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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by changing | ||||||||||||||||||||||||
5 | Sections 1-113.1, 1-113.2, 1-113.3, 1-113.4, 1-113.4a, | ||||||||||||||||||||||||
6 | 1-113.5, 1-113.6, 1-113.7, 3-127, 3-132, 3-135, 4-120, 4-123, | ||||||||||||||||||||||||
7 | and 4-128 and by adding Sections 1-101.6, 1-101.7, 1-113.05, | ||||||||||||||||||||||||
8 | 3-135.1, 3-135.2, 4-128.1, 4-128.2, 7-226, and 7-227 as | ||||||||||||||||||||||||
9 | follows:
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10 | (40 ILCS 5/1-101.6 new) | ||||||||||||||||||||||||
11 | Sec. 1-101.6. Eligible pension fund. "Eligible pension | ||||||||||||||||||||||||
12 | fund" means a pension fund established pursuant to Article 3 or | ||||||||||||||||||||||||
13 | Article 4 of this Code that has net assets in trust that exceed | ||||||||||||||||||||||||
14 | the threshold amount defined in Section 1-101.7 of this Code. | ||||||||||||||||||||||||
15 | The status of "eligible pension fund", once established, | ||||||||||||||||||||||||
16 | continues in effect without regard to subsequent variations in | ||||||||||||||||||||||||
17 | the net assets of the pension fund. "Eligible pension fund" | ||||||||||||||||||||||||
18 | does not include a pension fund established pursuant to Article | ||||||||||||||||||||||||
19 | 3 or Article 4 of this Code that has elected before the | ||||||||||||||||||||||||
20 | effective date of this amendatory Act of the 100th General | ||||||||||||||||||||||||
21 | Assembly to come under the authority of the Illinois State | ||||||||||||||||||||||||
22 | Board of Investment for the management of its investments and | ||||||||||||||||||||||||
23 | that continues to be under the authority of the Illinois State |
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1 | Board of Investment for the management of its investments.
| ||||||
2 | (40 ILCS 5/1-101.7 new) | ||||||
3 | Sec. 1-101.7. Threshold amount. "Threshold amount", when | ||||||
4 | used in relation to the financial assets of a pension fund | ||||||
5 | established under Article 3 or Article 4 of this Code, means an | ||||||
6 | amount equal to 3 months of current liabilities of the pension | ||||||
7 | fund, including benefit payments owed to annuitants and | ||||||
8 | beneficiaries of the pension fund and reasonable operational | ||||||
9 | expenses.
| ||||||
10 | (40 ILCS 5/1-113.05 new) | ||||||
11 | Sec. 1-113.05. Transfer of investment authority of certain | ||||||
12 | pension funds established under Article 3 or 4. Upon receiving | ||||||
13 | a certified investment asset list from the Department of | ||||||
14 | Insurance pursuant to Section 3-135.1 or Section 4-128.1 of | ||||||
15 | this Code, the board of trustees of an eligible pension fund | ||||||
16 | established under Article 3 or 4 of this Code shall cease | ||||||
17 | investment activities and shall transfer all investment assets | ||||||
18 | of the pension fund to the Board of Trustees of the Illinois | ||||||
19 | Municipal Retirement Fund in the manner prescribed by rules | ||||||
20 | adopted by the Board of Trustees of the Illinois Municipal | ||||||
21 | Retirement Fund. Upon completion of that transfer, the | ||||||
22 | investment authority of the board of trustees shall terminate.
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23 | (40 ILCS 5/1-113.1)
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1 | Sec. 1-113.1.
Investment authority of certain pension | ||||||
2 | