pledge,
assignment, lien or security interest for the benefit of the
holders of the Authority's bonds shall be valid and binding
from the time the bonds are issued without any physical
delivery or further act, and shall be valid and binding as
against and prior to the claims of all other parties having
claims against the Authority or any other person irrespective
of whether the other parties have notice of the pledge,
assignment, lien or security interest. As evidence of such
pledge, assignment, lien and security interest, the Authority
may execute and deliver a mortgage, trust agreement, indenture
or security agreement or an assignment thereof. A remedy for
any breach or default of the terms of any such agreement by the
Authority may be by mandamus proceedings in any court of
competent jurisdiction to compel the performance and
compliance therewith, but the agreement may prescribe by whom
or on whose behalf such action may be instituted. It is
expressly understood that the Authority may, but need not,
acquire title to any project with respect to which it exercises
its authority.
(d) With respect to the powers granted by this Act, the
Authority may adopt rules and regulations prescribing the

10100SB1300ham005 - 24 - LRB101 07899 RPS 64619 a
procedures by which persons may apply for assistance under this
Act. Nothing herein shall be deemed to preclude the Authority,
prior to the filing of any formal application, from conducting
preliminary discussions and investigations with respect to the
subject matter of any prospective application.
(e) The Authority shall have power to acquire by purchase,
lease, gift or otherwise any property or rights therein from
any person useful for its purposes, whether improved for the
purposes of any prospective project, or unimproved. The
Authority may also accept any donation of funds for its
purposes from any such source. The Authority shall have no
independent power of condemnation but may acquire any property
or rights therein obtained upon condemnation by any other
authority, governmental entity or unit of local government with
such power.
(f) The Authority shall have power to develop, construct
and improve either under its own direction, or through
collaboration with any approved applicant, or to acquire
through purchase or otherwise, any project, using for such
purpose the proceeds derived from the sale of its bonds or from
governmental loans or grants, and to hold title in the name of
the Authority to such projects.
(g) The Authority shall have power to lease pursuant to a
lease agreement any project so developed and constructed or
acquired to the approved tenant on such terms and conditions as
may be appropriate to further the purposes of this Act and to

10100SB1300ham005 - 25 - LRB101 07899 RPS 64619 a
maintain the credit of the Authority. Any such lease may
provide for either the Authority or the approved tenant to
assume initially, in whole or in part, the costs of
maintenance, repair and improvements during the leasehold
period. In no case, however, shall the total rentals from any
project during any initial leasehold period or the total loan
repayments to be made pursuant to any loan agreement, be less
than an amount necessary to return over such lease or loan
period (1) all costs incurred in connection with the
development, construction, acquisition or improvement of the
project and for repair, maintenance and improvements thereto
during the period of the lease or loan; provided, however, that
the rentals or loan repayments need not include costs met
through the use of funds other than those obtained by the
Authority through the issuance of its bonds or governmental
loans; (2) a reasonable percentage additive to be agreed upon
by the Authority and the borrower or tenant to cover a properly
allocable portion of the Authority's general expenses,
including, but not limited to, administrative expenses,
salaries and general insurance, and (3) an amount sufficient to
pay when due all principal of, interest and premium, if any on,
any bonds issued by the Authority with respect to the project.
The portion of total rentals payable under clause (3) of this
subsection (g) shall be deposited in such special accounts,
including all sinking funds, acquisition or construction
funds, debt service and other funds as provided by any

10100SB1300ham005 - 26 - LRB101 07899 RPS 64619 a
resolution, mortgage or trust agreement of the Authority
pursuant to which any bond is issued.
(h) The Authority has the power, upon the termination of
any leasehold period of any project, to sell or lease for a
further term or terms such project on such terms and conditions
as the Authority shall deem reasonable and consistent with the
purposes of the Act. The net proceeds from all such sales and
the revenues or income from such leases shall be used to
satisfy any indebtedness of the Authority with respect to such
project and any balance may be used to pay any expenses of the
Authority or be used for the further development, construction,
acquisition or improvement of projects. In the event any
project is vacated by a tenant prior to the termination of the
initial leasehold period, the Authority shall sell or lease the
facilities of the project on the most advantageous terms
available. The net proceeds of any such disposition shall be
treated in the same manner as the proceeds from sales or the
revenues or income from leases subsequent to the termination of
any initial leasehold period.
(i) The Authority shall have the power to make loans, or to
purchase loan participations in loans made, to persons to
finance a project, to enter into loan agreements or agreements
with participating lenders with respect thereto, and to accept
guarantees from persons of its loans or the resultant evidences
of obligations of the Authority.
(j) The Authority may fix, determine, charge and collect

10100SB1300ham005 - 27 - LRB101 07899 RPS 64619 a
any premiums, fees, charges, costs and expenses, including,
without limitation, any application fees, commitment fees,
program fees, financing charges or publication fees from any
person in connection with its activities under this Act.
(k) In addition to the funds established as provided
herein, the Authority shall have the power to create and
establish such reserve funds and accounts as may be necessary
or desirable to accomplish its purposes under this Act and to
deposit its available monies into the funds and accounts.
(l) At the request of the governing body of any unit of
local government, the Authority is authorized to market such
local government's revenue bond offerings by preparing bond
issues for sale, advertising for sealed bids, receiving bids at
its offices, making the award to the bidder that offers the
most favorable terms or arranging for negotiated placements or
underwritings of such securities. The Authority may, at its
discretion, offer for concurrent sale the revenue bonds of
several local governments. Sales by the Authority of revenue
bonds under this Section shall in no way imply State guarantee
of such debt issue. The Authority may require such financial
information from participating local governments as it deems
necessary in order to carry out the purposes of this subsection
(1).
(m) The Authority may make grants to any county to which
Division 5-37 of the Counties Code is applicable to assist in
the financing of capital development, construction and

10100SB1300ham005 - 28 - LRB101 07899 RPS 64619 a
renovation of new or existing facilities for hospitals and
health care facilities under that Act. Such grants may only be
made from funds appropriated for such purposes from the Build
Illinois Bond Fund.
(n) The Authority may establish an urban development action
grant program for the purpose of assisting municipalities in
Illinois which are experiencing severe economic distress to
help stimulate economic development activities needed to aid in
economic recovery. The Authority shall determine the types of
activities and projects for which the urban development action
grants may be used, provided that such projects and activities
are broadly defined to include all reasonable projects and
activities the primary objectives of which are the development
of viable urban communities, including decent housing and a
suitable living environment, and expansion of economic
opportunity, principally for persons of low and moderate
incomes. The Authority shall enter into grant agreements from
monies appropriated for such purposes from the Build Illinois
Bond Fund. The Authority shall monitor the use of the grants,
and shall provide for audits of the funds as well as recovery
by the Authority of any funds determined to have been spent in
violation of this subsection (n) or any rule or regulation
promulgated hereunder. The Authority shall provide technical
assistance with regard to the effective use of the urban
development action grants. The Authority shall file an annual
report to the General Assembly concerning the progress of the

10100SB1300ham005 - 29 - LRB101 07899 RPS 64619 a
grant program.
(o) The Authority may establish a Housing Partnership
Program whereby the Authority provides zero-interest loans to
municipalities for the purpose of assisting in the financing of
projects for the rehabilitation of affordable multi-family
housing for low and moderate income residents. The Authority
may provide such loans only upon a municipality's providing
evidence that it has obtained private funding for the
rehabilitation project. The Authority shall provide 3 State
dollars for every 7 dollars obtained by the municipality from
sources other than the State of Illinois. The loans shall be
made from monies appropriated for such purpose from the Build
Illinois Bond Fund. The total amount of loans available under
the Housing Partnership Program shall not exceed $30,000,000.
State loan monies under this subsection shall be used only for
the acquisition and rehabilitation of existing buildings
containing 4 or more dwelling units. The terms of any loan made
by the municipality under this subsection shall require
repayment of the loan to the municipality upon any sale or
other transfer of the project. In addition, the Authority may
use any moneys appropriated for such purpose from the Build
Illinois Bond Fund, including funds loaned under this
subsection and repaid as principal or interest, and investment
income on such funds, to make the loans authorized by
subsection (z), without regard to any restrictions or
limitations provided in this subsection.

10100SB1300ham005 - 30 - LRB101 07899 RPS 64619 a
(p) The Authority may award grants to universities and
research institutions, research consortiums and other
not-for-profit entities for the purposes of: remodeling or
otherwise physically altering existing laboratory or research
facilities, expansion or physical additions to existing
laboratory or research facilities, construction of new
laboratory or research facilities or acquisition of modern
equipment to support laboratory or research operations
provided that such grants (i) be used solely in support of
project and equipment acquisitions which enhance technology
transfer, and (ii) not constitute more than 60 percent of the
total project or acquisition cost.
(q) Grants may be awarded by the Authority to units of
local government for the purpose of developing the appropriate
infrastructure or defraying other costs to the local government
in support of laboratory or research facilities provided that
such grants may not exceed 40% of the cost to the unit of local
government.
(r) In addition to the powers granted to the Authority
under subsection (i), and in all cases supplemental to it, the
Authority may establish a direct loan program to make loans to,
or may purchase participations in loans made by participating
lenders to, individuals, partnerships, corporations, or other
business entities for the purpose of financing an industrial
project, as defined in Section 801-10 of this Act. For the
purposes of such program and not by way of limitation on any

10100SB1300ham005 - 31 - LRB101 07899 RPS 64619 a
other program of the Authority, including, without limitation,
programs established under subsection (i), the Authority shall
have the power to issue bonds, notes, or other evidences of
indebtedness including commercial paper for purposes of
providing a fund of capital from which it may make such loans.
The Authority shall have the power to use any appropriations
from the State made especially for the Authority's direct loan
program, or moneys at any time held by the Authority under this
Act outside the State treasury in the custody of either the
Treasurer of the Authority or a trustee or depository appointed
by the Authority, for additional capital to make such loans or
purchase such loan participations, or for the purposes of
reserve funds or pledged funds which secure the Authority's
obligations of repayment of any bond, note or other form of
indebtedness established for the purpose of providing capital
for which it intends to make such loans or purchase such loan
participations. For the purpose of obtaining such capital, the
Authority may also enter into agreements with financial
institutions, participating lenders, and other persons for the
purpose of administering a loan participation program, selling
loans or developing a secondary market for such loans or loan
participations. Loans made under the direct loan program
specifically established under this subsection (r), including
loans under such program made by participating lenders in which
the Authority purchases a participation, may be in an amount
not to exceed $600,000 and shall be made for a portion of an

10100SB1300ham005 - 32 - LRB101 07899 RPS 64619 a
industrial project which does not exceed 50% of the total
project. No loan may be made by the Authority unless approved
by the affirmative vote of at least 8 members of the board. The
Authority shall establish procedures and publish rules which
shall provide for the submission, review, and analysis of each
direct loan and loan participation application and which shall
preserve the ability of each board member and the Executive
Director, as applicable, to reach an individual business
judgment regarding the propriety of each direct loan or loan
participation. The collective discretion of the board to
approve or disapprove each loan shall be unencumbered. The
Authority may establish and collect such fees and charges,
determine and enforce such terms and conditions, and charge
such interest rates as it determines to be necessary and
appropriate to the successful administration of the direct loan
program, including purchasing loan participations. The
Authority may require such interests in collateral and such
guarantees as it determines are necessary to protect the
Authority's interest in the repayment of the principal and
interest of each loan and loan participation made under the
direct loan program. The restrictions established under this
subsection (r) shall not be applicable to any loan or loan
participation made under subsection (i) or to any loan or loan
participation made under any other Section of this Act.
(s) The Authority may guarantee private loans to third
parties up to a specified dollar amount in order to promote

10100SB1300ham005 - 33 - LRB101 07899 RPS 64619 a
economic development in this State.
(t) The Authority may adopt rules and regulations as may be
necessary or advisable to implement the powers conferred by
this Act.
(u) The Authority shall have the power to issue bonds,
notes or other evidences of indebtedness, which may be used to
make loans to units of local government which are authorized to
enter into loan agreements and other documents and to issue
bonds, notes and other evidences of indebtedness for the
purpose of financing the protection of storm sewer outfalls,
the construction of adequate storm sewer outfalls, and the
provision for flood protection of sanitary sewage treatment
plans, in counties that have established a stormwater
management planning committee in accordance with Section
5-1062 of the Counties Code. Any such loan shall be made by the
Authority pursuant to the provisions of Section 820-5 to 820-60
of this Act. The unit of local government shall pay back to the
Authority the principal amount of the loan, plus annual
interest as determined by the Authority. The Authority shall
have the power, subject to appropriations by the General
Assembly, to subsidize or buy down a portion of the interest on
such loans, up to 4% per annum.
(v) The Authority may accept security interests as provided
in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.
(w) Moral Obligation. In the event that the Authority
determines that monies of the Authority will not be sufficient

10100SB1300ham005 - 34 - LRB101 07899 RPS 64619 a
for the payment of the principal of and interest on its bonds
during the next State fiscal year, the Chairperson, as soon as
practicable, shall certify to the Governor the amount required
by the Authority to enable it to pay such principal of and
interest on the bonds. The Governor shall submit the amount so
certified to the General Assembly as soon as practicable, but
no later than the end of the current State fiscal year. This
subsection shall apply only to any bonds or notes as to which
the Authority shall have determined, in the resolution
authorizing the issuance of the bonds or notes, that this
subsection shall apply. Whenever the Authority makes such a
determination, that fact shall be plainly stated on the face of
the bonds or notes and that fact shall also be reported to the
Governor. In the event of a withdrawal of moneys from a reserve
fund established with respect to any issue or issues of bonds
of the Authority to pay principal or interest on those bonds,
the Chairperson of the Authority, as soon as practicable, shall
certify to the Governor the amount required to restore the
reserve fund to the level required in the resolution or
indenture securing those bonds. The Governor shall submit the
amount so certified to the General Assembly as soon as
practicable, but no later than the end of the current State
fiscal year. The Authority shall obtain written approval from
the Governor for any bonds and notes to be issued under this
Section. In addition to any other bonds authorized to be issued
under Sections 825-60, 825-65(e), 830-25 and 845-5, the

10100SB1300ham005 - 35 - LRB101 07899 RPS 64619 a
principal amount of Authority bonds outstanding issued under
this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS
360/2-6(c), which have been assumed by the Authority, shall not
exceed $150,000,000. This subsection (w) shall in no way be
applied to any bonds issued by the Authority on behalf of the
Illinois Power Agency under Section 825-90 of this Act.
(x) The Authority may enter into agreements or contracts
with any person necessary or appropriate to place the payment
obligations of the Authority under any of its bonds in whole or
in part on any interest rate basis, cash flow basis, or other
basis desired by the Authority, including without limitation
agreements or contracts commonly known as "interest rate swap
agreements", "forward payment conversion agreements", and
"futures", or agreements or contracts to exchange cash flows or
a series of payments, or agreements or contracts, including
without limitation agreements or contracts commonly known as
"options", "puts", or "calls", to hedge payment, rate spread,
or similar exposure; provided that any such agreement or
contract shall not constitute an obligation for borrowed money
and shall not be taken into account under Section 845-5 of this
Act or any other debt limit of the Authority or the State of
Illinois.
(y) The Authority shall publish summaries of projects and
actions approved by the members of the Authority on its
website. These summaries shall include, but not be limited to,
information regarding the:

10100SB1300ham005 - 36 - LRB101 07899 RPS 64619 a
(1) project;
(2) Board's action or actions;
(3) purpose of the project;
(4) Authority's program and contribution;
(5) volume cap;
(6) jobs retained;
(7) projected new jobs;
(8) construction jobs created;
(9) estimated sources and uses of funds;
(10) financing summary;
(11) project summary;
(12) business summary;
(13) ownership or economic disclosure statement;
(14) professional and financial information;
(15) service area; and
(16) legislative district.
The disclosure of information pursuant to this subsection
shall comply with the Freedom of Information Act.
(z) Consistent with the findings and declaration of policy
set forth in item (j) of Section 801-5 of this Act, the
Authority shall have the power to make loans to the Police
Officers' Pension Investment Fund authorized by Section
22B-120 of the Illinois Pension Code and to make loans to the
Firefighters' Pension Investment Fund authorized by Section
22C-120 of the Illinois Pension Code. Notwithstanding anything
in this Act to the contrary, loans authorized by Section

10100SB1300ham005 - 37 - LRB101 07899 RPS 64619 a
22B-120 and Section 22C-120 of the Illinois Pension Code may be
made from any of the Authority's funds, including, but not
limited to, funds in its Illinois Housing Partnership Program
Fund, its Industrial Project Insurance Fund, or its Illinois
Venture Investment Fund.
(Source: P.A. 100-919, eff. 8-17-18.)
(20 ILCS 3501/805-20)
Sec. 805-20. Powers and Duties; Industrial Project
Insurance Program. The Authority has the power:
(a) to insure and make advance commitments to insure
all or any part of the payments required on the bonds
issued or a loan made to finance any environmental facility
under the Illinois Environmental Facilities Financing Act
or for any industrial project upon such terms and
conditions as the Authority may prescribe in accordance
with this Article. The insurance provided by the Authority
shall be payable solely from the Fund created by Section
805-15 and shall not constitute a debt or pledge of the
full faith and credit of the State, the Authority, or any
political subdivision thereof;
(b) to enter into insurance contracts, letters of
credit or any other agreements or contracts with financial
institutions with respect to the Fund and any bonds or
loans insured thereunder. Any such agreement or contract
may contain terms and provisions necessary or desirable in

10100SB1300ham005 - 38 - LRB101 07899 RPS 64619 a
connection with the program, subject to the requirements
established by this Act, including without limitation
terms and provisions relating to loan documentation,
review and approval procedures, origination and servicing
rights and responsibilities, default conditions,
procedures and obligations with respect to insurance
contracts made under this Act. The agreements or contracts
may be executed on an individual, group or master contract
basis with financial institutions;
(c) to charge reasonable fees to defray the cost of
obtaining letters of credit or other similar documents,
other than insurance contracts under paragraph (b). Any
such fees shall be payable by such person, in such amounts
and at such times as the Authority shall determine, and the
amount of the fees need not be uniform among the various
bonds or loans insured;
(d) to fix insurance premiums for the insurance of
payments under the provisions of this Article. Such
premiums shall be computed as determined by the Authority.
Any premiums for the insurance of loan payments under the
provisions of this Act shall be payable by such person, in
such amounts and at such times as the Authority shall
determine, and the amount of the premiums need not be
uniform among the various bonds or loans insured;
(e) to establish application fees and prescribe
application, notification, contract and insurance forms,

10100SB1300ham005 - 39 - LRB101 07899 RPS 64619 a
rules and regulations it deems necessary or appropriate;
(f) to make loans and to issue bonds secured by
insurance or other agreements authorized by paragraphs (a)
and (b) of this Section 805-20 and to issue bonds secured
by loans that are guaranteed by the federal government or
agencies thereof;
(g) to issue a single bond issue, or a series of bond
issues, for a group of industrial projects, a group of
corporations, or a group of business entities or any
combination thereof insured by insurance or backed by any
other agreement authorized by paragraphs (a) and (b) of
this Section or secured by loans that are guaranteed by the
federal government or agencies thereof;
(h) to enter into trust agreements for the management
of the Fund created under Section 805-15 of this Act;
(i) to exercise such other powers as are necessary or
incidental to the powers granted in this Section and to the
issuance of State Guarantees under Article 830 of this Act;
and
(j) at the discretion of the Authority, (i) to insure
and make advance commitments to insure, and issue State
Guarantees for, all or any part of the payments required on
the bonds issued or loans made to finance any agricultural
facility, project, farmer, producer, agribusiness,
qualified veteran-owned small business, or program under
Article 830 or Article 835 of this Act upon such terms and

10100SB1300ham005 - 40 - LRB101 07899 RPS 64619 a
conditions as the Authority may prescribe in accordance
with this Article or (ii) to make loans authorized by
subsection (z) of Section 801-40 of this Act upon such
terms and conditions as the Authority may prescribe,
consistent with Sections 22B-120 and 22C-120 of the
Illinois Pension Code and without regard to any other
restrictions or limitations provided in this Article. The
insurance and State Guarantees provided by the Authority
may be payable from the Fund created by Section 805-15 and
is in addition to and not in replacement of the Illinois
Agricultural Loan Guarantee Fund and the Illinois Farmer
and Agribusiness Loan Guarantee Fund created under Article
830 of this Act.
(Source: P.A. 99-509, eff. 6-24-16.)
Section 10. The Illinois Pension Code is amended by
changing Sections 1-109.3, 1-113.12, 1-160, 1A-102, 1A-104,
1A-109, 1A-111, 1A-112, 1A-113, 3-111, 3-112, 3-125, 3-132,
4-109, 4-114, 4-118, 4-123, 7-159, 14-110, 14-152.1, 15-120,
15-135, 15-136, 15-159, 15-198, 16-163, 16-164, and 16-165 and
by adding Sections 1-101.6, 3-124.3, 3-132.1, 4-117.2, and
4-123.2 and Articles 22B and 22C as follows:
(40 ILCS 5/1-101.6 new)
Sec. 1-101.6. Transferor pension fund. "Transferor pension
fund" means any pension fund established pursuant to Article 3

10100SB1300ham005 - 41 - LRB101 07899 RPS 64619 a
or 4 of this Code.
(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 16 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 with respect
to the administration and payment of pension benefits under
Article 1 of the Illinois Pension Code.
(2) Adjudication of pension claims.
(3) (Blank) 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. Any trustee who
has completed the training required under Section 1.05 of the
Open Meetings Act shall not be required to participate in
training concerning item (5) of this subsection. The elected
and appointed trustees of an Article 3 or 4 pension fund who

10100SB1300ham005 - 42 - LRB101 07899 RPS 64619 a
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).
(a-5) In addition to the initial trustee certification
training required under subsection (a), all elected and
appointed trustees who were elected or appointed on or before
the effective date of this amendatory Act of the 101st General
Assembly shall also participate in 4 hours of training on the
changes made by this amendatory Act of the 101st General
Assembly. For trustees of funds under Article 3, this training
shall be conducted at a training facility that is accredited
and affiliated with a State of Illinois certified college or
university. For trustees of funds under Article 4, this
training may be conducted by a fund, the Department of
Insurance, or both a fund and the Department of Insurance. This
training is only required to be completed once by each trustee
required to participate.
(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

10100SB1300ham005 - 43 - LRB101 07899 RPS 64619 a
amendatory Act of the 96th General Assembly, shall also
participate in a minimum of 8 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 5/1-113.12)
Sec. 1-113.12. Application.
(a) Except as provided in subsection (b) of this Section,
Sections 1-113.1 through 1-113.10 apply only to pension funds
established under Article 3 or 4 of this Code.
(b) Upon the transfer of the securities, funds, assets, and

10100SB1300ham005 - 44 - LRB101 07899 RPS 64619 a
moneys of a transferor pension fund to a fund created under
Article 22B or 22C, that pension fund shall no longer exercise
any investment authority with respect to those securities,
funds, assets, and moneys and Sections 1-113.1 through 113.10
shall not apply to those securities, funds, assets, and moneys.
(Source: P.A. 90-507, eff. 8-22-97.)
(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

10100SB1300ham005 - 45 - LRB101 07899 RPS 64619 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
noncovered employee 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.

10100SB1300ham005 - 46 - LRB101 07899 RPS 64619 a
(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,

10100SB1300ham005 - 47 - LRB101 07899 RPS 64619 a
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

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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
subject to this Section on or after July 6, 2017 (the effective
date of Public Act 100-23), notwithstanding any other provision
of this Code to the contrary, is entitled to a retirement
annuity under Article 8 or Article 11 upon written application
if he or she has attained age 65 and has at least 10 years of
service credit 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 payable under Article 8 or
Article 11 to an eligible person subject to subsection (c-5) of
this Section who is retiring at age 60 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 65.

10100SB1300ham005 - 49 - LRB101 07899 RPS 64619 a
(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

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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 service under Article 8 or
Article 11 for eligible persons who: (i) are subject to
subsection (c-5) of this Section; or (ii) 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

10100SB1300ham005 - 51 - LRB101 07899 RPS 64619 a
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

10100SB1300ham005 - 52 - LRB101 07899 RPS 64619 a
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, a conservation police officer, an
investigator for the Secretary of State, an arson investigator,
a Commerce Commission police officer, a security employee of
the Department of Corrections or the Department of Juvenile
Justice, or a security employee of the Department of Innovation
and Technology, as those terms are defined in subsection (b)
and subsection (c) 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

10100SB1300ham005 - 53 - LRB101 07899 RPS 64619 a
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).

10100SB1300ham005 - 54 - LRB101 07899 RPS 64619 a
(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;
100-563, eff. 12-8-17; 100-611, eff. 7-20-18; 100-1166, eff.
1-4-19.)
(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

10100SB1300ham005 - 55 - LRB101 07899 RPS 64619 a
benefits from a pension fund as provided in the Article of this
Code under which the fund is established.
"Consolidated Fund" means: (i) with respect to the pension
funds established under Article 3 of this Code, the Police
Officers' Pension Investment Fund established under Article
22B of this Code; and (ii) with respect to the pension funds
established under Article 4 of this Code, the Firefighters'
Pension Investment Fund established under Article 22C of this
Code.
"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

10100SB1300ham005 - 56 - LRB101 07899 RPS 64619 a
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

10100SB1300ham005 - 57 - LRB101 07899 RPS 64619 a
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.
"Transition period" means the period described in Section
22B-120 with respect to the pension funds established under
Article 3 of this Code and the period described in Section
22C-120 with respect to the pension funds established under
Article 4 of this Code.
"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-104)
Sec. 1A-104. Examinations and investigations.

10100SB1300ham005 - 58 - LRB101 07899 RPS 64619 a
(a) Except as described in the following paragraph with
respect to pension funds established under Article 3 or 4 of
this Code, the 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.
For pension funds established under Article 3 or 4 of this
Code: (i) prior to the conclusion of the transition period, the
Division shall make the periodic examinations and
investigations described in the preceding paragraph; and (ii)
after the conclusion of the transition period, the Division may
accept and rely upon a report of audit or examination of such
pension fund made by an independent certified public accountant
retained by the Consolidated 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

10100SB1300ham005 - 59 - LRB101 07899 RPS 64619 a
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 or the Consolidated Fund, as appropriate,
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

10100SB1300ham005 - 60 - LRB101 07899 RPS 64619 a
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 or the Consolidated Fund, as
appropriate, 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 or the Consolidated Fund, as
appropriate, 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 and to the officers or trustees of the
Consolidated Fund, as appropriate, 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

10100SB1300ham005 - 61 - LRB101 07899 RPS 64619 a
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-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

10100SB1300ham005 - 62 - LRB101 07899 RPS 64619 a
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.
For pension funds under Article 3 or 4 of this Code, after
the conclusion of the transition period, the Consolidated Fund
shall furnish directly to the Division the information
described in items (1) and (6) of this Section and shall
otherwise cooperate with the pension fund in the preparation of
the annual statement.
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-111)
Sec. 1A-111. Actuarial statements by pension funds
established under Article 3 or 4.
(a) For each Each pension fund established under Article 3
or 4 of this Code, a complete actuarial statement applicable to
its plan year shall be included include as part of its annual
statement in accordance with the following: a complete

10100SB1300ham005 - 63 - LRB101 07899 RPS 64619 a
actuarial statement applicable to the plan year.
(1) Prior to the conclusion of the transition period,
if 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.
(2) After the conclusion of the transition period, each
actuarial statement shall be prepared by or under the
supervision of a qualified actuary retained by the
Consolidated Fund and signed by the qualified actuary and
shall contain such information as the Division may by rule
require. The actuarial statement shall be filed with the
Division within 9 months after the close of the fiscal year
of the pension fund.
(a-5) Prior to the conclusion of the transition period, the
actuarial statements may be prepared utilizing the method for
calculating the actuarially required contribution for the
pension fund that was in effect prior to the effective date of
this amendatory Act of the 101st General Assembly.
After the conclusion of the transition period, the
actuarial statements shall be prepared by or under the

10100SB1300ham005 - 64 - LRB101 07899 RPS 64619 a
supervision of a qualified actuary retained by the Consolidated
Fund, and if a change occurs in an actuarial or investment
assumption that increases or decreases the actuarially
required contribution for the pension fund, that change shall
be implemented in equal annual amounts over the 3-year period
beginning in the fiscal year of the pension fund in which such
change first occurs.
The actuarially required contribution as described in this
subsection shall determine the annual required employer
contribution.
(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)
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, (i) prior to the conclusion of the
transition period, the annual compliance fee shall be 0.02% (2
basis points) of the total assets of the pension fund, as

10100SB1300ham005 - 65 - LRB101 07899 RPS 64619 a
reported in the most current annual statement of the fund, but
not more than $8,000 and (ii) after the conclusion of the
transition period, the annual compliance fee shall be $8,000
and shall be paid by the Consolidated Fund. 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.

10100SB1300ham005 - 66 - LRB101 07899 RPS 64619 a
(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)
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

10100SB1300ham005 - 67 - LRB101 07899 RPS 64619 a
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

10100SB1300ham005 - 68 - LRB101 07899 RPS 64619 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

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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.
(f) Subsections (b) and (c) shall apply to pension funds
established under Article 3 or Article 4 of this Code only
prior to the conclusion of the transition period, and this
Section shall not apply to the Consolidated Funds.
(Source: P.A. 90-507, eff. 8-22-97.)
(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

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self-managed plan under Section 3-109.3 and who is no longer in
service as a police officer, shall receive a pension of 1/2 of
the salary attached to the rank held by the officer on the
police force for one year immediately prior to retirement or,
beginning July 1, 1987 for persons terminating service on or
after that date, the salary attached to the rank held on the
last day of service or for one year prior to the last day,
whichever is greater. The pension shall be increased by 2.5% of
such salary for each additional year of service over 20 years
of service through 30 years of service, to a maximum of 75% of
such salary.
The changes made to this subsection (a) by this amendatory
Act of the 91st General Assembly apply to all pensions that
become payable under this subsection on or after January 1,
1999. All pensions payable under this subsection that began on
or after January 1, 1999 and before the effective date of this
amendatory Act shall be recalculated, and the amount of the
increase accruing for that period shall be payable to the
pensioner in a lump sum.
(a-5) No pension in effect on or granted after June 30,
1973 shall be less than $200 per month. Beginning July 1, 1987,
the minimum retirement pension for a police officer having at
least 20 years of creditable service shall be $400 per month,
without regard to whether or not retirement occurred prior to
that date. If the minimum pension established in Section
3-113.1 is greater than the minimum provided in this

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subsection, the Section 3-113.1 minimum controls.
(b) A police officer mandatorily retired from service due
to age by operation of law, having at least 8 but less than 20
years of creditable service, shall receive a pension equal to 2
1/2% of the salary attached to the rank he or she held on the
police force for one year immediately prior to retirement or,
beginning July 1, 1987 for persons terminating service on or
after that date, the salary attached to the rank held on the
last day of service or for one year prior to the last day,
whichever is greater, for each year of creditable service.
A police officer who retires or is separated from service
having at least 8 years but less than 20 years of creditable
service, who is not mandatorily retired due to age by operation
of law, and who does not apply for a refund of contributions at
his or her last separation from police service, shall receive a
pension upon attaining age 60 equal to 2.5% of the salary
attached to the rank held by the police officer on the police
force for one year immediately prior to retirement or,
beginning July 1, 1987 for persons terminating service on or
after that date, the salary attached to the rank held on the
last day of service or for one year prior to the last day,
whichever is greater, for each year of creditable service.
(c) A police officer no longer in service who has at least
one but less than 8 years of creditable service in a police
pension fund but meets the requirements of this subsection (c)
shall be eligible to receive a pension from that fund equal to

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2.5% of the salary attached to the rank held on the last day of
service under that fund or for one year prior to that last day,
whichever is greater, for each year of creditable service in
that fund. The pension shall begin no earlier than upon
attainment of age 60 (or upon mandatory retirement from the
fund by operation of law due to age, if that occurs before age
60) and in no event before the effective date of this
amendatory Act of 1997.
In order to be eligible for a pension under this subsection
(c), the police officer must have at least 8 years of
creditable service in a second police pension fund under this
Article and be receiving a pension under subsection (a) or (b)
of this Section from that second fund. The police officer need
not be in service on or after the effective date of this
amendatory Act of 1997.
(d) Notwithstanding any other provision of this Article,
the provisions of this subsection (d) apply to a person who is
not a participant in the self-managed plan under Section
3-109.3 and who first becomes a police officer under this
Article on or after January 1, 2011.
A police officer age 55 or more who has 10 or more years of
service in that capacity shall be entitled at his option to
receive a monthly pension for his service as a police officer
computed by multiplying 2.5% for each year of such service by
his or her final average salary.
The pension of a police officer who is retiring after

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attaining age 50 with 10 or more years of creditable service
shall be reduced by one-half of 1% for each month that the
police officer's age is under age 55.
The maximum pension under this subsection (d) shall be 75%
of final average salary.
For the purposes of this subsection (d), "final average
salary" means the greater of: (i) the average monthly salary
obtained by dividing the total salary of the police officer
during the 48 96 consecutive months of service within the last
60 120 months of service in which the total salary was the
highest by the number of months of service in that period; or
(ii) the average monthly salary obtained by dividing the total
salary of the police officer during the 96 consecutive months
of service within the last 120 months of service in which the
total salary was the highest by the number of months of service
in that period.
Beginning on January 1, 2011, for all purposes under this
Code (including without limitation the calculation of benefits
and employee contributions), the annual salary 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

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all previous adjustments.
Nothing in this amendatory Act of the 101st General
Assembly shall cause or otherwise result in any retroactive
adjustment of any employee contributions.
(Source: P.A. 96-1495, eff. 1-1-11.)
(40 ILCS 5/3-112) (from Ch. 108 1/2, par. 3-112)
Sec. 3-112. Pension to survivors.
(a) Upon the death of a police officer entitled to a
pension under Section 3-111, the surviving spouse shall be
entitled to the pension to which the police officer was then
entitled. Upon the death of the surviving spouse, or upon the
remarriage of the surviving spouse if that remarriage
terminates the surviving spouse's eligibility under Section
3-121, the police officer's unmarried children who are under
age 18 or who are dependent because of physical or mental
disability shall be entitled to equal shares of such pension.
If there is no eligible surviving spouse and no eligible child,
the dependent parent or parents of the officer shall be
entitled to receive or share such pension until their death or
marriage or remarriage after the death of the police officer.
Notwithstanding any other provision of this Article, for a
person who first becomes a police officer under this Article on
or after January 1, 2011, the pension to which the surviving
spouse, children, or parents are entitled under this subsection
(a) shall be in an the amount equal to the greater of (i) 54% of

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the police officer's monthly salary at the date of death, or
(ii) of 66 2/3% of the police officer's earned pension at the
date of death, and, if there is a surviving spouse, 12% of such
monthly salary shall be granted to the guardian of any minor
child or children, including a child who has been conceived but
not yet born, for each such child until attainment of age 18.
Upon the death of the surviving spouse leaving one or more
minor children, or upon the death of a police officer leaving
one or more minor children but no surviving spouse, a monthly
pension of 20% of the monthly salary shall be granted to the
duly appointed guardian of each such child for the support and
maintenance of each such child until the child reaches age 18.
The total pension provided under this paragraph shall not
exceed 75% of the monthly salary of the deceased police officer
(1) when paid to the survivor of a police officer who has
attained 20 or more years of service credit and who receives or
is eligible to receive a retirement pension under this Article,
(2) when paid to the survivor of a police officer who dies as a
result of illness or accident, (3) when paid to the survivor of
a police officer who dies from any cause while in receipt of a
disability pension under this Article, or (4) when paid to the
survivor of a deferred pensioner. Nothing in this subsection
(a) shall act to diminish the survivor's benefits described in
subsection (e) of this Section.
Notwithstanding Section 1-103.1, the changes made to this
subsection apply without regard to whether the deceased police

10100SB1300ham005 - 76 - LRB101 07899 RPS 64619 a
officer was in service on or after the effective date of this
amendatory Act of the 101st General Assembly.
Notwithstanding any other provision of this Article, the
monthly pension of a survivor of a person who first becomes a
police officer under this Article on or after January 1, 2011
shall be increased on the January 1 after attainment of age 60
by the recipient of the survivor's pension and each January 1
thereafter by 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 pension. If the annual unadjusted percentage change
in the consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the survivor's pension shall not be increased.
For the purposes of this subsection (a), "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 pension funds.
(b) Upon the death of a police officer while in service,
having at least 20 years of creditable service, or upon the

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death of a police officer who retired from service with at
least 20 years of creditable service, whether death occurs
before or after attainment of age 50, the pension earned by the
police officer as of the date of death as provided in Section
3-111 shall be paid to the survivors in the sequence provided
in subsection (a) of this Section.
(c) Upon the death of a police officer while in service,
having at least 10 but less than 20 years of service, a pension
of 1/2 of the salary attached to the rank or ranks held by the
officer for one year immediately prior to death shall be
payable to the survivors in the sequence provided in subsection
(a) of this Section. If death occurs as a result of the
performance of duty, the 10 year requirement shall not apply
and the pension to survivors shall be payable after any period
of service.
(d) Beginning July 1, 1987, a minimum pension of $400 per
month shall be paid to all surviving spouses, without regard to
the fact that the death of the police officer occurred prior to
that date. If the minimum pension established in Section
3-113.1 is greater than the minimum provided in this
subsection, the Section 3-113.1 minimum controls.
(e) The pension of the surviving spouse of a police officer
who dies (i) on or after January 1, 2001, (ii) without having
begun to receive either a retirement pension payable under
Section 3-111 or a disability pension payable under Section
3-114.1, 3-114.2, 3-114.3, or 3-114.6, and (iii) as a result of

10100SB1300ham005 - 78 - LRB101 07899 RPS 64619 a
sickness, accident, or injury incurred in or resulting from the
performance of an act of duty shall not be less than 100% of
the salary attached to the rank held by the deceased police
officer on the last day of service, notwithstanding any
provision in this Article to the contrary.
(Source: P.A. 96-1495, eff. 1-1-11.)
(40 ILCS 5/3-124.3 new)
Sec. 3-124.3. Authority of the fund. Subject to Section
3-141.1, the fund shall retain the exclusive authority to
adjudicate and award disability benefits pursuant to Sections
3-114.1, 3-114.2, and 3-114.3, retirement benefits pursuant to
Section 3-111, and survivor benefits under Sections 3-112 and
3-113.1 and to issue refunds pursuant to Section 3-124. The
exclusive method of judicial review of any final administrative
decision of the fund shall be made in accordance with Section
3-148. A third party, including the Police Officers' Pension
Investment Fund established under Article 22B of this Code,
shall not have the authority to control, alter, or modify, or
the ability to review or intervene in, the proceedings or
decisions of the fund as otherwise provided in this Section.
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable

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property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of police officers, and revenues
available from other sources, will equal a sum sufficient to
meet the annual requirements of the police pension fund. The
annual requirements to be provided by such tax levy are equal
to (1) the normal cost of the pension fund for the year
involved, plus (2) an amount sufficient to bring the total
assets of the pension fund up to 90% of the total actuarial
liabilities of the pension fund by the end of municipal fiscal
year 2040, as annually updated and determined by an enrolled
actuary employed by the Illinois Department of Insurance or by
an enrolled actuary retained by the pension fund or the
municipality. In making these determinations, the required
minimum employer contribution shall be calculated each year as
a level percentage of payroll over the years remaining up to
and including fiscal year 2040 and shall be determined under
the projected unit credit actuarial cost method. The tax shall
be levied and collected in the same manner as the general taxes
of the municipality, and in addition to all other taxes now or
hereafter authorized to be levied upon all property within the
municipality, and shall be in addition to the amount authorized
to be levied for general purposes as provided by Section 8-3-1
of the Illinois Municipal Code, approved May 29, 1961, as
amended. The tax shall be forwarded directly to the treasurer
of the board within 30 business days after receipt by the

10100SB1300ham005 - 80 - LRB101 07899 RPS 64619 a
county.
(b) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the System's
assets for fiscal years after March 30, 2011, 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.
(c) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments in accordance with any applicable rules of the
Comptroller, and the Comptroller must, beginning in fiscal year
2016, deduct and remit to the fund the certified amounts or a
portion of those amounts from the following proportions of
payments of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any payments of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount

10100SB1300ham005 - 81 - LRB101 07899 RPS 64619 a
of any payments of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any payments of State funds
to the municipality.
The State Comptroller may not deduct from any payments of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(d) The police pension fund shall consist of the following
moneys which shall be set apart by the treasurer of the
municipality:
(1) All moneys derived from the taxes levied hereunder;
(2) Contributions by police officers under Section
3-125.1;
(2.5) All moneys received from the Police Officers'
Pension Investment Fund as provided in Article 22B of this
Code;
(3) All moneys accumulated by the municipality under
any previous legislation establishing a fund for the
benefit of disabled or retired police officers;
(4) Donations, gifts or other transfers authorized by
this Article.
(e) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent

10100SB1300ham005 - 82 - LRB101 07899 RPS 64619 a
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 99-8, eff. 7-9-15.)
(40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)
Sec. 3-132. To control and manage the Pension Fund. In
accordance with the applicable provisions of Articles 1 and 1A
and this Article, to control and manage, exclusively, the
following:
(1) the pension fund,
(2) until the board's investment authority is
terminated pursuant to Section 3-132.1, investment
expenditures and income, including interest dividends,
capital gains and other distributions on the investments,

10100SB1300ham005 - 83 - LRB101 07899 RPS 64619 a
and
(3) all money donated, paid, assessed, or provided by
law for the pensioning of disabled and retired police
officers, their surviving spouses, minor children, and
dependent parents.
All money received or collected shall be credited by the
treasurer of the municipality to the account of the pension
fund and held by the treasurer of the municipality subject to
the order and control of the board. The treasurer of the
municipality shall maintain a record of all money received,
transferred, and held for the account of the board.
(Source: P.A. 90-507, eff. 8-22-97.)
(40 ILCS 5/3-132.1 new)
Sec. 3-132.1. To transfer investment authority to the
Police Officers' Pension Investment Fund. As soon as
practicable after the effective date of this amendatory Act of
the 101st General Assembly, but no later than 30 months after
the effective date of this amendatory Act of the 101st General
Assembly, each transferor pension fund shall transfer, in
accordance with the requirements of Section 22B-120, to the
Police Officers' Pension Investment Fund created under Article
22B for management and investment all of their securities or
for which commitments have been made, and all funds, assets, or
moneys representing permanent or temporary investments, or
cash reserves maintained for the purpose of obtaining income

10100SB1300ham005 - 84 - LRB101 07899 RPS 64619 a
thereon. Upon the transfer of such securities, funds, assets,
and moneys of a transferor pension fund to the Police Officers'
Pension Investment Fund, the transferor pension fund shall not
manage or control the same and shall no longer exercise any
investment authority pursuant to Section 3-135 of this Code,
notwithstanding any other provision of this Article to the
contrary.
Nothing in this Section prohibits a fund under this Article
from maintaining an account, including an interest earning
account, for the purposes of benefit payments and other
reasonable expenses after the end of the transition period as
defined in Section 22B-112, and funds under this Article are
encouraged to consider a local bank or financial institution to
provide such accounts and related financial services.
(40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)
Sec. 4-109. Pension.
(a) A firefighter age 50 or more with 20 or more years of
creditable service, who is no longer in service as a
firefighter, shall receive a monthly pension of 1/2 the monthly
salary attached to the rank held by him or her in the fire
service at the date of retirement.
The monthly pension shall be increased by 1/12 of 2.5% of
such monthly salary for each additional month over 20 years of
service through 30 years of service, to a maximum of 75% of
such monthly salary.

10100SB1300ham005 - 85 - LRB101 07899 RPS 64619 a
The changes made to this subsection (a) by this amendatory
Act of the 91st General Assembly apply to all pensions that
become payable under this subsection on or after January 1,
1999. All pensions payable under this subsection that began on
or after January 1, 1999 and before the effective date of this
amendatory Act shall be recalculated, and the amount of the
increase accruing for that period shall be payable to the
pensioner in a lump sum.
(b) A firefighter who retires or is separated from service
having at least 10 but less than 20 years of creditable
service, who is not entitled to receive a disability pension,
and who did not apply for a refund of contributions at his or
her last separation from service shall receive a monthly
pension upon attainment of age 60 based on the monthly salary
attached to his or her rank in the fire service on the date of
retirement or separation from service according to the
following schedule:
For 10 years of service, 15% of salary;
For 11 years of service, 17.6% of salary;
For 12 years of service, 20.4% of salary;
For 13 years of service, 23.4% of salary;
For 14 years of service, 26.6% of salary;
For 15 years of service, 30% of salary;
For 16 years of service, 33.6% of salary;
For 17 years of service, 37.4% of salary;
For 18 years of service, 41.4% of salary;

10100SB1300ham005 - 86 - LRB101 07899 RPS 64619 a
For 19 years of service, 45.6% of salary.
(c) Notwithstanding any other provision of this Article,
the provisions of this subsection (c) apply to a person who
first becomes a firefighter under this Article on or after
January 1, 2011.
A firefighter age 55 or more who has 10 or more years of
service in that capacity shall be entitled at his option to
receive a monthly pension for his service as a firefighter
computed by multiplying 2.5% for each year of such service by
his or her final average salary.
The pension of a firefighter who is retiring after
attaining age 50 with 10 or more years of creditable service
shall be reduced by one-half of 1% for each month that the
firefighter's age is under age 55.
The maximum pension under this subsection (c) shall be 75%
of final average salary.
For the purposes of this subsection (c), "final average
salary" means the greater of: (i) the average monthly salary
obtained by dividing the total salary of the firefighter during
the 48 96 consecutive months of service within the last 60 120
months of service in which the total salary was the highest by
the number of months of service in that period; or (ii) the
average monthly salary obtained by dividing the total salary of
the firefighter during the 96 consecutive months of service
within the last 120 months of service in which the total salary
was the highest by the number of months of service in that

10100SB1300ham005 - 87 - LRB101 07899 RPS 64619 a
period.
Beginning on January 1, 2011, for all purposes under this
Code (including without limitation the calculation of benefits
and employee contributions), the annual salary 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.
Nothing in this amendatory Act of the 101st General
Assembly shall cause or otherwise result in any retroactive
adjustment of any employee contributions.
(Source: P.A. 96-1495, eff. 1-1-11.)
(40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)
Sec. 4-114. Pension to survivors. If a firefighter who is
not receiving a disability pension under Section 4-110 or
4-110.1 dies (1) as a result of any illness or accident, or (2)
from any cause while in receipt of a disability pension under
this Article, or (3) during retirement after 20 years service,
or (4) while vested for or in receipt of a pension payable
under subsection (b) of Section 4-109, or (5) while a deferred
pensioner, having made all required contributions, a pension

10100SB1300ham005 - 88 - LRB101 07899 RPS 64619 a
shall be paid to his or her survivors, based on the monthly
salary attached to the firefighter's rank on the last day of
service in the fire department, as follows:
(a)(1) To the surviving spouse, a monthly pension of
40% of the monthly salary, and if there is a surviving
spouse, to the guardian of any minor child or children
including a child which has been conceived but not yet
born, 12% of such monthly salary for each such child until
attainment of age 18 or until the child's marriage,
whichever occurs first. Beginning July 1, 1993, the monthly
pension to the surviving spouse shall be 54% of the monthly
salary for all persons receiving a surviving spouse pension
under this Article, regardless of whether the deceased
firefighter was in service on or after the effective date
of this amendatory Act of 1993.
(2) Beginning July 1, 2004, unless the amount provided
under paragraph (1) of this subsection (a) is greater, the
total monthly pension payable under this paragraph (a),
including any amount payable on account of children, to the
surviving spouse of a firefighter who died (i) while
receiving a retirement pension, (ii) while he or she was a
deferred pensioner with at least 20 years of creditable
service, or (iii) while he or she was in active service
having at least 20 years of creditable service, regardless
of age, shall be no less than 100% of the monthly
retirement pension earned by the deceased firefighter at

10100SB1300ham005 - 89 - LRB101 07899 RPS 64619 a
the time of death, regardless of whether death occurs
before or after attainment of age 50, including any
increases under Section 4-109.1. This minimum applies to
all such surviving spouses who are eligible to receive a
surviving spouse pension, regardless of whether the
deceased firefighter was in service on or after the
effective date of this amendatory Act of the 93rd General
Assembly, and notwithstanding any limitation on maximum
pension under paragraph (d) or any other provision of this
Article.
(3) If the pension paid on and after July 1, 2004 to
the surviving spouse of a firefighter who died on or after
July 1, 2004 and before the effective date of this
amendatory Act of the 93rd General Assembly was less than
the minimum pension payable under paragraph (1) or (2) of
this subsection (a), the fund shall pay a lump sum equal to
the difference within 90 days after the effective date of
this amendatory Act of the 93rd General Assembly.
The pension to the surviving spouse shall terminate in
the event of the surviving spouse's remarriage prior to
July 1, 1993; remarriage on or after that date does not
affect the surviving spouse's pension, regardless of
whether the deceased firefighter was in service on or after
the effective date of this amendatory Act of 1993.
The surviving spouse's pension shall be subject to the
minimum established in Section 4-109.2.

10100SB1300ham005 - 90 - LRB101 07899 RPS 64619 a
(b) Upon the death of the surviving spouse leaving one
or more minor children, or upon the death of a firefighter
leaving one or more minor children but no surviving spouse,
to the duly appointed guardian of each such child, for
support and maintenance of each such child until the child
reaches age 18 or marries, whichever occurs first, a
monthly pension of 20% of the monthly salary.
In a case where the deceased firefighter left one or
more minor children but no surviving spouse and the
guardian of a child is receiving a pension of 12% of the
monthly salary on August 16, 2013 (the effective date of
Public Act 98-391), the pension is increased by Public Act
98-391 to 20% of the monthly salary for each such child,
beginning on the pension payment date occurring on or next
following August 16, 2013. The changes to this Section made
by Public Act 98-391 apply without regard to whether the
deceased firefighter was in service on or after August 16,
2013.
(c) If a deceased firefighter leaves no surviving
spouse or unmarried minor children under age 18, but leaves
a dependent father or mother, to each dependent parent a
monthly pension of 18% of the monthly salary. To qualify
for the pension, a dependent parent must furnish
satisfactory proof that the deceased firefighter was at the
time of his or her death the sole supporter of the parent
or that the parent was the deceased's dependent for federal

10100SB1300ham005 - 91 - LRB101 07899 RPS 64619 a
income tax purposes.
(d) The total pension provided under paragraphs (a),
(b) and (c) of this Section shall not exceed 75% of the
monthly salary of the deceased firefighter (1) when paid to
the survivor of a firefighter who has attained 20 or more
years of service credit and who receives or is eligible to
receive a retirement pension under this Article, or (2)
when paid to the survivor of a firefighter who dies as a
result of illness or accident, or (3) when paid to the
survivor of a firefighter who dies from any cause while in
receipt of a disability pension under this Article, or (4)
when paid to the survivor of a deferred pensioner. For all
other survivors of deceased firefighters, the total
pension provided under paragraphs (a), (b) and (c) of this
Section shall not exceed 50% of the retirement annuity the
firefighter would have received on the date of death.
The maximum pension limitations in this paragraph (d)
do not control over any contrary provision of this Article
explicitly establishing a minimum amount of pension or
granting a one-time or annual increase in pension.
(e) If a firefighter leaves no eligible survivors under
paragraphs (a), (b) and (c), the board shall refund to the
firefighter's estate the amount of his or her accumulated
contributions, less the amount of pension payments, if any,
made to the firefighter while living.
(f) (Blank).

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(g) If a judgment of dissolution of marriage between a
firefighter and spouse is judicially set aside subsequent
to the firefighter's death, the surviving spouse is
eligible for the pension provided in paragraph (a) only if
the judicial proceedings are filed within 2 years after the
date of the dissolution of marriage and within one year
after the firefighter's death and the board is made a party
to the proceedings. In such case the pension shall be
payable only from the date of the court's order setting
aside the judgment of dissolution of marriage.
(h) Benefits payable on account of a child under this
Section shall not be reduced or terminated by reason of the
child's attainment of age 18 if he or she is then dependent
by reason of a physical or mental disability but shall
continue to be paid as long as such dependency continues.
Individuals over the age of 18 and adjudged as a disabled
person pursuant to Article XIa of the Probate Act of 1975,
except for persons receiving benefits under Article III of
the Illinois Public Aid Code, shall be eligible to receive
benefits under this Act.
(i) Beginning January 1, 2000, the pension of the
surviving spouse of a firefighter who dies on or after
January 1, 1994 as a result of sickness, accident, or
injury incurred in or resulting from the performance of an
act of duty or from the cumulative effects of acts of duty
shall not be less than 100% of the salary attached to the

10100SB1300ham005 - 93 - LRB101 07899 RPS 64619 a
rank held by the deceased firefighter on the last day of
service, notwithstanding subsection (d) or any other
provision of this Article.
(j) Beginning July 1, 2004, the pension of the
surviving spouse of a firefighter who dies on or after
January 1, 1988 as a result of sickness, accident, or
injury incurred in or resulting from the performance of an
act of duty or from the cumulative effects of acts of duty
shall not be less than 100% of the salary attached to the
rank held by the deceased firefighter on the last day of
service, notwithstanding subsection (d) or any other
provision of this Article.
Notwithstanding any other provision of this Article, if a
person who first becomes a firefighter under this Article on or
after January 1, 2011 and who is not receiving a disability
pension under Section 4-110 or 4-110.1 dies (1) as a result of
any illness or accident, (2) from any cause while in receipt of
a disability pension under this Article, (3) during retirement
after 20 years service, (4) while vested for or in receipt of a
pension payable under subsection (b) of Section 4-109, or (5)
while a deferred pensioner, having made all required
contributions, then a pension shall be paid to his or her
survivors in an the amount equal to the greater of (i) 54% of
the firefighter's monthly salary at the date of death, or (ii)
of 66 2/3% of the firefighter's earned pension at the date of
death, and, if there is a surviving spouse, 12% of such monthly

10100SB1300ham005 - 94 - LRB101 07899 RPS 64619 a
salary shall be granted to the guardian of any minor child or
children, including a child who has been conceived but not yet
born, for each such child until attainment of age 18. Upon the
death of the surviving spouse leaving one or more minor
children, or upon the death of a firefighter leaving one or
more minor children but no surviving spouse, a monthly pension
of 20% of the monthly salary shall be granted to the duly
appointed guardian of each such child for the support and
maintenance of each such child until the child reaches age 18.
The total pension provided under this paragraph shall not
exceed 75% of the monthly salary of the deceased firefighter
(1) when paid to the survivor of a firefighter who has attained
20 or more years of service credit and who receives or is
eligible to receive a retirement pension under this Article,
(2) when paid to the survivor of a firefighter who dies as a
result of illness or accident, (3) when paid to the survivor of
a firefighter who dies from any cause while in receipt of a
disability pension under this Article, or (4) when paid to the
survivor of a deferred pensioner. Nothing in this Section shall
act to diminish the survivor's benefits described in subsection
(j) of this Section.
Notwithstanding Section 1-103.1, the changes made to this
subsection apply without regard to whether the deceased
firefighter was in service on or after the effective date of
this amendatory Act of the 101st General Assembly.
Notwithstanding any other provision of this Article, the

10100SB1300ham005 - 95 - LRB101 07899 RPS 64619 a
monthly pension of a survivor of a person who first becomes a
firefighter under this Article on or after January 1, 2011
shall be increased on the January 1 after attainment of age 60
by the recipient of the survivor's pension and each January 1
thereafter by 3% or one-half the annual unadjusted percentage
increase 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 pension. If the
annual unadjusted percentage change in the consumer price
index-u for a 12-month period ending in September is zero or,
when compared with the preceding period, decreases, then the
survivor's pension shall not be increased.
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 pension
funds.
(Source: P.A. 98-391, eff. 8-16-13; 98-756, eff. 7-16-14.)
(40 ILCS 5/4-117.2 new)
Sec. 4-117.2. Authority of the fund. The fund shall retain
the exclusive authority to adjudicate and award disability

10100SB1300ham005 - 96 - LRB101 07899 RPS 64619 a
benefits, retirement benefits, and survivor benefits under
this Article and to issue refunds under this Article. The
exclusive method of judicial review of any final administrative
decision of the fund shall be made in accordance with Section
4-139. A third party, including the Firefighters' Pension
Investment Fund established under Article 22C of this Code,
shall not have the authority to control, alter, or modify, or
the ability to review or intervene in, the proceedings or
decisions of the fund as otherwise provided in this Section.
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
Sec. 4-118. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of firefighters and revenues available
from other sources, will equal a sum sufficient to meet the
annual actuarial requirements of the pension fund, as
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or municipality. For the purposes of this
Section, the annual actuarial requirements of the pension fund
are equal to (1) the normal cost of the pension fund, or 17.5%
of the salaries and wages to be paid to firefighters for the
year involved, whichever is greater, plus (2) an annual amount

10100SB1300ham005 - 97 - LRB101 07899 RPS 64619 a
sufficient to bring the total assets of the pension fund up to
90% of the total actuarial liabilities of the pension fund by
the end of municipal fiscal year 2040, as annually updated and
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or the municipality. In making these
determinations, the required minimum employer contribution
shall be calculated each year as a level percentage of payroll
over the years remaining up to and including fiscal year 2040
and shall be determined under the projected unit credit
actuarial cost method. The amount to be applied towards the
amortization of the unfunded accrued liability in any year
shall not be less than the annual amount required to amortize
the unfunded accrued liability, including interest, as a level
percentage of payroll over the number of years remaining in the
40 year amortization period.
(a-2) A municipality that has established a pension fund
under this Article and who employs a full-time firefighter, as
defined in Section 4-106, shall be deemed a primary employer
with respect to that full-time firefighter. Any municipality of
5,000 or more inhabitants that employs or enrolls a firefighter
while that firefighter continues to earn service credit as a
participant in a primary employer's pension fund under this
Article shall be deemed a secondary employer and such employees
shall be deemed to be secondary employee firefighters. To
ensure that the primary employer's pension fund under this

10100SB1300ham005 - 98 - LRB101 07899 RPS 64619 a
Article is aware of additional liabilities and risks to which
firefighters are exposed when performing work as firefighters
for secondary employers, a secondary employer shall annually
prepare a report accounting for all hours worked by and wages
and salaries paid to the secondary employee firefighters it
receives services from or employs for each fiscal year in which
such firefighters are employed and transmit a certified copy of
that report to the primary employer's pension fund and the
secondary employee firefighter no later than 30 days after the
end of any fiscal year in which wages were paid to the
secondary employee firefighters.
Nothing in this Section shall be construed to allow a
secondary employee to qualify for benefits or creditable
service for employment as a firefighter for a secondary
employer.
(a-5) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the pension
fund's assets for fiscal years after March 30, 2011, any
actuarial gains or losses from investment return incurred
in a fiscal year shall be recognized in equal annual

10100SB1300ham005 - 99 - LRB101 07899 RPS 64619 a
amounts over the 5-year period following that fiscal year.
(b) The tax shall be levied and collected in the same
manner as the general taxes of the municipality, and shall be
in addition to all other taxes now or hereafter authorized to
be levied upon all property within the municipality, and in
addition to the amount authorized to be levied for general
purposes, under Section 8-3-1 of the Illinois Municipal Code or
under Section 14 of the Fire Protection District Act. The tax
shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the county (or, in the
case of amounts added to the tax levy under subsection (f),
used by the municipality to pay the employer contributions
required under subsection (b-1) of Section 15-155 of this
Code).
(b-5) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments in accordance with any applicable rules of the
Comptroller, and the Comptroller must, beginning in fiscal year
2016, deduct and remit to the fund the certified amounts or a
portion of those amounts from the following proportions of
payments of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any payments of State funds to the municipality;

10100SB1300ham005 - 100 - LRB101 07899 RPS 64619 a
(2) in fiscal year 2017, two-thirds of the total amount
of any payments of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any payments of State funds
to the municipality.
The State Comptroller may not deduct from any payments of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(c) The board shall make available to the membership and
the general public for inspection and copying at reasonable
times the most recent Actuarial Valuation Balance Sheet and Tax
Levy Requirement issued to the fund by the Department of
Insurance.
(d) The firefighters' pension fund shall consist of the
following moneys which shall be set apart by the treasurer of
the municipality: (1) all moneys derived from the taxes levied
hereunder; (2) contributions by firefighters as provided under
Section 4-118.1; (2.5) all moneys received from the
Firefighters' Pension Investment Fund as provided in Article
22C of this Code; (3) all rewards in money, fees, gifts, and
emoluments that may be paid or given for or on account of
extraordinary service by the fire department or any member
thereof, except when allowed to be retained by competitive
awards; and (4) any money, real estate or personal property
received by the board.

10100SB1300ham005 - 101 - LRB101 07899 RPS 64619 a
(e) For the purposes of this Section, "enrolled actuary"
means an actuary: (1) who is a member of the Society of
Actuaries or the American Academy of Actuaries; and (2) who is
enrolled under Subtitle C of Title III of the Employee
Retirement Income Security Act of 1974, or who has been engaged
in providing actuarial services to one or more public
retirement systems for a period of at least 3 years as of July
1, 1983.
(f) The corporate authorities of a municipality that
employs a person who is described in subdivision (d) of Section
4-106 may add to the tax levy otherwise provided for in this
Section an amount equal to the projected cost of the employer
contributions required to be paid by the municipality to the
State Universities Retirement System under subsection (b-1) of
Section 15-155 of this Code.
(g) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return

10100SB1300ham005 - 102 - LRB101 07899 RPS 64619 a
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 101-522, eff. 8-23-19.)
(40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
Sec. 4-123. To control and manage the Pension Fund. In
accordance with the applicable provisions of Articles 1 and 1A
and this Article, to control and manage, exclusively, the
following:
(1) the pension fund,
(2) until the board's investment authority is
terminated pursuant to Section 4-123.2, investment
expenditures and income, including interest dividends,
capital gains, and other distributions on the investments,
and
(3) all money donated, paid, assessed, or provided by
law for the pensioning of disabled and retired
firefighters, their surviving spouses, minor children, and
dependent parents.
All money received or collected shall be credited by the
treasurer of the municipality to the account of the pension

10100SB1300ham005 - 103 - LRB101 07899 RPS 64619 a
fund and held by the treasurer of the municipality subject to
the order and control of the board. The treasurer of the
municipality shall maintain a record of all money received,
transferred, and held for the account of the board.
(Source: P.A. 90-507, eff. 8-22-97.)
(40 ILCS 5/4-123.2 new)
Sec. 4-123.2. To transfer investment authority to the
Firefighters' Pension Investment Fund. As soon as practicable
after the effective date of this amendatory Act of the 101st
General Assembly, but no later than 30 months after the
effective date of this amendatory Act of the 101st General
Assembly, each transferor pension fund shall transfer, in
accordance with the requirements of Section 22C-120 to the
Firefighters' Pension Investment Fund created under Article
22C for management and investment all of their securities or
for which commitments have been made, and all funds, assets, or
moneys representing permanent or temporary investments, or
cash reserves maintained for the purpose of obtaining income
thereon. Upon the transfer of such securities, funds, assets,
and moneys of a transferor pension fund to the Firefighters'
Pension Investment Fund, the transferor pension fund shall not
manage or control the same and shall no longer exercise any
investment authority pursuant to Section 4-128 of this Code,
notwithstanding any other provision of this Article to the
contrary.

10100SB1300ham005 - 104 - LRB101 07899 RPS 64619 a
Nothing in this Section prohibits a fund under this Article
from maintaining an account, including an interest earning
account, for the purposes of benefit payments and other
reasonable expenses after the end of the transition period as
defined in Section 22C-112, and funds under this Article are
encouraged to consider a local bank or financial institution to
provide such accounts and related financial services.
(40 ILCS 5/7-159) (from Ch. 108 1/2, par. 7-159)
Sec. 7-159. Surviving spouse annuity - refund of survivor
credits.
(a) Any employee annuitant who (1) upon the date a
retirement annuity begins is not then married, or (2) is
married to a person who would not qualify for surviving spouse
annuity if the person died on such date, is entitled to a
refund of the survivor credits including interest accumulated
on the date the annuity begins, excluding survivor credits and
interest thereon credited during periods of disability, and no
spouse shall have a right to any surviving spouse annuity from
this Fund. If the employee annuitant reenters service and upon
subsequent retirement has a spouse who would qualify for a
surviving spouse annuity, the employee annuitant may pay the
fund the amount of the refund plus interest at the effective
rate at the date of payment. The payment shall qualify the
spouse for a surviving spouse annuity and the amount paid shall
be considered as survivor contributions.

10100SB1300ham005 - 105 - LRB101 07899 RPS 64619 a
(b) Instead of a refund under subsection (a), the retiring
employee may elect to convert the amount of the refund into an
annuity, payable separately from the retirement annuity. If the
annuitant dies before the guaranteed amount has been
distributed, the remainder shall be paid in a lump sum to the
designated beneficiary of the annuitant. The Board shall adopt
any rules necessary for the implementation of this subsection.
(c) An annuitant who retired prior to June 1, 2011 and
received a refund of survivor credits under subsection (a), and
who thereafter became, and remains, either:
(1) a party to a civil union or a party to a legal
relationship that is recognized as a civil union or
marriage under the Illinois Religious Freedom Protection
and Civil Union Act on or after June 1, 2011; or
(2) a party to a marriage under the Illinois Marriage
and Dissolution of Marriage Act on or after February 26,
2014; or
(3) a party to a marriage, civil union or other legal
relationship that, at the time it was formed, was not
legally recognized in Illinois but was subsequently
recognized as a civil union or marriage under the Illinois
Religious Freedom Protection and Civil Union Act on or
after June 1, 2011, a marriage under the Illinois Marriage
and Dissolution of Marriage Act on or after February 26,
2014, or both;
may, within a period of one year beginning 5 months after the

10100SB1300ham005 - 106 - LRB101 07899 RPS 64619 a
effective date of this amendatory Act of the 99th General
Assembly, make an election to re-establish rights to a
surviving spouse annuity under Sections 7-154 through 7-158
(notwithstanding the eligibility requirements of paragraph
(a)(1) of Section 7-154), by paying to the Fund: (1) the total
amount of the refund received for survivor credits; and (2)
interest thereon at the actuarially assumed rate of return from
the date of the refund to the date of payment. Such election
must be made prior to the date of death of the annuitant.
The Fund may allow the annuitant to repay this refund over
a period of not more than 24 months. To the extent permitted by
the Internal Revenue Code of 1986, as amended, for federal and
State tax purposes, if a member pays in monthly installments by
reducing the monthly benefit by the amount of the otherwise
applicable contribution, the monthly amount by which the
annuitant's benefit is reduced shall not be treated as a
contribution by the annuitant but rather as a reduction of the
annuitant's monthly benefit.
If an annuitant makes an election under this subsection (c)
and the contributions required are not paid in full, an
otherwise qualifying spouse shall be given the option to make
an additional lump sum payment of the remaining contributions
and qualify for a surviving spouse annuity. Otherwise, an
additional refund representing contributions made hereunder
shall be paid at the annuitant's death and there shall be no
surviving spouse annuity paid.

10100SB1300ham005 - 107 - LRB101 07899 RPS 64619 a
(d) Any surviving spouse of an annuitant who (1) retired
prior to June 1, 2011, (2) was not married on the date the
retirement annuity began, (3) received a refund of survivor
credits under subsection (a), and (4) died prior to the
implementation of Public Act 99-682 on December 29, 2016 may,
within a period of one year beginning 5 months after the
effective date of this amendatory Act of the 101st General
Assembly, make an election to re-establish rights to a
surviving spouse annuity under Sections 7-154 through 7-158
(notwithstanding the eligibility requirements of paragraph (a)
of subsection (1) of Section 7-154), by paying to the Fund: (i)
the total amount of the refund received for survivor credits;
and (ii) interest thereon at the actuarially assumed rate of
return from the date of the refund to the date of payment. The
surviving spouse must also provide documentation proving he or
she was married to the annuitant or a party to a civil union
with the annuitant at the time of death and has not
subsequently remarried. This proof must include a marriage
certificate or a certificate for a civil union and any other
supporting documents deemed necessary by the Fund.
(Source: P.A. 99-682, eff. 7-29-16.)
(40 ILCS 5/14-110) (from Ch. 108 1/2, par. 14-110)
Sec. 14-110. Alternative retirement annuity.
(a) Any member who has withdrawn from service with not less
than 20 years of eligible creditable service and has attained

10100SB1300ham005 - 108 - LRB101 07899 RPS 64619 a
age 55, and any member who has withdrawn from service with not
less than 25 years of eligible creditable service and has
attained age 50, regardless of whether the attainment of either
of the specified ages occurs while the member is still in
service, shall be entitled to receive at the option of the
member, in lieu of the regular or minimum retirement annuity, a
retirement annuity computed as follows:
(i) for periods of service as a noncovered employee: if
retirement occurs on or after January 1, 2001, 3% of final
average compensation for each year of creditable service;
if retirement occurs before January 1, 2001, 2 1/4% of
final average compensation for each of the first 10 years
of creditable service, 2 1/2% for each year above 10 years
to and including 20 years of creditable service, and 2 3/4%
for each year of creditable service above 20 years; and
(ii) for periods of eligible creditable service as a
covered employee: if retirement occurs on or after January
1, 2001, 2.5% of final average compensation for each year
of creditable service; if retirement occurs before January
1, 2001, 1.67% of final average compensation for each of
the first 10 years of such service, 1.90% for each of the
next 10 years of such service, 2.10% for each year of such
service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30.
Such annuity shall be subject to a maximum of 75% of final
average compensation if retirement occurs before January 1,

10100SB1300ham005 - 109 - LRB101 07899 RPS 64619 a
2001 or to a maximum of 80% of final average compensation if
retirement occurs on or after January 1, 2001.
These rates shall not be applicable to any service
performed by a member as a covered employee which is not
eligible creditable service. Service as a covered employee
which is not eligible creditable service shall be subject to
the rates and provisions of Section 14-108.
(b) For the purpose of this Section, "eligible creditable
service" means creditable service resulting from service in one
or more of the following positions:
(1) State policeman;
(2) fire fighter in the fire protection service of a
department;
(3) air pilot;
(4) special agent;
(5) investigator for the Secretary of State;
(6) conservation police officer;
(7) investigator for the Department of Revenue or the
Illinois Gaming Board;
(8) security employee of the Department of Human
Services;
(9) Central Management Services security police
officer;
(10) security employee of the Department of
Corrections or the Department of Juvenile Justice;
(11) dangerous drugs investigator;

10100SB1300ham005 - 110 - LRB101 07899 RPS 64619 a
(12) investigator for the Department of State Police;
(13) investigator for the Office of the Attorney
General;
(14) controlled substance inspector;
(15) investigator for the Office of the State's
Attorneys Appellate Prosecutor;
(16) Commerce Commission police officer;
(17) arson investigator;
(18) State highway maintenance worker;
(19) security employee of the Department of Innovation
and Technology; or
(20) transferred employee.
A person employed in one of the positions specified in this
subsection is entitled to eligible creditable service for
service credit earned under this Article while undergoing the
basic police training course approved by the Illinois Law
Enforcement Training Standards Board, if completion of that
training is required of persons serving in that position. For
the purposes of this Code, service during the required basic
police training course shall be deemed performance of the
duties of the specified position, even though the person is not
a sworn peace officer at the time of the training.
A person under paragraph (20) is entitled to eligible
creditable service for service credit earned under this Article
on and after his or her transfer by Executive Order No.
2003-10, Executive Order No. 2004-2, or Executive Order No.

10100SB1300ham005 - 111 - LRB101 07899 RPS 64619 a
2016-1.
(c) For the purposes of this Section:
(1) The term "State policeman" includes any title or
position in the Department of State Police that is held by
an individual employed under the State Police Act.
(2) The term "fire fighter in the fire protection
service of a department" includes all officers in such fire
protection service including fire chiefs and assistant
fire chiefs.
(3) The term "air pilot" includes any employee whose
official job description on file in the Department of
Central Management Services, or in the department by which
he is employed if that department is not covered by the
Personnel Code, states that his principal duty is the
operation of aircraft, and who possesses a pilot's license;
however, the change in this definition made by this
amendatory Act of 1983 shall not operate to exclude any
noncovered employee who was an "air pilot" for the purposes
of this Section on January 1, 1984.
(4) The term "special agent" means any person who by
reason of employment by the Division of Narcotic Control,
the Bureau of Investigation or, after July 1, 1977, the
Division of Criminal Investigation, the Division of
Internal Investigation, the Division of Operations, or any
other Division or organizational entity in the Department
of State Police is vested by law with duties to maintain

10100SB1300ham005 - 112 - LRB101 07899 RPS 64619 a
public order, investigate violations of the criminal law of
this State, enforce the laws of this State, make arrests
and recover property. The term "special agent" includes any
title or position in the Department of State Police that is
held by an individual employed under the State Police Act.
(5) The term "investigator for the Secretary of State"
means any person employed by the Office of the Secretary of
State and vested with such investigative duties as render
him ineligible for coverage under the Social Security Act
by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
218(l)(1) of that Act.
A person who became employed as an investigator for the
Secretary of State between January 1, 1967 and December 31,
1975, and who has served as such until attainment of age
60, either continuously or with a single break in service
of not more than 3 years duration, which break terminated
before January 1, 1976, shall be entitled to have his
retirement annuity calculated in accordance with
subsection (a), notwithstanding that he has less than 20
years of credit for such service.
(6) The term "Conservation Police Officer" means any
person employed by the Division of Law Enforcement of the
Department of Natural Resources and vested with such law
enforcement duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The

10100SB1300ham005 - 113 - LRB101 07899 RPS 64619 a
term "Conservation Police Officer" includes the positions
of Chief Conservation Police Administrator and Assistant
Conservation Police Administrator.
(7) The term "investigator for the Department of
Revenue" means any person employed by the Department of
Revenue and vested with such investigative duties as render
him ineligible for coverage under the Social Security Act
by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
218(l)(1) of that Act.
The term "investigator for the Illinois Gaming Board"
means any person employed as such by the Illinois Gaming
Board and vested with such peace officer duties as render
the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D), and 218(l)(1) of that Act.
(8) The term "security employee of the Department of
Human Services" means any person employed by the Department
of Human Services who (i) is employed at the Chester Mental
Health Center and has daily contact with the residents
thereof, (ii) is employed within a security unit at a
facility operated by the Department and has daily contact
with the residents of the security unit, (iii) is employed
at a facility operated by the Department that includes a
security unit and is regularly scheduled to work at least
50% of his or her working hours within that security unit,
or (iv) is a mental health police officer. "Mental health

10100SB1300ham005 - 114 - LRB101 07899 RPS 64619 a
police officer" means any person employed by the Department
of Human Services in a position pertaining to the
Department's mental health and developmental disabilities
functions who is vested with such law enforcement duties as
render the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
means that portion of a facility that is devoted to the
care, containment, and treatment of persons committed to
the Department of Human Services as sexually violent
persons, persons unfit to stand trial, or persons not
guilty by reason of insanity. With respect to past
employment, references to the Department of Human Services
include its predecessor, the Department of Mental Health
and Developmental Disabilities.
The changes made to this subdivision (c)(8) by Public
Act 92-14 apply to persons who retire on or after January
1, 2001, notwithstanding Section 1-103.1.
(9) "Central Management Services security police
officer" means any person employed by the Department of
Central Management Services who is vested with such law
enforcement duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
(10) For a member who first became an employee under
this Article before July 1, 2005, the term "security

10100SB1300ham005 - 115 - LRB101 07899 RPS 64619 a
employee of the Department of Corrections or the Department
of Juvenile Justice" means any employee of the Department
of Corrections or the Department of Juvenile Justice or the
former Department of Personnel, and any member or employee
of the Prisoner Review Board, who has daily contact with
inmates or youth by working within a correctional facility
or Juvenile facility operated by the Department of Juvenile
Justice or who is a parole officer or an employee who has
direct contact with committed persons in the performance of
his or her job duties. For a member who first becomes an
employee under this Article on or after July 1, 2005, the
term means an employee of the Department of Corrections or
the Department of Juvenile Justice who is any of the
following: (i) officially headquartered at a correctional
facility or Juvenile facility operated by the Department of
Juvenile Justice, (ii) a parole officer, (iii) a member of
the apprehension unit, (iv) a member of the intelligence
unit, (v) a member of the sort team, or (vi) an
investigator.
(11) The term "dangerous drugs investigator" means any
person who is employed as such by the Department of Human
Services.
(12) The term "investigator for the Department of State
Police" means a person employed by the Department of State
Police who is vested under Section 4 of the Narcotic
Control Division Abolition Act with such law enforcement

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powers as render him ineligible for coverage under the
Social Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act.
(13) "Investigator for the Office of the Attorney
General" means any person who is employed as such by the
Office of the Attorney General and is vested with such
investigative duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
the period before January 1, 1989, the term includes all
persons who were employed as investigators by the Office of
the Attorney General, without regard to social security
status.
(14) "Controlled substance inspector" means any person
who is employed as such by the Department of Professional
Regulation and is vested with such law enforcement duties
as render him ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act. The term
"controlled substance inspector" includes the Program
Executive of Enforcement and the Assistant Program
Executive of Enforcement.
(15) The term "investigator for the Office of the
State's Attorneys Appellate Prosecutor" means a person
employed in that capacity on a full time basis under the
authority of Section 7.06 of the State's Attorneys

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Appellate Prosecutor's Act.
(16) "Commerce Commission police officer" means any
person employed by the Illinois Commerce Commission who is
vested with such law enforcement duties as render him
ineligible for coverage under the Social Security Act by
reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
218(l)(1) of that Act.
(17) "Arson investigator" means any person who is
employed as such by the Office of the State Fire Marshal
and is vested with such law enforcement duties as render
the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D), and 218(l)(1) of that Act. A person who was
employed as an arson investigator on January 1, 1995 and is
no longer in service but not yet receiving a retirement
annuity may convert his or her creditable service for
employment as an arson investigator into eligible
creditable service by paying to the System the difference
between the employee contributions actually paid for that
service and the amounts that would have been contributed if
the applicant were contributing at the rate applicable to
persons with the same social security status earning
eligible creditable service on the date of application.
(18) The term "State highway maintenance worker" means
a person who is either of the following:
(i) A person employed on a full-time basis by the

10100SB1300ham005 - 118 - LRB101 07899 RPS 64619 a
Illinois Department of Transportation in the position
of highway maintainer, highway maintenance lead
worker, highway maintenance lead/lead worker, heavy
construction equipment operator, power shovel
operator, or bridge mechanic; and whose principal
responsibility is to perform, on the roadway, the
actual maintenance necessary to keep the highways that
form a part of the State highway system in serviceable
condition for vehicular traffic.
(ii) A person employed on a full-time basis by the
Illinois State Toll Highway Authority in the position
of equipment operator/laborer H-4, equipment
operator/laborer H-6, welder H-4, welder H-6,
mechanical/electrical H-4, mechanical/electrical H-6,
water/sewer H-4, water/sewer H-6, sign maker/hanger
H-4, sign maker/hanger H-6, roadway lighting H-4,
roadway lighting H-6, structural H-4, structural H-6,
painter H-4, or painter H-6; and whose principal
responsibility is to perform, on the roadway, the
actual maintenance necessary to keep the Authority's
tollways in serviceable condition for vehicular
traffic.
(19) The term "security employee of the Department of
Innovation and Technology" means a person who was a
security employee of the Department of Corrections or the
Department of Juvenile Justice, was transferred to the

10100SB1300ham005 - 119 - LRB101 07899 RPS 64619 a
Department of Innovation and Technology pursuant to
Executive Order 2016-01, and continues to perform similar
job functions under that Department.
(20) "Transferred employee" means an employee who was
transferred to the Department of Central Management
Services by Executive Order No. 2003-10 or Executive Order
No. 2004-2 or transferred to the Department of Innovation
and Technology by Executive Order No. 2016-1, or both, and
was entitled to eligible creditable service for services
immediately preceding the transfer.
(d) A security employee of the Department of Corrections or
the Department of Juvenile Justice, a security employee of the
Department of Human Services who is not a mental health police
officer, and a security employee of the Department of
Innovation and Technology shall not be eligible for the
alternative retirement annuity provided by this Section unless
he or she meets the following minimum age and service
requirements at the time of retirement:
(i) 25 years of eligible creditable service and age 55;
or
(ii) beginning January 1, 1987, 25 years of eligible
creditable service and age 54, or 24 years of eligible
creditable service and age 55; or
(iii) beginning January 1, 1988, 25 years of eligible
creditable service and age 53, or 23 years of eligible
creditable service and age 55; or

10100SB1300ham005 - 120 - LRB101 07899 RPS 64619 a
(iv) beginning January 1, 1989, 25 years of eligible
creditable service and age 52, or 22 years of eligible
creditable service and age 55; or
(v) beginning January 1, 1990, 25 years of eligible
creditable service and age 51, or 21 years of eligible
creditable service and age 55; or
(vi) beginning January 1, 1991, 25 years of eligible
creditable service and age 50, or 20 years of eligible
creditable service and age 55.
Persons who have service credit under Article 16 of this
Code for service as a security employee of the Department of
Corrections or the Department of Juvenile Justice, or the
Department of Human Services in a position requiring
certification as a teacher may count such service toward
establishing their eligibility under the service requirements
of this Section; but such service may be used only for
establishing such eligibility, and not for the purpose of
increasing or calculating any benefit.
(e) If a member enters military service while working in a
position in which eligible creditable service may be earned,
and returns to State service in the same or another such
position, and fulfills in all other respects the conditions
prescribed in this Article for credit for military service,
such military service shall be credited as eligible creditable
service for the purposes of the retirement annuity prescribed
in this Section.

10100SB1300ham005 - 121 - LRB101 07899 RPS 64619 a
(f) For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before October 1, 1975 as a covered employee in the
position of special agent, conservation police officer, mental
health police officer, or investigator for the Secretary of
State, shall be deemed to have been service as a noncovered
employee, provided that the employee pays to the System prior
to retirement an amount equal to (1) the difference between the
employee contributions that would have been required for such
service as a noncovered employee, and the amount of employee
contributions actually paid, plus (2) if payment is made after
July 31, 1987, regular interest on the amount specified in item
(1) from the date of service to the date of payment.
For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before January 1, 1982 as a covered employee in the
position of investigator for the Department of Revenue shall be
deemed to have been service as a noncovered employee, provided
that the employee pays to the System prior to retirement an
amount equal to (1) the difference between the employee
contributions that would have been required for such service as
a noncovered employee, and the amount of employee contributions
actually paid, plus (2) if payment is made after January 1,
1990, regular interest on the amount specified in item (1) from
the date of service to the date of payment.
(g) A State policeman may elect, not later than January 1,

10100SB1300ham005 - 122 - LRB101 07899 RPS 64619 a
1990, to establish eligible creditable service for up to 10
years of his service as a policeman under Article 3, by filing
a written election with the Board, accompanied by payment 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 System under Section 3-110.5,
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
Subject to the limitation in subsection (i), a State
policeman may elect, not later than July 1, 1993, to establish
eligible creditable service for up to 10 years of his service
as a member of the County Police Department under Article 9, by
filing a written election with the Board, accompanied by
payment 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 System under Section 9-121.10
and the amounts that would have been contributed had those
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
(h) Subject to the limitation in subsection (i), a State
policeman or investigator for the Secretary of State may elect

10100SB1300ham005 - 123 - LRB101 07899 RPS 64619 a
to establish eligible creditable service for up to 12 years of
his service as a policeman under Article 5, by filing a written
election with the Board on or before January 31, 1992, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 5-236, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 10 years of service as a sheriff's
law enforcement employee under Article 7, by filing a written
election with the Board on or before January 31, 1993, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 7-139.7, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
Subject to the limitation in subsection (i), a State

10100SB1300ham005 - 124 - LRB101 07899 RPS 64619 a
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 5 years of service as a police
officer under Article 3, a policeman under Article 5, a
sheriff's law enforcement employee under Article 7, a member of
the county police department under Article 9, or a police
officer under Article 15 by filing a written election with the
Board and paying to the System an amount to be determined by
the Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
Subject to the limitation in subsection (i), an
investigator for the Office of the Attorney General, or an
investigator for the Department of Revenue, may elect to
establish eligible creditable service for up to 5 years of
service as a police officer under Article 3, a policeman under
Article 5, a sheriff's law enforcement employee under Article
7, or a member of the county police department under Article 9
by filing a written election with the Board within 6 months
after August 25, 2009 (the effective date of Public Act 96-745)
and paying to the System an amount to be determined by the

10100SB1300ham005 - 125 - LRB101 07899 RPS 64619 a
Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
amounts that would have been contributed had such contributions
been made at the rates applicable to State policemen, plus (ii)
interest thereon at the actuarially assumed rate for each year,
compounded annually, from the date of service to the date of
payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, investigator for the
Office of the Attorney General, an investigator for the
Department of Revenue, or investigator for the Secretary of
State may elect to establish eligible creditable service for up
to 5 years of service as a person employed by a participating
municipality to perform police duties, or law enforcement
officer employed on a full-time basis by a forest preserve
district under Article 7, a county corrections officer, or a
court services officer under Article 9, by filing a written
election with the Board within 6 months after August 25, 2009
(the effective date of Public Act 96-745) and paying to the
System an amount to be determined by the Board, equal to (i)
the difference between the amount of employee and employer
contributions transferred to the System under Sections 7-139.8
and 9-121.10 and the amounts that would have been contributed
had such contributions been made at the rates applicable to
State policemen, plus (ii) interest thereon at the actuarially

10100SB1300ham005 - 126 - LRB101 07899 RPS 64619 a
assumed rate for each year, compounded annually, from the date
of service to the date of payment.
(i) The total amount of eligible creditable service
established by any person under subsections (g), (h), (j), (k),
and (l), (l-5), and (o) of this Section shall not exceed 12
years.
(j) Subject to the limitation in subsection (i), an
investigator for the Office of the State's Attorneys Appellate
Prosecutor or a controlled substance inspector may elect to
establish eligible creditable service for up to 10 years of his
service as a policeman under Article 3 or a sheriff's law
enforcement employee under Article 7, by filing a written
election with the Board, accompanied by payment of an amount to
be determined by the Board, equal to (1) the difference between
the amount of employee and employer contributions transferred
to the System under Section 3-110.6 or 7-139.8, and the amounts
that would have been contributed had such contributions been
made at the rates applicable to State policemen, plus (2)
interest thereon at the effective rate for each year,
compounded annually, from the date of service to the date of
payment.
(k) Subject to the limitation in subsection (i) of this
Section, an alternative formula employee may elect to establish
eligible creditable service for periods spent as a full-time
law enforcement officer or full-time corrections officer
employed by the federal government or by a state or local

10100SB1300ham005 - 127 - LRB101 07899 RPS 64619 a
government located outside of Illinois, for which credit is not
held in any other public employee pension fund or retirement
system. To obtain this credit, the applicant must file a
written application with the Board by March 31, 1998,
accompanied by evidence of eligibility acceptable to the Board
and payment of an amount to be determined by the Board, equal
to (1) employee contributions for the credit being established,
based upon the applicant's salary on the first day as an
alternative formula employee after the employment for which
credit is being established and the rates then applicable to
alternative formula employees, plus (2) an amount determined by
the Board to be the employer's normal cost of the benefits
accrued for the credit being established, plus (3) regular
interest on the amounts in items (1) and (2) from the first day
as an alternative formula employee after the employment for
which credit is being established to the date of payment.
(l) Subject to the limitation in subsection (i), a security
employee of the Department of Corrections may elect, not later
than July 1, 1998, to establish eligible creditable service for
up to 10 years of his or her service as a policeman under
Article 3, by filing a written election with the Board,
accompanied by payment 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 System
under Section 3-110.5, and the amounts that would have been
contributed had such contributions been made at the rates

10100SB1300ham005 - 128 - LRB101 07899 RPS 64619 a
applicable to security employees of the Department of
Corrections, plus (ii) interest thereon at the effective rate
for each year, compounded annually, from the date of service to
the date of payment.
(l-5) Subject to the limitation in subsection (i) of this
Section, a State policeman may elect to establish eligible
creditable service for up to 5 years of service as a full-time
law enforcement officer employed by the federal government or
by a state or local government located outside of Illinois for
which credit is not held in any other public employee pension
fund or retirement system. To obtain this credit, the applicant
must file a written application with the Board no later than 3
years after the effective date of this amendatory Act of the
101st General Assembly, accompanied by evidence of eligibility
acceptable to the Board and payment of an amount to be
determined by the Board, equal to (1) employee contributions
for the credit being established, based upon the applicant's
salary on the first day as an alternative formula employee
after the employment for which credit is being established and
the rates then applicable to alternative formula employees,
plus (2) an amount determined by the Board to be the employer's
normal cost of the benefits accrued for the credit being
established, plus (3) regular interest on the amounts in items
(1) and (2) from the first day as an alternative formula
employee after the employment for which credit is being
established to the date of payment.

10100SB1300ham005 - 129 - LRB101 07899 RPS 64619 a
(m) The amendatory changes to this Section made by this
amendatory Act of the 94th General Assembly apply only to: (1)
security employees of the Department of Juvenile Justice
employed by the Department of Corrections before the effective
date of this amendatory Act of the 94th General Assembly and
transferred to the Department of Juvenile Justice by this
amendatory Act of the 94th General Assembly; and (2) persons
employed by the Department of Juvenile Justice on or after the
effective date of this amendatory Act of the 94th General
Assembly who are required by subsection (b) of Section 3-2.5-15
of the Unified Code of Corrections to have any bachelor's or
advanced degree from an accredited college or university or, in
the case of persons who provide vocational training, who are
required to have adequate knowledge in the skill for which they
are providing the vocational training.
(n) A person employed in a position under subsection (b) of
this Section who has purchased service credit under subsection
(j) of Section 14-104 or subsection (b) of Section 14-105 in
any other capacity under this Article may convert up to 5 years
of that service credit into service credit covered under this
Section by paying to the Fund an amount equal to (1) the
additional employee contribution required under Section
14-133, plus (2) the additional employer contribution required
under Section 14-131, plus (3) interest on items (1) and (2) at
the actuarially assumed rate from the date of the service to
the date of payment.

10100SB1300ham005 - 130 - LRB101 07899 RPS 64619 a
(o) Subject to the limitation in subsection (i), a
conservation police officer, investigator for the Secretary of
State, Commerce Commission police officer, or arson
investigator subject to subsection (g) of Section 1-160 may
elect to convert up to 8 years of service credit established
before the effective date of this amendatory Act of the 101st
General Assembly as a conservation police officer,
investigator for the Secretary of State, Commerce Commission
police officer, or arson investigator under this Article into
eligible creditable service by filing a written election with
the Board no later than one year after the effective date of
this amendatory Act of the 101st General Assembly, accompanied
by payment of an amount to be determined by the Board equal to
(i) the difference between the amount of the employee
contributions actually paid for that service and the amount of
the employee contributions that would have been paid had the
employee contributions been made as a noncovered employee
serving in a position in which eligible creditable service, as
defined in this Section, may be earned, plus (ii) interest
thereon at the effective rate for each year, compounded
annually, from the date of service to the date of payment.
(Source: P.A. 100-19, eff. 1-1-18; 100-611, eff. 7-20-18.)
(40 ILCS 5/14-152.1)
Sec. 14-152.1. Application and expiration of new benefit
increases.

10100SB1300ham005 - 131 - LRB101 07899 RPS 64619 a
(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 June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
96-37, Public Act 100-23, Public Act 100-587, or Public Act
100-611, or Public Act 101-10, or this amendatory Act of the
101st General Assembly this amendatory Act of the 101st 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

10100SB1300ham005 - 132 - LRB101 07899 RPS 64619 a
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

10100SB1300ham005 - 133 - LRB101 07899 RPS 64619 a
benefit increase was in effect.
(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
100-611, eff. 7-20-18; 101-10, eff. 6-5-19; 101-81, eff.
7-12-19; revised 7-24-19.)
(40 ILCS 5/15-120) (from Ch. 108 1/2, par. 15-120)
Sec. 15-120. Beneficiary; survivor annuitant under
portable benefit package. "Beneficiary": The person or persons
designated by the participant or annuitant in the last written
designation on file with the board; or if no person so
designated survives, or if no designation is on file, the
estate of the participant or annuitant. Acceptance by the
participant of a refund of accumulated contributions or an
accelerated pension benefit payment under Section 15-185.5
shall result in cancellation of all beneficiary designations
previously filed. A spouse whose marriage was dissolved shall
be disqualified as beneficiary unless the spouse was designated
as beneficiary after the effective date of the dissolution of
marriage.
After a joint and survivor annuity commences under the
portable benefit package, the survivor annuitant of a joint and
survivor annuity is not disqualified, and may not be removed,
as the survivor annuitant by a dissolution of the survivor's
marriage with the participant or annuitant.
(Source: P.A. 91-887, eff. 7-6-00.)

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(40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
Sec. 15-135. Retirement annuities - Conditions.
(a) This subsection (a) applies only to a Tier 1 member. A
participant who retires in one of the following specified years
with the specified amount of service is entitled to a
retirement annuity at any age under the retirement program
applicable to the participant:
35 years if retirement is in 1997 or before;
34 years if retirement is in 1998;
33 years if retirement is in 1999;
32 years if retirement is in 2000;
31 years if retirement is in 2001;
30 years if retirement is in 2002 or later.
A participant with 8 or more years of service after
September 1, 1941, is entitled to a retirement annuity on or
after attainment of age 55.
A participant with at least 5 but less than 8 years of
service after September 1, 1941, is entitled to a retirement
annuity on or after attainment of age 62.
A participant who has at least 25 years of service in this
system as a police officer or firefighter is entitled to a
retirement annuity on or after the attainment of age 50, if
Rule 4 of Section 15-136 is applicable to the participant.
(a-5) A Tier 2 member is entitled to a retirement annuity
upon written application if he or she has attained age 67 and
has at least 10 years of service credit and is otherwise

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eligible under the requirements of this Article. A Tier 2
member who has attained age 62 and has at least 10 years of
service credit and is otherwise eligible under the requirements
of this Article may elect to receive the lower retirement
annuity provided in subsection (b-5) of Section 15-136 of this
Article.
(a-10) A Tier 2 member who has at least 20 years of service
in this system as a police officer or firefighter is entitled
to a retirement annuity upon written application on or after
the attainment of age 60 if Rule 4 of Section 15-136 is
applicable to the participant. The changes made to this
subsection by this amendatory Act of the 101st General Assembly
apply retroactively to January 1, 2011.
(b) The annuity payment period shall begin on the date
specified by the participant or the recipient of a disability
retirement annuity submitting a written application. For a
participant, the date on which the annuity payment period
begins shall not be prior to termination of employment or more
than one year before the application is received by the board;
however, if the participant is not an employee of an employer
participating in this System or in a participating system as
defined in Article 20 of this Code on April 1 of the calendar
year next following the calendar year in which the participant
attains age 70 1/2, the annuity payment period shall begin on
that date regardless of whether an application has been filed.
For a recipient of a disability retirement annuity, the date on

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which the annuity payment period begins shall not be prior to
the discontinuation of the disability retirement annuity under
Section 15-153.2.
(c) An annuity is not payable if the amount provided under
Section 15-136 is less than $10 per month.
(Source: P.A. 100-556, eff. 12-8-17.)
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
Rule 1: The retirement annuity shall be 1.67% of final rate
of earnings for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.

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Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the effective rate
of interest in effect at the time the retirement annuity
begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins;
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.
With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the

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participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his
or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or

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more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity
for all other service shall be computed under Rule 1. A Tier 2
member is eligible for a retirement annuity calculated under
Rule 4 only if that Tier 2 member meets the service
requirements for that benefit calculation as prescribed under
this Rule 4 in addition to the applicable age requirement under
subsection (a-10) (a-5) of Section 15-135.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is an
employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of

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the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee of
the University of Illinois in a position other than police
officer or firefighter, from the date of that transfer
until the employee's next termination of service with the
University of Illinois.
(b) For a Tier 1 member, the retirement annuity provided
under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
month the participant is under age 60 at the time of
retirement. However, this reduction shall not apply in the
following cases:
(1) For a disabled participant whose disability
benefits have been discontinued because he or she has
exhausted eligibility for disability benefits under clause
(6) of Section 15-152;
(2) For a participant who has at least the number of
years of service required to retire at any age under
subsection (a) of Section 15-135; or
(3) For that portion of a retirement annuity which has
been provided on account of service of the participant
during periods when he or she performed the duties of a
police officer or firefighter, if these duties were
performed for at least 5 years immediately preceding the

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date the retirement annuity is to begin.
(b-5) The retirement annuity of a Tier 2 member who is
retiring under Rule 1 or 3 after attaining age 62 with at least
10 years of service credit shall be reduced by 1/2 of 1% for
each full month that the member's age is under age 67.
(c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
(d) A Tier 1 member whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in his
or her retirement annuity as follows:
Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, or Rule 4 contained in this Section, multiplied by the
number of full months which elapsed from the date the
retirement annuity payments began to January 1, 1972, plus
0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the

10100SB1300ham005 - 142 - LRB101 07899 RPS 64619 a
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during
the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
Section. The change made under this subsection by P.A. 81-970
is effective January 1, 1980 and applies to each annuitant
whose status as an employee terminates before or after that
date.
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 all increases previously granted under this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard to
whether status as an employee terminated before that date.
(d-5) A retirement annuity of a Tier 2 member shall receive
annual increases on the January 1 occurring either on or after
the attainment of age 67 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

10100SB1300ham005 - 143 - LRB101 07899 RPS 64619 a
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.
(e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987, or
the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
(f) A participant is entitled to such additional annuity as
may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant

10100SB1300ham005 - 144 - LRB101 07899 RPS 64619 a
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
(g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in whole
or in part to an employer, and (2) a participant transfers
employment from such governmental unit to such employer within
6 months after the transfer of the function, and (3) the sum of
(A) the annuity payable to the participant under Rule 1, 2, or
3 of this Section (B) all proportional annuities payable to the
participant by all other retirement systems covered by Article
20, and (C) the initial primary insurance amount to which the
participant is entitled under the Social Security Act, is less
than the retirement annuity which would have been payable if
all of the participant's pension credits validated under
Section 20-109 had been validated under this system, a
supplemental annuity equal to the difference in such amounts
shall be payable to the participant.
(h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.

10100SB1300ham005 - 145 - LRB101 07899 RPS 64619 a
(i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8�
per year of creditable service times the number of years that
have elapsed since the annuity began.
(j) The changes made to this Section by this amendatory Act
of the 101st General Assembly apply retroactively to January 1,
2011.
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
98-92, eff. 7-16-13.)
(40 ILCS 5/15-159) (from Ch. 108 1/2, par. 15-159)
Sec. 15-159. Board created.
(a) A board of trustees constituted as provided in this
Section shall administer this System. The board shall be known
as the Board of Trustees of the State Universities Retirement
System.
(b) (Blank).
(c) (Blank).
(d) Beginning on the 90th day after April 3, 2009 (the
effective date of Public Act 96-6), the Board of Trustees shall
be constituted as follows:
(1) The Chairperson of the Board of Higher Education,
who shall act as chairperson of this Board.
(2) Four trustees appointed by the Governor with the
advice and consent of the Senate who may not be members of

10100SB1300ham005 - 146 - LRB101 07899 RPS 64619 a
the system or hold an elective State office and who shall
serve for a term of 6 years, except that the terms of the
initial appointees under this subsection (d) shall be as
follows: 2 for a term of 3 years and 2 for a term of 6
years.
(3) Four active participants of the system to be
elected from the contributing membership of the system by
the contributing members, no more than 2 of which may be
from any of the University of Illinois campuses, who shall
serve for a term of 6 years, except that the terms of the
initial electees shall be as follows: 2 for a term of 3
years and 2 for a term of 6 years.
(4) Two annuitants of the system who have been
annuitants for at least one full year, to be elected from
and by the annuitants of the system, no more than one of
which may be from any of the University of Illinois
campuses, who shall serve for a term of 6 years, except
that the terms of the initial electees shall be as follows:
one for a term of 3 years and one for a term of 6 years.
The chairperson of the Board shall be appointed by the
Governor from among the trustees.
For the purposes of this Section, the Governor may make a
nomination and the Senate may confirm the nominee in advance of
the commencement of the nominee's term of office.
(e) The 6 elected trustees shall be elected within 90 days
after April 3, 2009 (the effective date of Public Act 96-6) for

10100SB1300ham005 - 147 - LRB101 07899 RPS 64619 a
a term beginning on the 90th day after that effective date.
Trustees shall be elected thereafter as terms expire for a
6-year term beginning July 15 next following their election,
and such election shall be held on May 1, or on May 2 when May 1
falls on a Sunday. The board may establish rules for the
election of trustees to implement the provisions of Public Act
96-6 and for future elections. Candidates for the participating
trustee shall be nominated by petitions in writing, signed by
not less than 400 participants with their addresses shown
opposite their names. Candidates for the annuitant trustee
shall be nominated by petitions in writing, signed by not less
than 100 annuitants with their addresses shown opposite their
names. If there is more than one qualified nominee for each
elected trustee, then the board shall conduct a secret ballot
election by mail for that trustee, in accordance with rules as
established by the board. If there is only one qualified person
nominated by petition for each elected trustee, then the
election as required by this Section shall not be conducted for
that trustee and the board shall declare such nominee duly
elected. A vacancy occurring in the elective membership of the
board shall be filled for the unexpired term by the elected
trustees serving on the board for the remainder of the term.
Nothing in this subsection shall preclude the adoption of rules
providing for internet or phone balloting in addition, or as an
alternative, to election by mail.
(f) A vacancy in the appointed membership on the board of

10100SB1300ham005 - 148 - LRB101 07899 RPS 64619 a
trustees caused by resignation, death, expiration of term of
office, or other reason shall be filled by a qualified person
appointed by the Governor for the remainder of the unexpired
term.
(g) Trustees (other than the trustees incumbent on June 30,
1995 or as provided in subsection (c) of this Section) shall
continue in office until their respective successors are
appointed and have qualified, except that a trustee appointed
to one of the participant positions shall be disqualified
immediately upon the termination of his or her status as a
participant and a trustee appointed to one of the annuitant
positions shall be disqualified immediately upon the
termination of his or her status as an annuitant receiving a
retirement annuity.
(h) Each trustee must take an oath of office before a
notary public of this State and shall qualify as a trustee upon
the presentation to the board of a certified copy of the oath.
The oath must state that the person will diligently and
honestly administer the affairs of the retirement system, and
will not knowingly violate or willfully permit to be violated
any provisions of this Article.
Each trustee shall serve without compensation but shall be
reimbursed for expenses necessarily incurred in attending
board meetings and carrying out his or her duties as a trustee
or officer of the system.
(Source: P.A. 98-92, eff. 7-16-13.)

10100SB1300ham005 - 149 - LRB101 07899 RPS 64619 a
(40 ILCS 5/15-198)
Sec. 15-198. 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 June 1, 2005 (the
effective date of Public Act 94-4) this amendatory Act of the
94th General Assembly. "New benefit increase", however, does
not include any benefit increase resulting from the changes
made to Article 1 or this Article by Public Act 100-23, Public
Act 100-587, or Public Act 100-769, or Public Act 101-10, or
this amendatory Act of the 101st General Assembly this
amendatory Act of the 101st 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

10100SB1300ham005 - 150 - LRB101 07899 RPS 64619 a
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

10100SB1300ham005 - 151 - LRB101 07899 RPS 64619 a
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. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
100-769, eff. 8-10-18; 101-10, eff. 6-5-19; 101-81, eff.
7-12-19; revised 8-1-19.)
(40 ILCS 5/16-163) (from Ch. 108 1/2, par. 16-163)
Sec. 16-163. Board created. A board of 15 13 members
constitutes the board of trustees authorized to carry out the
provisions of this Article and is responsible for the general
administration of the System. The board shall be known as the
Board of Trustees of the Teachers' Retirement System of the
State of Illinois. The board shall be composed of the
Superintendent of Education, ex officio, who shall be the
president of the board; 7 6 persons, not members of the System,
to be appointed by the Governor, who shall hold no elected
State office; 5 4 persons who, at the time of their election,
are teachers as defined in Section 16-106, elected by the
contributing members; and 2 annuitant members elected by the
annuitants of the System, as provided in Section 16-165. The
president of the board shall be appointed by the Governor from
among the trustees.
(Source: P.A. 96-6, eff. 4-3-09.)

10100SB1300ham005 - 152 - LRB101 07899 RPS 64619 a
(40 ILCS 5/16-164) (from Ch. 108 1/2, par. 16-164)
Sec. 16-164. Board; appointed members; vacancies Board -
appointed members - vacancies. Terms of office for the
appointed members shall begin on July 15 of an even-numbered
year, except that the terms of office for members appointed
pursuant to this amendatory Act of the 96th General Assembly
shall begin upon being confirmed by the Senate. The Governor
shall appoint 3 members as trustees with the advice and consent
of the Senate in each even-numbered year who shall hold office
for a term of 4 years, except that, of the members appointed
pursuant to this amendatory Act of the 96th General Assembly, 3
members shall be appointed for a term ending July 14, 2012 and
3 members shall be appointed for a term ending July 14, 2014.
The Governor shall appoint the additional member authorized
under this amendatory Act of the 101st General Assembly with
the advice and consent of the Senate for a term beginning on
July 15, 2020 and ending July 14, 2022, and successors shall
hold office for a term of 4 years. Each such appointee shall
reside in and be a taxpayer in the territory covered by this
system, shall be interested in public school welfare, and
experienced and competent in financial and business
management. A vacancy in the term of an appointed trustee shall
be filled for the unexpired term by appointment of the
Governor.
Notwithstanding any provision of this Section to the

10100SB1300ham005 - 153 - LRB101 07899 RPS 64619 a
contrary, the term of office of each member of the Board
appointed by the Governor who is sitting on the Board on the
effective date of this amendatory Act of the 96th General
Assembly is terminated on that effective date. A trustee
sitting on the Board on the effective date of this amendatory
Act of the 96th General Assembly may not hold over in office
for more than 60 days after the effective date of this
amendatory Act of the 96th General Assembly. Nothing in this
Section shall prevent the Governor from making a temporary
appointment or nominating a trustee holding office on the day
before the effective date of this amendatory Act of the 96th
General Assembly.
(Source: P.A. 96-6, eff. 4-3-09.)
(40 ILCS 5/16-165) (from Ch. 108 1/2, par. 16-165)
Sec. 16-165. Board; elected members; vacancies.
(a) In each odd-numbered year, if there are 2 teachers
whose terms of office will expire in that year, there shall be
elected 2 teachers who shall hold office for a term of 4 years
beginning July 15 next following their election or, if there
are 3 teachers whose terms of office will expire in that year,
there shall be elected 3 teachers who shall hold office for a
term of 4 years beginning July 15 next following their
election, in the manner provided under this Section. An elected
teacher member of the board who ceases to be a teacher as
defined in Section 16-106 may continue to serve on the board

10100SB1300ham005 - 154 - LRB101 07899 RPS 64619 a
for the remainder of the term to which he or she was elected.
(b) One elected annuitant trustee shall first be elected in
1987, and in every fourth year thereafter, for a term of 4
years beginning July 15 next following his or her election.
(c) The elected annuitant position created by this
amendatory Act of the 91st General Assembly shall be filled as
soon as possible in the manner provided for vacancies, for an
initial term ending July 15, 2001. One elected annuitant
trustee shall be elected in 2001, and in every fourth year
thereafter, for a term of 4 years beginning July 15 next
following his or her election.
The elected teacher position created by this amendatory Act
of the 101st General Assembly shall be for an initial 3-year
term and shall be filled in the manner provided for vacancies;
except that if the teacher candidate who receives the highest
number of votes and the incumbent members not up for election
belong to the same statewide teacher organization, then the
teacher candidate who receives the highest number of votes and
is not a member of that statewide teacher organization shall be
declared elected.
(d) Elections shall be held on May 1, unless May 1 falls on
a Saturday or Sunday, in which event the election shall be
conducted on the following Monday. Candidates shall be
nominated by petitions in writing, signed by not less than 500
teachers or annuitants, as the case may be, with their
addresses shown opposite their names. The petitions shall be

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filed with the board's Secretary not less than 90 nor more than
120 days prior to May 1. The Secretary shall determine their
validity not less than 75 days before the election.
(d-5) Beginning July 15, 2020, not more than 4 of the 5
teachers elected to the Board of Trustees may be active members
of the same statewide teacher organization. For the purposes of
this Section, "statewide teacher organization" means a teacher
organization (1) in which membership is not restricted to
persons living or teaching within a limited geographical area
of this State and (2) that has among its membership at least
10,000 persons who participate in this System.
Candidates for the teacher positions on the Board shall
indicate, in their nomination petitions and campaign
materials, which (if any) statewide teacher organizations they
have belonged to during the 5 years preceding the election.
(e) If, for either teacher or annuitant members, the number
of qualified nominees exceeds the number of available
positions, the system shall prepare an appropriate ballot with
the names of the candidates in alphabetical order and shall
mail one copy thereof, at least 10 days prior to the election
day, to each teacher or annuitant of this system as of the
latest date practicable, at the latest known address, together
with a return envelope addressed to the board and also a
smaller envelope marked "For Ballot Only", and a slip for
signature. Each voter, upon marking his ballot with a cross
mark in the square before the name of the person voted for,

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shall place the ballot in the envelope marked "For Ballot
Only", seal the envelope, write on the slip provided therefor
his signature and address, enclose both the slip and sealed
envelope containing the marked ballot in the return envelope
addressed to the board, and mail it. Whether a person is
eligible to vote for the teacher nominees or the annuitant
nominees shall be determined from system payroll records as of
March 1.
Upon receipt of the return envelopes, the system shall open
them and set aside unopened the envelopes marked "For Ballot
Only". On election day ballots shall be publicly opened and
counted by the trustees or canvassers appointed therefor. Each
vote cast for a candidate represents one vote only. No ballot
arriving after 10 o'clock a.m. on election day shall be
counted.
(e-3) The 2 teacher candidates or 3 teacher candidates,
whichever is applicable for that election, and the annuitant
candidate receiving the highest number of votes shall be
declared elected; except that beginning with the election in
2021, if the teacher candidate who receives the highest number
of votes and the incumbent members not up for election belong
to the same statewide teacher organization, then the second
teacher candidate to be declared elected shall be the candidate
who is not a member of the same statewide teacher organization
and receives the highest number of votes, unless there is no
such candidate or at least one candidate declared elected in

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the same election is not a member of that statewide teacher
organization. The board shall declare the results of the
election, keep a record thereof, and notify the candidates of
the results thereof within 30 days after the election.
(e-5) If, for either class of members, there are only as
many qualified nominees as there are positions available, the
balloting as described in this Section shall not be conducted
for those nominees, and the board shall declare them duly
elected.
(f) A vacancy occurring in the elective membership of the
board shall be filled for the unexpired term by a person
qualified for the vacant position, selected by the remaining
elected members of the board, if there are no more than 6
months remaining on the term. For a term with more than 6
months remaining, the Director of the Teachers' Retirement
System of the State of Illinois shall institute an election in
accordance with this Act to fill the unexpired term.
(Source: P.A. 94-423, eff. 8-2-05; 94-710, eff. 12-5-05;
95-331, eff. 8-21-07.)
(40 ILCS 5/Art. 22B heading new)
ARTICLE 22B. THE POLICE OFFICERS' PENSION INVESTMENT FUND
(40 ILCS 5/22B-101 new)
Sec. 22B-101. Establishment. The Police Officers' Pension
Investment Fund is created with authority to manage the

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reserves, funds, assets, securities, properties, and moneys of
the police pension funds created pursuant to Article 3 of this
Code, all as provided in this Article.
(40 ILCS 5/22B-102 new)
Sec. 22B-102. Definitions. For the purposes of this
Article, the following words and phrases shall have the meaning
ascribed to them unless the context requires otherwise.
(40 ILCS 5/22B-103 new)
Sec. 22B-103. Fund. "Fund" means the Police Officers'
Pension Investment Fund.
(40 ILCS 5/22B-104 new)
Sec. 22B-104. Transferor pension fund. "Transferor pension
fund" means any pension fund established pursuant to Article 3
of this Code.
(40 ILCS 5/22B-105 new)
Sec. 22B-105. Participating pension fund. "Participating
pension fund" means any pension fund established pursuant to
Article 3 of this Code that has transferred securities, funds,
assets, and moneys, and responsibility for custody and control
of those securities, funds, assets, and moneys, to the Fund
pursuant to Section 3-132.1.

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(40 ILCS 5/22B-106 new)
Sec. 22B-106. Pension fund assets. "Pension fund assets"
means the reserves, funds, assets, securities, and moneys of
any transferor pension fund.
(40 ILCS 5/22B-107 new)
Sec. 22B-107. Invest. "Invest" means to acquire, invest,
reinvest, exchange, or retain pension fund assets of the
transferor pension funds and to sell and manage the reserves,
funds, securities, moneys, or assets of the transferor pension
fund, all in accordance with this Article.
(40 ILCS 5/22B-108 new)
Sec. 22B-108. Investment advisor. "Investment advisor"
means any person or business entity that provides investment
advice to the Board on a personalized basis and with an
understanding of the policies and goals of the Board.
"Investment advisor" does not include any person or business
entity that provides statistical or general market research
data available for purchase or use by others.
(40 ILCS 5/22B-112 new)
Sec. 22B-112. Transition period. "Transition period" means
the period immediately following the effective date of this
amendatory Act of the 101st General Assembly during which
pension fund assets, and responsibility for custody and control

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of those assets, will be transferred from the transferor
pension funds to the board, as described in Section 22B-120.
(40 ILCS 5/22B-113 new)
Sec. 22B-113. Illinois Municipal League. "Illinois
Municipal League" means the unincorporated, nonprofit,
nonpolitical association of Illinois cities, villages, and
incorporated towns described in Section 1-8-1 of the Illinois
Municipal Code.
(40 ILCS 5/22B-114 new)
Sec. 22B-114. Purpose, establishment, and governance. The
Fund is established to consolidate the transferor pension funds
to streamline investments and eliminate unnecessary and
redundant administrative costs, thereby ensuring more money is
available to fund pension benefits for the beneficiaries of the
transferor pension funds. The transition board trustees and
permanent board trustees of the Fund shall be fiduciaries for
the participants and beneficiaries of the participating
pension funds and shall discharge their duties with respect to
the retirement system or pension fund solely in the interest of
the participants and beneficiaries. Further, the transition
board trustees and permanent board trustees, acting prudently
and as fiduciaries, shall take all reasonable steps to ensure
that all of the transferor pension funds are treated equitably
and that the financial condition of one participating pension

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fund, including, but not limited to, pension benefit funding
levels and ratios, will have no effect on the financial
condition of any other transferor pension fund.
(40 ILCS 5/22B-115 new)
Sec. 22B-115. Board of Trustees of the Fund.
(a) No later than one month after the effective date of
this amendatory Act of the 101st General Assembly or as soon
thereafter as may be practicable, the Governor shall appoint,
by and with the advice and consent of the Senate, a transition
board of trustees consisting of 9 members as follows:
(1) three members representing municipalities who are
mayors, presidents, chief executive officers, chief
financial officers, or other officers, executives, or
department heads of municipalities and appointed from
among candidates recommended by the Illinois Municipal
League;
(2) three members representing participants and who
are participants, 2 of whom shall be appointed from among
candidates recommended by a statewide fraternal
organization representing more than 20,000 active and
retired police officers in the State of Illinois, and one
of whom shall be appointed from among candidates
recommended by a benevolent association representing sworn
police officers in the State of Illinois;
(3) two members representing beneficiaries and who are

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beneficiaries, one of whom shall be appointed from among
candidates recommended by a statewide fraternal
organization representing more than 20,000 active and
retired police officers in the State of Illinois, and one
of whom shall be appointed from among candidates
recommended by a benevolent association representing sworn
police officers in the State of Illinois; and
(4) one member who is a representative of the Illinois
Municipal League.
The transition board members shall serve until the initial
permanent board members are elected and qualified.
The transition board of trustees shall select the
chairperson of the transition board of trustees from among the
trustees for the duration of the transition board's tenure.
(b) The permanent board of trustees shall consist of 9
members as follows:
(1) Three members who are mayors, presidents, chief
executive officers, chief financial officers, or other
officers, executives, or department heads of
municipalities that have participating pension funds and
are elected by the mayors and presidents of municipalities
that have participating pension funds.
(2) Three members who are participants of
participating pension funds and are elected by the
participants of participating pension funds.
(3) Two members who are beneficiaries of participating

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pension funds and are elected by the beneficiaries of
participating pension funds.
(4) One member recommended by the Illinois Municipal
League who shall be appointed by the Governor with the
advice and consent of the Senate.
The permanent board of trustees shall select the
chairperson of the permanent board of trustees from among the
trustees for a term of 2 years. The holder of the office of
chairperson shall alternate between a person elected or
appointed under item (1) or (4) of this subsection (b) and a
person elected under item (2) or (3) of this subsection (b).
(c) Each trustee shall qualify by taking an oath of office
before the Secretary of State stating that he or she will
diligently and honestly administer the affairs of the board and
will not violate or knowingly permit the violation of any
provision of this Article.
(d) Trustees shall receive no salary for service on the
board but shall be reimbursed for travel expenses incurred
while on business for the board according to the standards in
effect for members of the Commission on Government Forecasting
and Accountability.
A municipality employing a police officer who is an elected
or appointed trustee of the board must allow reasonable time
off with compensation for the police officer to conduct
official business related to his or her position on the board,
including time for travel. The board shall notify the

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municipality in advance of the dates, times, and locations of
this official business. The Fund shall timely reimburse the
municipality for the reasonable costs incurred that are due to
the police officer's absence.
(e) No trustee shall have any interest in any brokerage
fee, commission, or other profit or gain arising out of any
investment directed by the board. This subsection does not
preclude ownership by any member of any minority interest in
any common stock or any corporate obligation in which an
investment is directed by the board.
(f) Notwithstanding any provision or interpretation of law
to the contrary, any member of the transition board may also be
elected or appointed as a member of the permanent board.
Notwithstanding any provision or interpretation of law to
the contrary, any trustee of a fund established under Article 3
of this Code may also be appointed as a member of the
transition board or elected or appointed as a member of the
permanent board.
The restriction in Section 3.1 of the Lobbyist Registration
Act shall not apply to a member of the transition board
appointed pursuant to item (4) of subsection (a) or to a member
of the permanent board appointed pursuant to item (4) of
subsection (b).
(40 ILCS 5/22B-116 new)
Sec. 22B-116. Conduct and administration of elections;

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terms of office.
(a) For the election of the permanent trustees, the
transition board shall administer the initial elections and the
permanent board shall administer all subsequent elections.
Each board shall develop and implement such procedures as it
determines to be appropriate for the conduct of such elections.
For the purposes of obtaining information necessary to conduct
elections under this Section, participating pension funds
shall cooperate with the Fund.
(b) All nominations for election shall be by petition. Each
petition for a trustee shall be executed as follows:
(1) for trustees to be elected by the mayors and
presidents of municipalities that have participating
pension funds, by at least 20 such mayors and presidents;
(2) for trustees to be elected by participants, by at
least 400 participants; and
(3) for trustees to be elected by beneficiaries, by at
least 100 beneficiaries.
(c) A separate ballot shall be used for each class of
trustee. The board shall prepare and send ballots and ballot
envelopes to the participants and beneficiaries eligible to
vote in accordance with rules adopted by the board. The ballots
shall contain the names of all candidates in alphabetical
order. The ballot envelope shall have on the outside a form of
certificate stating that the person voting the ballot is a
participant or beneficiary entitled to vote.

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Participants and beneficiaries, upon receipt of the
ballot, shall vote the ballot and place it in the ballot
envelope, seal the envelope, execute the certificate thereon,
and return the ballot to the Fund.
The board shall set a final date for ballot return, and
ballots received prior to that date in a ballot envelope with a
properly executed certificate and properly voted shall be valid
ballots.
The board shall set a day for counting the ballots and name
judges and clerks of election to conduct the count of ballots
and shall make any rules necessary for the conduct of the
count.
The candidate or candidates receiving the highest number of
votes for each class of trustee shall be elected. In the case
of a tie vote, the winner shall be determined in accordance
with procedures developed by the Department of Insurance.
In lieu of conducting elections via mail balloting as
described in this Section, the board may instead adopt rules to
provide for elections to be carried out solely via Internet
balloting or phone balloting. Nothing in this Section prohibits
the Fund from contracting with a third party to administer the
election in accordance with this Section.
(d) At any election, voting shall be as follows:
(1) Each person authorized to vote for an elected
trustee may cast one vote for each related position for
which such person is entitled to vote and may cast such

10100SB1300ham005 - 167 - LRB101 07899 RPS 64619 a
vote for any candidate or candidates on the ballot for such
trustee position.
(2) If only one candidate for each position is properly
nominated in petitions received, that candidate shall be
deemed the winner and no election under this Section shall
be required.
(3) The results shall be entered in the minutes of the
first meeting of the board following the tally of votes.
(e) The initial election for permanent trustees shall be
held and the permanent board shall be seated no later than 12
months after the effective date of this amendatory Act of the
101st General Assembly. Each subsequent election shall be held
no later than 30 days prior to the end of the term of the
incumbent trustees.
(f) The elected trustees shall each serve for terms of 4
years commencing on the first business day of the first month
after election; except that the terms of office of the
initially elected trustees shall be as follows:
(1) one trustee elected pursuant to item (1) of
subsection (b) of Section 22B-115 shall serve for a term of
2 years and 2 trustees elected pursuant to item (1) of
subsection (b) of Section 22B-115 shall serve for a term of
4 years;
(2) two trustees elected pursuant to item (2) of
subsection (b) of Section 22B-115 shall serve for a term of
2 years and one trustee elected pursuant to item (2) of

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subsection (b) of Section 22B-115 shall serve for a term of
4 years; and
(3) one trustee elected pursuant to item (3) of
subsection (b) of Section 22B-115 shall serve for a term of
2 years and one trustee elected pursuant to item (3) of
subsection (b) of Section 22B-115 shall serve for a term of
4 years.
(g) The trustee appointed pursuant to item (4) of
subsection (b) of Section 22B-115 shall serve for a term of 2
years commencing on the first business day of the first month
after the election of the elected trustees.
(h) A member of the board who was elected pursuant to item
(1) of subsection (b) of Section 22B-115 who ceases to serve as
a mayor, president, chief executive officer, chief financial
officer, or other officer, executive, or department head of a
municipality that has a participating pension fund shall not be
eligible to serve as a member of the board and his or her
position shall be deemed vacant. A member of the board who was
elected by the participants of participating pension funds who
ceases to be a participant may serve the remainder of his or
her elected term.
For a vacancy of an elected trustee occurring with an
unexpired term of 6 months or more, an election shall be
conducted for the vacancy in accordance with Section 22B-115
and this Section.
For a vacancy of an elected trustee occurring with an

10100SB1300ham005 - 169 - LRB101 07899 RPS 64619 a
unexpired term of less than 6 months, the vacancy shall be
filled by appointment by the board for the unexpired term as
follows: a vacancy of a member elected pursuant to item (1) of
subsection (b) of Section 22B-115 shall be filled by a mayor,
president, chief executive officer, chief financial officer,
or other officer, executive, or department head of a
municipality that has a participating pension fund; a vacancy
of a member elected pursuant to item (2) of subsection (b) of
Section 22B-115 shall be filled by a participant of a
participating pension fund; and a vacancy of a member elected
under item (3) of subsection (b) of Section 22B-115 shall be
filled by a beneficiary of a participating pension fund.
Vacancies among the appointed trustees shall be filled for
unexpired terms by appointment in like manner as for the
original appointments.
(40 ILCS 5/22B-117 new)
Sec. 22B-117. Meetings of the board.
(a) The transition board and the permanent board shall each
meet at least quarterly and otherwise upon written request of
either the Chairperson or 3 other members. The Chairperson
shall preside over meetings of the board. The executive
director and personnel of the board shall prepare agendas and
materials and required postings for meetings of the board.
(b) Six members of the board shall constitute a quorum.
(c) All actions taken by the transition board and the

10100SB1300ham005 - 170 - LRB101 07899 RPS 64619 a
permanent board shall require a vote of least 5 trustees,
except that the following shall require a vote of at least 6
trustees: the adoption of actuarial assumptions; the selection
of the chief investment officer, fiduciary counsel, or a
consultant as defined under Section 1-101.5 of this Code; the
adoption of rules for the conduct of election of trustees; and
the adoption of asset allocation policies and investment
policies.
(40 ILCS 5/22B-118 new)
Sec. 22B-118. Operation and administration of the Fund.
(a) The operation and administration of the Fund shall be
managed by an executive director. No later than 2 months after
the transition board is appointed or as soon thereafter as may
be practicable, the transition board shall appoint an interim
executive director who shall serve until a permanent executive
director is appointed by the board, with such appointment to be
made no later than 6 months after the end of the transition
period. The executive director shall act subject to and under
the supervision of the board and the board shall fix the
compensation of the executive director.
(b) The board may appoint one or more custodians to
facilitate the transfer of pension fund assets during the
transition period, and subsequently to provide custodial and
related fiduciary services on behalf of the board, and enter
into contracts for such services. The board may also appoint

10100SB1300ham005 - 171 - LRB101 07899 RPS 64619 a
external legal counsel and an independent auditing firm and may
appoint investment advisors and other consultants as it
determines to be appropriate and enter into contracts for such
services. With approval of the board, the executive director
may retain such other consultants, advisors, fiduciaries, and
service providers as may be desirable and enter into contracts
for such services.
(c) The board shall separately calculate account balances
for each participating pension fund. The operations and
financial condition of each participating pension fund account
shall not affect the account balance of any other participating
pension fund. Further, investment returns earned by the Fund
shall be allocated and distributed pro rata among each
participating pension fund account in accordance with the value
of the pension fund assets attributable to each fund.
(d) With approval of the board, the executive director may
employ such personnel, professional or clerical, as may be
desirable and fix their compensation. The appointment and
compensation of the personnel, including the executive
director, shall not be subject to the Personnel Code.
(e) The board shall annually adopt a budget to support its
operations and administration. The board shall apply moneys
derived from the pension fund assets transferred and under its
control to pay the costs and expenses incurred in the operation
and administration of the Fund. The board shall from time to
time transfer moneys and other assets to the participating

10100SB1300ham005 - 172 - LRB101 07899 RPS 64619 a
pension funds as required for the participating pension funds
to pay expenses, benefits, and other required payments to
beneficiaries in the amounts and at the times prescribed in
this Code.
(f) The board may exercise any of the powers granted to
boards of trustees of pension funds under Sections 1-107 and
1-108 of this Code and may by resolution provide for the
indemnification of its members and any of its officers,
advisors, or employees in a manner consistent with those
Sections.
(g) An office for meetings of the board and for its
administrative personnel shall be established at any suitable
place within the State as may be selected by the board. All
books and records of the board shall be kept in such office.
(h) The board shall contract for a blanket fidelity bond in
the penal sum of not less than $1,000,000 to cover members of
the board of trustees, the executive director, and all other
employees of the board, conditioned for the faithful
performance of the duties of their respective offices, the
premium on which shall be paid by the board.
(40 ILCS 5/22B-119 new)
Sec. 22B-119. Adoption of rules. The board shall adopt such
rules (not inconsistent with this Code) as in its judgment are
desirable to implement and properly administer this Article.
Such rules shall specifically provide for the following: (1)

10100SB1300ham005 - 173 - LRB101 07899 RPS 64619 a
the implementation of the transition process described in
Section 22B-120; (2) the process by which the participating
pension funds may request transfer of funds; (3) the process
for the transfer in, receipt for, and investment of pension
assets received by the Fund after the transition period from
the participating pension funds; (4) the process by which
contributions from municipalities for the benefit of the
participating pension funds may, but are not required to, be
directly transferred to the Fund; and (5) compensation and
benefits for its employees. A copy of the rules adopted by the
Fund shall be filed with the Secretary of State and the
Department of Insurance. The adoption and effectiveness of such
rules shall not be subject to Article 5 of the Illinois
Administrative Procedure Act.
(40 ILCS 5/22B-120 new)
Sec. 22B-120. Transition period; transfer of securities,
assets, and investment functions.
(a) The transition period shall commence on the effective
date of this amendatory Act of the 101st General Assembly and
shall end as determined by the board, consistent with and in
the application of its fiduciary responsibilities, but in no
event later than 30 months thereafter.
(b) The board may retain the services of custodians,
investment consultants, and other professional services it
deems prudent to implement the transition of assets described

10100SB1300ham005 - 174 - LRB101 07899 RPS 64619 a
in this Section. The permanent board of trustees shall not be
bound by any contract or agreement regarding such custodians,
investment consultants, or other professional services entered
into by the transition board of trustees.
(c) As soon as practicable after the effective date of this
amendatory Act of the 101st General Assembly, the board, in
cooperation with the Department of Insurance, shall audit the
investment assets of each transferor pension fund to determine
a certified investment asset list for each transferor pension
fund. The audit shall be performed by a certified public
accountant engaged by the board, and the board shall be
responsible for payment of the costs and expenses associated
with the audit. Upon completion of the audit for any transferor
pension fund, the board and the Department of Insurance shall
provide the certified investment asset list to that transferor
pension fund. Upon determination of the certified investment
asset list for any transferor pension fund, the board shall,
within 10 business days or as soon thereafter as may be
practicable as determined by the board, initiate the transfer
of assets from that transferor pension fund. Further and to
maintain accuracy of the certified investment asset list, upon
determination of the certified investment asset list for a
transferor pension fund, that fund shall not purchase or sell
any of its pension fund assets.
(d) When the Fund is prepared to receive pension fund
assets from any transferor pension fund, the executive director

10100SB1300ham005 - 175 - LRB101 07899 RPS 64619 a
shall notify in writing the board of trustees of that
transferor pension fund of the Fund's intent to assume
fiduciary control of those pension fund assets, and the date at
which it will assume such control and that the transferor
pension fund will cease to exercise fiduciary responsibility.
This letter shall be transmitted no less than 30 days prior to
the transfer date. A copy of the letter shall be transmitted to
the Department of Insurance. Upon receipt of the letter, the
transferor pension fund shall promptly notify its custodian, as
well as any and all entities with fiduciary control of any
portion of the pension assets. Each transferor pension fund
shall have sole fiduciary and statutory responsibility for the
management of its pension assets until the start of business on
the transfer date. At the start of business on the transfer
date, statutory and fiduciary responsibility for the
investment of pension fund assets shall shift exclusively to
the Fund and the Fund shall promptly and prudently transfer all
such pension fund assets to the board and terminate the
relationship with the local custodian of that transferor
pension fund. The Fund shall provide a receipt for the transfer
to the transferor pension fund within 30 days of the transfer
date.
As used in this subsection, "transfer date" means the date
at which the Fund will assume fiduciary control of the
transferor pension fund's assets and the transferor pension
fund will cease to exercise fiduciary responsibility.

10100SB1300ham005 - 176 - LRB101 07899 RPS 64619 a
(e) Within 90 days after the end of the transition period
or as soon thereafter as may be practicable as determined by
the board, the Fund and the Department of Insurance shall
cooperate in transferring to the Fund all pension fund assets
remaining in the custody of the transferor pension funds.
(f) The board shall adopt such rules as in its judgment are
desirable to implement the transition process, including,
without limitation, the transfer of the pension fund assets of
the transferor pension funds, the assumption of fiduciary
control of such assets by the Fund, and the termination of
relationships with local custodians. The adoption and
effectiveness of such rules and regulations shall not be
subject to Article 5 of the Illinois Administrative Procedure
Act.
(g) Within 6 months after the end of the transition period
or as soon thereafter as may be practicable as determined by
the board, the books, records, accounts, and securities of the
Fund shall be audited by a certified public accountant selected
by the board. This audit shall include, but not be limited to,
the following: (1) a full description of the investments
acquired, showing average costs; (2) a full description of the
securities sold or exchanged, showing average proceeds or other
conditions of an exchange; (3) gains or losses realized during
the period; (4) income from investments; and (5) administrative
expenses incurred by the board. This audit report shall be
published on the Fund's official website and filed with the

10100SB1300ham005 - 177 - LRB101 07899 RPS 64619 a
Department of Insurance.
(h) To provide funds for payment of the ordinary and
regular costs associated with the implementation of this
transition process, the Illinois Finance Authority is
authorized to loan to the Fund up to $7,500,000 of any of the
Authority's funds, including, but not limited to, funds in its
Illinois Housing Partnership Program Fund, its Industrial
Project Insurance Fund, or its Illinois Venture Investment
Fund, for such purpose. Such loan shall be repaid by the Fund
with an interest rate tied to the Federal Funds Rate or an
equivalent market established variable rate. The Fund and the
Illinois Finance Authority shall enter into a loan or similar
agreement that specifies the period of the loan, the payment
interval, procedures for making periodic loans, the variable
rate methodology to which the interest rate for loans should be
tied, the funds of the Illinois Finance Authority that will be
used to provide the loan, and such other terms that the Fund
and the Illinois Finance Authority reasonably believe to be
mutually beneficial. Such agreement shall be a public record
and the Fund shall post the terms of the agreement on its
official website.
(40 ILCS 5/22B-121 new)
Sec. 22B-121. Management and direction of investments.
(a) The board shall have the authority to manage the
pension fund assets of the transferor pension funds for the

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purpose of obtaining a total return on investments for the long
term.
(b) The authority of the board to manage pension fund
assets and the liability shall begin when there has been a
physical transfer of the pension fund assets to the Fund and
placed in the custody of the Fund's custodian or custodians, as
described in Section 22B-123.
(c) The pension fund assets of the Fund shall be maintained
in accounts held outside the State treasury. Moneys in those
accounts are not subject to administrative charges or
chargebacks, including, but not limited to, those authorized
under the State Finance Act.
(d) The board may not delegate its management functions,
but it may, but is not required to, arrange to compensate for
personalized investment advisory service for any or all
investments under its control with any national or state bank
or trust company authorized to do a trust business and
domiciled in Illinois, other financial institution organized
under the laws of Illinois, or an investment advisor who is
qualified under the federal Investment Advisers Act of 1940 and
is registered under the Illinois Securities Law of 1953.
Nothing contained in this Article prevents the board from
subscribing to general investment research services available
for purchase or use by others. The board shall also have the
authority to compensate for accounting services.
(e) This Section does not prohibit the board from directly

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investing pension fund assets in public market investments,
private investments, real estate investments, or other
investments authorized by this Code.
(40 ILCS 5/22B-122 new)
Sec. 22B-122. Investment authority. The Fund shall have the
authority to invest funds, subject to the requirements and
restrictions set forth in Sections 1-109, 1-109.1, 1-109.2,
1-110, 1-111, 1-114, and 1-115 of this Code.
The Fund shall not be subject to any of the limitations
applicable to investments of pension fund assets by the
transferor pension funds under Sections 1-113.1 through
1-113.12 or Article 3 of this Code. The Fund shall not, for
purposes of Article 1 of this Code, be deemed to be a
retirement system, pension fund, or investment board whose
investments are restricted by Section 1-113.2 of this Code,
and, as a result, the Fund shall be subject to the provisions
of Section 1-109.1, including, but not limited to: utilization
of emerging investment managers; increasing racial, ethnic,
and gender diversity of its fiduciaries; utilization of
businesses owned by minorities, women, and persons with
disabilities; utilization of minority broker-dealers;
utilization of minority investment managers; and applicable
reporting requirements.
No bank or savings and loan association shall receive
investment funds as permitted by this Section, unless it has

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complied with the requirements established pursuant to Section
6 of the Public Funds Investment Act. The limitations set forth
in Section 6 of the Public Funds Investment Act shall be
applicable only at the time of investment and shall not require
the liquidation of any investment at any time.
The Fund shall have the authority to enter into such
agreements and to execute such documents as it determines to be
necessary to complete any investment transaction.
All investments shall be clearly held and accounted for to
indicate ownership by the Fund. The Fund may direct the
registration of securities in its own name or in the name of a
nominee created for the express purpose of registration of
securities by a national or state bank or trust company
authorized to conduct a trust business in the State of
Illinois.
Investments shall be carried at cost or at a value
determined in accordance with generally accepted accounting
principles and accounting procedures approved by the Fund.
(40 ILCS 5/22B-123 new)
Sec. 22B-123. Custodian. The pension fund assets
transferred to or otherwise acquired by the Fund shall be
placed in the custody of a custodian who shall provide adequate
safe deposit facilities for those assets and hold all such
securities, funds, and other assets subject to the order of the
Fund.

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Each custodian shall furnish a corporate surety bond of
such amount as the board designates, which bond shall indemnify
the Fund, the board, and the officers and employees of the Fund
against any loss that may result from any action or failure to
act by the custodian or any of the custodian's agents. All
charges incidental to the procuring and giving of any bond
shall be paid by the board and each bond shall be in the
custody of the board.
(40 ILCS 5/22B-124 new)
Sec. 22B-124. Accounting for pension fund assets. In the
management of the pension fund assets of the transferor pension
funds, the Fund:
(1) shall carry all pension fund assets at fair market
value determined in accordance with generally accepted
accounting principles and accounting procedures approved
by the board. Each investment initially transferred to the
Fund by a transferor pension fund shall be similarly
valued, except that the board may elect to place such value
on any investment conditionally in which case, the amount
of any later realization of such asset in cash that is in
excess of or is less than the amount so credited shall be
credited or charged to the account maintained for the
transferor pension fund that made the transfer;
(2) shall keep proper books of account that shall
reflect at all times the value of all investments held by

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the Fund; and
(3) shall charge all distributions made by the Fund to
or for a transferor pension fund to the account maintained
for that fund.
(40 ILCS 5/22B-125 new)
Sec. 22B-125. Audits and reports.
(a) At least annually, the books, records, accounts, and
securities of the Fund shall be audited by a certified public
accountant selected by the board and conducted in accordance
with the rules and procedures promulgated by the Governmental
Accounting Standards Board. The audit opinion shall be
published as a part of the annual report of the Fund, which
shall be submitted to the transferor pension funds and to the
Department of Insurance.
(b) For the quarterly periods ending September 30, December
31, and March 31, the Fund shall submit to the participating
pension funds and to the Department of Insurance a report
providing, among other things, the following information:
(1) a full description of the investments acquired,
showing average costs;
(2) a full description of the securities sold or
exchanged, showing average proceeds or other conditions of
an exchange;
(3) gains or losses realized during the period;
(4) income from investments; and

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(5) administrative expenses.
(c) An annual report shall be prepared by the Fund for
submission to the participating pension funds and to the
Department of Insurance within 6 months after the close of each
fiscal year. A fiscal year shall date from July 1 of one year
to June 30 of the year next following. This report shall
contain full information concerning the results of investment
operations of the Fund. This report shall include the
information described in subsection (b) and, in addition
thereto, the following information:
(1) a listing of the investments held by the Fund at
the end of the year, showing their book values and market
values and their income yields on market values;
(2) comments on the pertinent factors affecting such
investments;
(3) a review of the policies maintained by the Fund and
any changes that occurred during the year;
(4) a copy of the audited financial statements for the
year;
(5) recommendations for possible changes in this
Article or otherwise governing the operations of the Fund;
and
(6) a listing of the names of securities brokers and
dealers dealt with during the year showing the total amount
of commissions received by each on transactions with the
Fund.

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(40 ILCS 5/Art. 22C heading new)
ARTICLE 22C. THE FIREFIGHTERS' PENSION INVESTMENT FUND
(40 ILCS 5/22C-101 new)
Sec. 22C-101. Establishment. The Firefighters' Pension
Investment Fund is created with authority to manage the
reserves, funds, assets, securities, properties, and moneys of
the firefighter pension funds created pursuant to Article 4 of
this Code, all as provided in this Article.
(40 ILCS 5/22C-102 new)
Sec. 22C-102. Definitions. For the purposes of this
Article, the following words and phrases shall have the meaning
ascribed to them unless the context requires otherwise.
(40 ILCS 5/22C-103 new)
Sec. 22C-103. Fund. "Fund" means the Firefighters' Pension
Investment Fund.
(40 ILCS 5/22C-104 new)
Sec. 22C-104. Transferor pension fund. "Transferor pension
fund" means any pension fund established pursuant to Article 4
of this Code.
(40 ILCS 5/22C-105 new)

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Sec. 22C-105. Participating pension fund. "Participating
pension fund" means any pension fund established pursuant to
Article 4 of this Code that has transferred securities, funds,
assets, and moneys, and responsibility for custody and control
of those securities, funds, assets, and moneys, to the Fund
pursuant to Section 4-123.2.
(40 ILCS 5/22C-106 new)
Sec. 22C-106. Pension fund assets. "Pension fund assets"
means the reserves, funds, assets, securities, and moneys of
any transferor pension fund.
(40 ILCS 5/22C-107 new)
Sec. 22C-107. Invest. "Invest" means to acquire, invest,
reinvest, exchange, or retain pension fund assets of the
transferor pension funds and to sell and manage the reserves,
funds, securities, moneys, or assets of the transferor pension
fund, all in accordance with this Article.
(40 ILCS 5/22C-108 new)
Sec. 22C-108. Investment advisor. "Investment advisor"
means any person or business entity that provides investment
advice to the board on a personalized basis and with an
understanding of the policies and goals of the board.
"Investment advisor" does not include any person or business
entity that provides statistical or general market research

10100SB1300ham005 - 186 - LRB101 07899 RPS 64619 a
data available for purchase or use by others.
(40 ILCS 5/22C-112 new)
Sec. 22C-112. Transition period. "Transition period" means
the period immediately following the effective date of this
amendatory Act of the 101st General Assembly during which
pension fund assets, and responsibility for custody and control
of those assets, will be transferred from the transferor
pension funds to the board, as described in Section 22C-120.
(40 ILCS 5/22C-113 new)
Sec. 22C-113. Illinois Municipal League. "Illinois
Municipal League" means the unincorporated, nonprofit,
nonpolitical association of Illinois cities, villages, and
incorporated towns described in Section 1-8-1 of the Illinois
Municipal Code.
(40 ILCS 5/22C-114 new)
Sec. 22C-114. Purpose, establishment, and governance. The
Fund is established to consolidate the transferor pension funds
to streamline investments and eliminate unnecessary and
redundant administrative costs, thereby ensuring more money is
available to fund pension benefits for the beneficiaries of the
transferor pension funds. The transition board trustees and
permanent board trustees of the Fund shall be fiduciaries for
the participants and beneficiaries of the participating

10100SB1300ham005 - 187 - LRB101 07899 RPS 64619 a
pension funds and shall discharge their duties with respect to
the retirement system or pension fund solely in the interest of
the participants and beneficiaries. Further, the transition
board trustees and permanent board trustees, acting prudently
and as fiduciaries, shall take all reasonable steps to ensure
that all of the transferor pension funds are treated equitably
and that the financial condition of one participating pension
fund, including, but not limited to, pension benefit funding
levels and ratios, will have no effect on the financial
condition of any other transferor pension fund.
(40 ILCS 5/22C-115 new)
Sec. 22C-115. Board of Trustees of the Fund.
(a) No later than one month after the effective date of
this amendatory Act of the 101st General Assembly or as soon
thereafter as may be practicable, the Governor shall appoint,
by and with the advice and consent of the Senate, a transition
board of trustees consisting of 9 members as follows:
(1) three members representing municipalities and fire
protection districts who are mayors, presidents, chief
executive officers, chief financial officers, or other
officers, executives, or department heads of
municipalities or fire protection districts and appointed
from among candidates recommended by the Illinois
Municipal League;
(2) three members representing participants who are

10100SB1300ham005 - 188 - LRB101 07899 RPS 64619 a
participants and appointed from among candidates
recommended by the statewide labor organization
representing firefighters employed by at least 85
municipalities that is affiliated with the Illinois State
Federation of Labor;
(3) one member representing beneficiaries who is a
beneficiary and appointed from among the candidate or
candidates recommended by the statewide labor organization
representing firefighters employed by at least 85
municipalities that is affiliated with the Illinois State
Federation of Labor; and
(4) one member recommended by the Illinois Municipal
League; and
(5) one member who is a participant recommended by the
statewide labor organization representing firefighters
employed by at least 85 municipalities and that is
affiliated with the Illinois State Federation of Labor.
The transition board members shall serve until the initial
permanent board members are elected and qualified.
The transition board of trustees shall select the
chairperson of the transition board of trustees from among the
trustees for the duration of the transition board's tenure.
(b) The permanent board of trustees shall consist of 9
members comprised as follows:
(1) Three members who are mayors, presidents, chief
executive officers, chief financial officers, or other

10100SB1300ham005 - 189 - LRB101 07899 RPS 64619 a
officers, executives, or department heads of
municipalities or fire protection districts that have
participating pension funds and are elected by the mayors
and presidents of municipalities or fire protection
districts that have participating pension funds.
(2) Three members who are participants of
participating pension funds and elected by the
participants of participating pension funds.
(3) One member who is a beneficiary of a participating
pension fund and is elected by the beneficiaries of
participating pension funds.
(4) One member recommended by the Illinois Municipal
League who shall be appointed by the Governor with the
advice and consent of the Senate.
(5) One member recommended by the statewide labor
organization representing firefighters employed by at
least 85 municipalities and that is affiliated with the
Illinois State Federation of Labor who shall be appointed
by the Governor with the advice and consent of the Senate.
The permanent board of trustees shall select the
chairperson of the permanent board of trustees from among the
trustees for a term of 2 years. The holder of the office of
chairperson shall alternate between a person elected or
appointed under item (1) or (4) of this subsection (b) and a
person elected or appointed under item (2), (3), or (5) of this
subsection (b).

10100SB1300ham005 - 190 - LRB101 07899 RPS 64619 a
(c) Each trustee shall qualify by taking an oath of office
before the Secretary of State stating that he or she will
diligently and honestly administer the affairs of the board and
will not violate or knowingly permit the violation of any
provision of this Article.
(d) Trustees shall receive no salary for service on the
board but shall be reimbursed for travel expenses incurred
while on business for the board according to the standards in
effect for members of the Commission on Government Forecasting
and Accountability.
A municipality or fire protection district employing a
firefighter who is an elected or appointed trustee of the board
must allow reasonable time off with compensation for the
firefighter to conduct official business related to his or her
position on the board, including time for travel. The board
shall notify the municipality or fire protection district in
advance of the dates, times, and locations of this official
business. The Fund shall timely reimburse the municipality or
fire protection district for the reasonable costs incurred that
are due to the firefighter's absence.
(e) No trustee shall have any interest in any brokerage
fee, commission, or other profit or gain arising out of any
investment directed by the board. This subsection does not
preclude ownership by any member of any minority interest in
any common stock or any corporate obligation in which an
investment is directed by the board.

10100SB1300ham005 - 191 - LRB101 07899 RPS 64619 a
(f) Notwithstanding any provision or interpretation of law
to the contrary, any member of the transition board may also be
elected or appointed as a member of the permanent board.
Notwithstanding any provision or interpretation of law to
the contrary, any trustee of a fund established under Article 4
of this Code may also be appointed as a member of the
transition board or elected or appointed as a member of the
permanent board.
The restriction in Section 3.1 of the Lobbyist Registration
Act shall not apply to a member of the transition board
appointed pursuant to items (4) or (5) of subsection (a) or to
a member of the permanent board appointed pursuant to items (4)
or (5) of subsection (b).
(40 ILCS 5/22C-116 new)
Sec. 22C-116. Conduct and administration of elections;
terms of office.
(a) For the election of the permanent trustees, the
transition board shall administer the initial elections and the
permanent board shall administer all subsequent elections.
Each board shall develop and implement such procedures as it
determines to be appropriate for the conduct of such elections.
For the purposes of obtaining information necessary to conduct
elections under this Section, participating pension funds
shall cooperate with the Fund.
(b) All nominations for election shall be by petition. Each

10100SB1300ham005 - 192 - LRB101 07899 RPS 64619 a
petition for a trustee shall be executed as follows:
(1) for trustees to be elected by the mayors and
presidents of municipalities or fire protection districts
that have participating pension funds, by at least 20 such
mayors and presidents; except that this item (1) shall
apply only with respect to participating pension funds;
(2) for trustees to be elected by participants, by at
least 400 participants; and
(3) for trustees to be elected by beneficiaries, by at
least 100 beneficiaries.
(c) A separate ballot shall be used for each class of
trustee. The board shall prepare and send ballots and ballot
envelopes to the participants and beneficiaries eligible to
vote in accordance with rules adopted by the board. The ballots
shall contain the names of all candidates in alphabetical
order. The ballot envelope shall have on the outside a form of
certificate stating that the person voting the ballot is a
participant or beneficiary entitled to vote.
Participants and beneficiaries, upon receipt of the
ballot, shall vote the ballot and place it in the ballot
envelope, seal the envelope, execute the certificate thereon,
and return the ballot to the Fund.
The board shall set a final date for ballot return, and
ballots received prior to that date in a ballot envelope with a
properly executed certificate and properly voted shall be valid
ballots.

10100SB1300ham005 - 193 - LRB101 07899 RPS 64619 a
The board shall set a day for counting the ballots and name
judges and clerks of election to conduct the count of ballots
and shall make any rules necessary for the conduct of the
count.
The candidate or candidates receiving the highest number of
votes for each class of trustee shall be elected. In the case
of a tie vote, the winner shall be determined in accordance
with procedures developed by the Department of Insurance.
In lieu of conducting elections via mail balloting as
described in this Section, the board may instead adopt rules to
provide for elections to be carried out solely via Internet
balloting or phone balloting. Nothing in this Section prohibits
the Fund from contracting with a third party to administer the
election in accordance with this Section.
(d) At any election, voting shall be as follows:
(1) Each person authorized to vote for an elected
trustee may cast one vote for each related position for
which such person is entitled to vote and may cast such
vote for any candidate or candidates on the ballot for such
trustee position.
(2) If only one candidate for each position is properly
nominated in petitions received, that candidate shall be
deemed the winner and no election under this Section shall
be required.
(3) The results shall be entered in the minutes of the
first meeting of the board following the tally of votes.

10100SB1300ham005 - 194 - LRB101 07899 RPS 64619 a
(e) The initial election for permanent trustees shall be
held and the permanent board shall be seated no later than 12
months after the effective date of this amendatory Act of the
101st General Assembly. Each subsequent election shall be held
no later than 30 days prior to the end of the term of the
incumbent trustees.
(f) The elected trustees shall each serve for terms of 4
years commencing on the first business day of the first month
after election; except that the terms of office of the
initially elected trustees shall be as follows:
(1) One trustee elected pursuant to item (1) of
subsection (b) of Section 22C-115 shall serve for a term of
2 years and 2 trustees elected pursuant to item (1) of
subsection (b) of Section 22C-115 shall serve for a term of
4 years;
(2) One trustee elected pursuant to item (2) of
subsection (b) of Section 22C-115 shall serve for a term of
2 years and 2 trustees elected pursuant to item (2) of
subsection (b) of Section 22C-115 shall serve for a term of
4 years; and
(3) The trustee elected pursuant to item (3) of
subsection (b) of Section 22C-115 shall serve for a term of
2 years.
(g) The trustees appointed pursuant to items (4) and (5) of
subsection (b) of Section 22C-115 shall each serve for a term
of 4 years commencing on the first business day of the first

10100SB1300ham005 - 195 - LRB101 07899 RPS 64619 a
month after the election of the elected trustees.
(h) A member of the board who was elected pursuant to item
(1) of subsection (b) of Section 22C-115 who ceases to serve as
a mayor, president, chief executive officer, chief financial
officer, or other officer, executive, or department head of a
municipality or fire protection district that has a
participating pension fund shall not be eligible to serve as a
member of the board and his or her position shall be deemed
vacant. A member of the board who was elected by the
participants of participating pension funds who ceases to be a
participant may serve the remainder of his or her elected term.
For a vacancy of an elected trustee occurring with an
unexpired term of 6 months or more, an election shall be
conducted for the vacancy in accordance with Section 22C-115
and this Section.
For a vacancy of an elected trustee occurring with an
unexpired term of less than 6 months, the vacancy shall be
filled by appointment by the board for the unexpired term as
follows: a vacancy of a member elected pursuant to item (1) of
subsection (b) of Section 22C-115 shall be filled by a mayor,
president, chief executive officer, chief financial officer,
or other officer, executive, or department head of a
municipality or fire protection district that has a
participating pension fund; a vacancy of a member elected
pursuant to item (2) of subsection (b) of Section 22C-115 shall
be filled by a participant of a participating pension fund; and

10100SB1300ham005 - 196 - LRB101 07899 RPS 64619 a
a vacancy of a member elected under item (3) of subsection (b)
of Section 22C-115 shall be filled by a beneficiary of a
participating pension fund.
Vacancies among the appointed trustees shall be filled for
unexpired terms by appointment in like manner as for the
original appointments.
(40 ILCS 5/22C-117 new)
Sec. 22C-117. Meetings of the board.
(a) The transition board and the permanent board shall each
meet at least quarterly and otherwise upon written request of
either the Chairperson or 3 other members. The Chairperson
shall preside over meetings of the board. The executive
director and personnel of the board shall prepare agendas and
materials and required postings for meetings of the board.
(b) Six members of the board shall constitute a quorum.
(c) All actions taken by the transition board and the
permanent board shall require a vote of least 5 trustees,
except that the following shall require a vote of at least 6
trustees: the adoption of actuarial assumptions; the selection
of the chief investment officer, fiduciary counsel, or a
consultant as defined under Section 1-101.5 of this Code; the
adoption of rules for the conduct of election of trustees; and
the adoption of asset allocation policies and investment
policies.

10100SB1300ham005 - 197 - LRB101 07899 RPS 64619 a
(40 ILCS 5/22C-118 new)
Sec. 22C-118. Operation and administration of the Fund.
(a) The operation and administration of the Fund shall be
managed by an executive director. No later than 2 months after
the transition board is appointed or as soon thereafter as may
be practicable, the transition board shall appoint an interim
executive director who shall serve until a permanent executive
director is appointed by the board, with such appointment to be
made no later than 6 months after the end of the transition
period. The executive director shall act subject to and under
the supervision of the board and the board shall fix the
compensation of the executive director.
(b) The board may appoint one or more custodians to
facilitate the transfer of pension fund assets during the
transition period, and subsequently to provide custodial and
related fiduciary services on behalf of the board, and enter
into contracts for such services. The board may also appoint
external legal counsel and an independent auditing firm and may
appoint investment advisors and other consultants as it
determines to be appropriate and enter into contracts for such
services. With approval of the board, the executive director
may retain such other consultants, advisors, fiduciaries, and
service providers as may be desirable and enter into contracts
for such services.
(c) The board shall separately calculate account balances
for each participating pension fund. The operations and

10100SB1300ham005 - 198 - LRB101 07899 RPS 64619 a
financial condition of each participating pension fund account
shall not affect the account balance of any other participating
pension fund. Further, investment returns earned by the Fund
shall be allocated and distributed pro rata among each
participating pension fund account in accordance with the value
of the pension fund assets attributable to each fund.
(d) With approval of the board, the executive director may
employ such personnel, professional or clerical, as may be
desirable and fix their compensation. The appointment and
compensation of the personnel, including the executive
director, shall not be subject to the Personnel Code.
(e) The board shall annually adopt a budget to support its
operations and administration. The board shall apply moneys
derived from the pension fund assets transferred and under its
control to pay the costs and expenses incurred in the operation
and administration of the Fund. The board shall from time to
time transfer moneys and other assets to the participating
pension funds as required for the participating pension funds
to pay expenses, benefits, and other required payments to
beneficiaries in the amounts and at the times prescribed in
this Code.
(f) The board may exercise any of the powers granted to
boards of trustees of pension funds under Sections 1-107 and
1-108 of this Code and may by resolution provide for the
indemnification of its members and any of its officers,
advisors, or employees in a manner consistent with those

10100SB1300ham005 - 199 - LRB101 07899 RPS 64619 a
Sections.
(g) An office for meetings of the board and for its
administrative personnel shall be established at any suitable
place within the State as may be selected by the board. All
books and records of the board shall be kept in such office.
(h) The board shall contract for a blanket fidelity bond in
the penal sum of not less than $1,000,000 to cover members of
the board of trustees, the executive director, and all other
employees of the board, conditioned for the faithful
performance of the duties of their respective offices, the
premium on which shall be paid by the board.
(40 ILCS 5/22C-119 new)
Sec. 22C-119. Adoption of rules. The board shall adopt such
rules (not inconsistent with this Code) as in its judgment are
desirable to implement and properly administer this Article.
Such rules shall specifically provide for the following: (1)
the implementation of the transition process described in
Section 22C-120; (2) the process by which the participating
pension funds may request transfer of funds; (3) the process
for the transfer in, receipt for, and investment of pension
assets received by the Fund after the transition period from
the participating pension funds; (4) the process by which
contributions from municipalities and fire protection
districts for the benefit of the participating pension funds
may, but are not required to, be directly transferred to the

10100SB1300ham005 - 200 - LRB101 07899 RPS 64619 a
Fund; and (5) compensation and benefits for its employees. A
copy of the rules adopted by the Fund shall be filed with the
Secretary of State and the Department of Insurance. The
adoption and effectiveness of such rules shall not be subject
to Article 5 of the Illinois Administrative Procedure Act.
(40 ILCS 5/22C-120 new)
Sec. 22C-120. Transition period; transfer of securities,
assets, and investment functions.
(a) The transition period shall commence on the effective
date of this amendatory Act of the 101st General Assembly and
shall end as determined by the board, consistent with and in
the application of its fiduciary responsibilities, but in no
event later than 30 months thereafter.
(b) The board may retain the services of custodians,
investment consultants, and other professional services it
deems prudent to implement the transition of assets described
in this Section. The permanent board of trustees shall not be
bound by any contract or agreement regarding such custodians,
investment consultants, or other professional services entered
into by the transition board of trustees.
(c) As soon as practicable after the effective date of this
amendatory Act of the 101st General Assembly, the board, in
cooperation with the Department of Insurance, shall audit the
investment assets of each transferor pension fund to determine
a certified investment asset list for each transferor pension

10100SB1300ham005 - 201 - LRB101 07899 RPS 64619 a
fund. The audit shall be performed by a certified public
accountant engaged by the board, and the board shall be
responsible for payment of the costs and expenses associated
with the audit. Upon completion of the audit for any transferor
pension fund, the board and the Department of Insurance shall
provide the certified investment asset list to that transferor
pension fund. Upon determination of the certified investment
asset list for any transferor pension fund, the board shall,
within 10 business days or as soon thereafter as may be
practicable, as determined by the board, initiate the transfer
of assets from that transferor pension fund. Further and to
maintain accuracy of the certified investment asset list, upon
determination of the certified investment asset list for a
transferor pension fund, that fund shall not purchase or sell
any of its pension fund assets.
(d) When the Fund is prepared to receive pension fund
assets from any transferor pension fund, the executive director
shall notify in writing the board of trustees of that
transferor pension fund of the Fund's intent to assume
fiduciary control of those pension fund assets, and the date at
which it will assume such control and that the transferor
pension fund will cease to exercise fiduciary responsibility.
This letter shall be transmitted no less than 30 days prior to
the transfer date. A copy of the letter shall be transmitted to
the Department of Insurance. Upon receipt of the letter, the
transferor pension fund shall promptly notify its custodian, as

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well as any and all entities with fiduciary control of any
portion of the pension assets. Each transferor pension fund
shall have sole fiduciary and statutory responsibility for the
management of its pension assets until the start of business on
the transfer date. At the start of business on the transfer
date, statutory and fiduciary responsibility for the
investment of pension fund assets shall shift exclusively to
the Fund and the Fund shall promptly and prudently transfer all
such pension fund assets to the board and terminate the
relationship with the local custodian of that transferor
pension fund. The Fund shall provide a receipt for the transfer
to the transferor pension fund within 30 days of the transfer
date.
As used in this subsection, "transfer date" means the date
at which the Fund will assume fiduciary control of the
transferor pension fund's assets and the transferor pension
fund will cease to exercise fiduciary responsibility.
(e) Within 90 days after the end of the transition period
or as soon thereafter as may be practicable as determined by
the board, the Fund and the Department of Insurance shall
cooperate in transferring to the Fund all pension fund assets
remaining in the custody of the transferor pension funds.
(f) The board shall adopt such rules as in its judgment are
desirable to implement the transition process, including,
without limitation, the transfer of the pension fund assets of
the transferor pension funds, the assumption of fiduciary

10100SB1300ham005 - 203 - LRB101 07899 RPS 64619 a
control of such assets by the Fund, and the termination of
relationships with local custodians. The adoption and
effectiveness of such rules and regulations shall not be
subject to Article 5 of the Illinois Administrative Procedure
Act.
(g) Within 6 months after the end of the transition period
or as soon thereafter as may be practicable as determined by
the board, the books, records, accounts, and securities of the
Fund shall be audited by a certified public accountant selected
by the board. This audit shall include, but not be limited to,
the following: (1) a full description of the investments
acquired, showing average costs; (2) a full description of the
securities sold or exchanged, showing average proceeds or other
conditions of an exchange; (3) gains or losses realized during
the period; (4) income from investments; and (5) administrative
expenses incurred by the board. This audit report shall be
published on the Fund's official website and filed with the
Department of Insurance.
(h) To provide funds for payment of the ordinary and
regular costs associated with the implementation of this
transition process, the Illinois Finance Authority is
authorized to loan to the Fund up to $7,500,000 of any of the
Authority's funds, including, but not limited to, funds in its
Illinois Housing Partnership Program Fund, its Industrial
Project Insurance Fund, or its Illinois Venture Investment
Fund, for such purpose. Such loan shall be repaid by the Fund

10100SB1300ham005 - 204 - LRB101 07899 RPS 64619 a
with an interest rate tied to the Federal Funds Rate or an
equivalent market established variable rate. The Fund and the
Illinois Finance Authority shall enter into a loan or similar
agreement that specifies the period of the loan, the payment
interval, procedures for making periodic loans, the variable
rate methodology to which the interest rate for loans should be
tied, the funds of the Illinois Finance Authority that will be
used to provide the loan, and such other terms that the Fund
and the Illinois Finance Authority reasonably believe to be
mutually beneficial. Such agreement shall be a public record
and the Fund shall post the terms of the agreement on its
official website.
(40 ILCS 5/22C-121 new)
Sec. 22C-121. Management and direction of investments.
(a) The board shall have the authority to manage the
pension fund assets of the transferor pension funds for the
purpose of obtaining a total return on investments for the long
term.
(b) The authority of the board to manage pension fund
assets and the liability shall begin when there has been a
physical transfer of the pension fund assets to the Fund and
placed in the custody of the Fund's custodian or custodians, as
described in Section 22C-123.
(c) The pension fund assets of the Fund shall be maintained
in accounts held outside the State treasury. Moneys in those

10100SB1300ham005 - 205 - LRB101 07899 RPS 64619 a
accounts are not subject to administrative charges or
chargebacks, including, but not limited to, those authorized
under the State Finance Act.
(d) The board may not delegate its management functions,
but it may, but is not required to, arrange to compensate for
personalized investment advisory service for any or all
investments under its control with any national or state bank
or trust company authorized to do a trust business and
domiciled in Illinois, other financial institution organized
under the laws of Illinois, or an investment advisor who is
qualified under the federal Investment Advisers Act of 1940 and
is registered under the Illinois Securities Law of 1953.
Nothing contained in this Article prevents the board from
subscribing to general investment research services available
for purchase or use by others. The board shall also have the
authority to compensate for accounting services.
(e) This Section does not prohibit the board from directly
investing pension fund assets in public market investments,
private investments, real estate investments, or other
investments authorized by this Code.
(40 ILCS 5/22C-122 new)
Sec. 22C-122. Investment authority. The Fund shall have the
authority to invest funds, subject to the requirements and
restrictions set forth in Sections 1-109, 1-109.1, 1-109.2,
1-110, 1-111, 1-114, and 1-115 of this Code.

10100SB1300ham005 - 206 - LRB101 07899 RPS 64619 a
The Fund shall not be subject to any of the limitations
applicable to investments of pension fund assets by the
transferor pension funds under Sections 1-113.1 through
1-113.12 or Article 4 of this Code. The Fund shall not, for
purposes of Article 1 of this Code, be deemed to be a
retirement system, pension fund, or investment board whose
investments are restricted by Section 1-113.2 of this Code,
and, as a result, the Fund shall be subject to the provisions
of Section 1-109.1, including, but not limited to: utilization
of emerging investment managers; increasing racial, ethnic,
and gender diversity of its fiduciaries; utilization of
businesses owned by minorities, women, and persons with
disabilities; utilization of minority broker-dealers;
utilization of minority investment managers; and applicable
reporting requirements.
No bank or savings and loan association shall receive
investment funds as permitted by this Section, unless it has
complied with the requirements established pursuant to Section
6 of the Public Funds Investment Act. The limitations set forth
in Section 6 of the Public Funds Investment Act shall be
applicable only at the time of investment and shall not require
the liquidation of any investment at any time.
The Fund shall have the authority to enter into such
agreements and to execute such documents as it determines to be
necessary to complete any investment transaction.
All investments shall be clearly held and accounted for to

10100SB1300ham005 - 207 - LRB101 07899 RPS 64619 a
indicate ownership by the Fund. The Fund may direct the
registration of securities in its own name or in the name of a
nominee created for the express purpose of registration of
securities by a national or state bank or trust company
authorized to conduct a trust business in the State of
Illinois.
Investments shall be carried at cost or at a value
determined in accordance with generally accepted accounting
principles and accounting procedures approved by the Fund.
(40 ILCS 5/22C-123 new)
Sec. 22C-123. Custodian. The pension fund assets
transferred to or otherwise acquired by the Fund shall be
placed in the custody of a custodian who shall provide adequate
safe deposit facilities for those assets and hold all such
securities, funds, and other assets subject to the order of the
Fund.
Each custodian shall furnish a corporate surety bond of
such amount as the board designates, which bond shall indemnify
the Fund, the board, and the officers and employees of the Fund
against any loss that may result from any action or failure to
act by the custodian or any of the custodian's agents. All
charges incidental to the procuring and giving of any bond
shall be paid by the board and each bond shall be in the
custody of the board.

10100SB1300ham005 - 208 - LRB101 07899 RPS 64619 a
(40 ILCS 5/22C-124 new)
Sec. 22C-124. Accounting for pension fund assets. In the
management of the pension fund assets of the transferor pension
funds, the Fund:
(1) shall carry all pension fund assets at fair market
value determined in accordance with generally accepted
accounting principles and accounting procedures approved
by the board. Each investment initially transferred to the
Fund by a transferor pension fund shall be similarly
valued, except that the board may elect to place such value
on any investment conditionally in which case, the amount
of any later realization of such asset in cash that is in
excess of or is less than the amount so credited shall be
credited or charged to the account maintained for the
transferor pension fund that made the transfer;
(2) shall keep proper books of account that shall
reflect at all times the value of all investments held by
the Fund; and
(3) shall charge all distributions made by the Fund to
or for a transferor pension fund to the account maintained
for that fund.
(40 ILCS 5/22C-125 new)
Sec. 22C-125. Audits and reports.
(a) At least annually, the books, records, accounts, and
securities of the Fund shall be audited by a certified public

10100SB1300ham005 - 209 - LRB101 07899 RPS 64619 a
accountant selected by the board and conducted in accordance
with the rules and procedures promulgated by the Governmental
Accounting Standards Board. The audit opinion shall be
published as a part of the annual report of the Fund, which
shall be submitted to the transferor pension funds and to the
Department of Insurance.
(b) For the quarterly periods ending September 30, December
31, and March 31, the Fund shall submit to the participating
pension funds and to the Department of Insurance a report
providing, among other things, the following information:
(1) a full description of the investments acquired,
showing average costs;
(2) a full description of the securities sold or
exchanged, showing average proceeds or other conditions of
an exchange;
(3) gains or losses realized during the period;
(4) income from investments; and
(5) administrative expenses.
(c) An annual report shall be prepared by the Fund for
submission to the participating pension funds and to the
Department of Insurance within 6 months after the close of each
fiscal year. A fiscal year shall date from July 1 of one year
to June 30 of the year next following. This report shall
contain full information concerning the results of investment
operations of the Fund. This report shall include the
information described in subsection (b) and, in addition

10100SB1300ham005 - 210 - LRB101 07899 RPS 64619 a
thereto, the following information:
(1) a listing of the investments held by the Fund at
the end of the year, showing their book values and market
values and their income yields on market values;
(2) comments on the pertinent factors affecting such
investments;
(3) a review of the policies maintained by the Fund and
any changes that occurred during the year;
(4) a copy of the audited financial statements for the
year;
(5) recommendations for possible changes in this
Article or otherwise governing the operations of the Fund;
and
(6) a listing of the names of securities brokers and
dealers dealt with during the year showing the total amount
of commissions received by each on transactions with the
Fund.
Section 15. The Local Government Officer Compensation Act
is amended by changing Section 25 as follows:
(50 ILCS 145/25)
Sec. 25. Elected official salary.
(a) Notwithstanding the provision of any other law to the
contrary, an elected officer of a unit of local government that
is a participating employer under the Illinois Municipal

10100SB1300ham005 - 211 - LRB101 07899 RPS 64619 a
Retirement Fund shall not receive any salary or other
compensation from the unit of local government if the member is
receiving pension benefits from the Illinois Municipal
Retirement Fund under Article 7 of the Illinois Pension Code
for the elected official's service in that same elected
position. If an elected officer is receiving benefits from the
Illinois Municipal Retirement Fund on August 23, 2019 (the
effective date of Public Act 101-544) this amendatory Act of
the 101st General Assembly, the elected official's salary and
compensation shall be reduced to zero at the beginning of the
member's next term if the member is still receiving such
pension benefits.
(b) This Section does not apply to a unit of local
government that has adopted an ordinance or resolution
effective prior to January 1, 2019 that: (i) reduces the
compensation of an elected official of the unit of local
government who is receiving pension benefits from the Illinois
Municipal Retirement Fund under Article 7 of the Illinois
Pension Code for his or her service as an elected official in
the same elected position of that unit of local government; and
(ii) changes the official's position to part-time.
(Source: P.A. 101-544, eff. 8-23-19.)
Section 20. The Illinois Vehicle Code is amended by
changing Section 2-115 as follows:

10100SB1300ham005 - 212 - LRB101 07899 RPS 64619 a
(625 ILCS 5/2-115) (from Ch. 95 1/2, par. 2-115)
Sec. 2-115. Investigators.
(a) The Secretary of State, for the purpose of more
effectively carrying out the provisions of the laws in relation
to motor vehicles, shall have power to appoint such number of
investigators as he may deem necessary. It shall be the duty of
such investigators to investigate and enforce violations of the
provisions of this Act administered by the Secretary of State
and provisions of Chapters 11, 12, 13, 14, and 15 and to
investigate and report any violation by any person who operates
as a motor carrier of property as defined in Section 18-100 of
this Act and does not hold a valid certificate or permit. Such
investigators shall have and may exercise throughout the State
all of the powers of peace officers.
No person may be retained in service as an investigator
under this Section after he or she has reached 60 years of age,
except for a person employed in the title of Capitol Police
Investigator and who began employment on or after January 1,
2011, in which case, that person may not be retained in service
after that person has reached 65 years of age.
The Secretary of State must authorize to each investigator
employed under this Section and to any other employee of the
Office of the Secretary of State exercising the powers of a
peace officer a distinct badge that, on its face, (i) clearly
states that the badge is authorized by the Office of the
Secretary of State and (ii) contains a unique identifying

10100SB1300ham005 - 213 - LRB101 07899 RPS 64619 a
number. No other badge shall be authorized by the Office of the
Secretary of State.
(b) The Secretary may expend such sums as he deems
necessary from Contractual Services appropriations for the
Department of Police for the purchase of evidence, for the
employment of persons to obtain evidence, and for the payment
for any goods or services related to obtaining evidence. Such
sums shall be advanced to investigators authorized by the
Secretary to expend funds, on vouchers signed by the Secretary.
In addition, the Secretary of State is authorized to maintain
one or more commercial checking accounts with any State banking
corporation or corporations organized under or subject to the
Illinois Banking Act for the deposit and withdrawal of moneys
to be used solely for the purchase of evidence and for the
employment of persons to obtain evidence, or for the payment
for any goods or services related to obtaining evidence;
provided that no check may be written on nor any withdrawal
made from any such account except on the written signatures of
2 persons designated by the Secretary to write such checks and
make such withdrawals, and provided further that the balance of
moneys on deposit in any such account shall not exceed $5,000
at any time, nor shall any one check written on or single
withdrawal made from any such account exceed $5,000.
All fines or moneys collected or received by the Department
of Police under any State or federal forfeiture statute;
including, but not limited to moneys forfeited under Section 12

10100SB1300ham005 - 214 - LRB101 07899 RPS 64619 a
of the Cannabis Control Act, moneys forfeited under Section 85
of the Methamphetamine Control and Community Protection Act,
and moneys distributed under Section 413 of the Illinois
Controlled Substances Act, shall be deposited into the
Secretary of State Evidence Fund.
In all convictions for offenses in violation of this Act,
the Court may order restitution to the Secretary of any or all
sums expended for the purchase of evidence, for the employment
of persons to obtain evidence, and for the payment for any
goods or services related to obtaining evidence. All such
restitution received by the Secretary shall be deposited into
the Secretary of State Evidence Fund. Moneys deposited into the
fund shall, subject to appropriation, be used by the Secretary
of State for the purposes provided for under the provisions of
this Section.
(Source: P.A. 99-896, eff. 1-1-17; 100-201, eff. 8-18-17.)
Section 90. The State Mandates Act is amended by adding
Section 8.43 as follows:
(30 ILCS 805/8.43)
(Text of Section before amendment by P.A. 101-50 and
101-504)
Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by Public Act 101-11,

10100SB1300ham005 - 215 - LRB101 07899 RPS 64619 a
101-49, 101-275, 101-320, 101-377, 101-387, 101-474, 101-492,
101-502, 101-522, or this amendatory Act of the 101st General
Assembly this amendatory Act of the 101st General Assembly.
(Source: P.A. 101-11, eff. 6-7-19; 101-49, eff. 7-12-19;
101-275, eff. 8-9-19; 101-320, eff. 8-9-19; 101-377, eff.
8-16-19; 101-387, eff. 8-16-19; 101-474, eff. 8-23-19;
101-492, eff. 8-23-19; 101-502, eff. 8-23-19; 101-522, eff.
8-23-19; revised 10-21-19.)
(Text of Section after amendment by P.A. 101-50 and
101-504)
Sec. 8.43. Exempt mandate.
(a) Notwithstanding Sections 6 and 8 of this Act, no
reimbursement by the State is required for the implementation
of any mandate created by Public Act 101-11, 101-49, 101-275,
101-320, 101-377, 101-387, 101-474, 101-492, 101-502, 101-504,
101-522, or this amendatory Act of the 101st General Assembly
this amendatory Act of the 101st General Assembly.
(b) Notwithstanding Sections 6 and 8 of this Act, no
reimbursement by the State is required for the implementation
of any mandate created by the Seizure Smart School Act.
(Source: P.A. 101-11, eff. 6-7-19; 101-49, eff. 7-12-19;
101-50, eff. 7-1-20; 101-275, eff. 8-9-19; 101-320, eff.
8-9-19; 101-377, eff. 8-16-19; 101-387, eff. 8-16-19; 101-474,
eff. 8-23-19; 101-492, eff. 8-23-19; 101-502, eff. 8-23-19;
101-504, eff. 7-1-20; 101-522, eff. 8-23-19; revised

10100SB1300ham005 - 216 - LRB101 07899 RPS 64619 a
10-21-19.)
Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text
that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.
Section 99. Effective date. This Act takes effect January
1, 2020.".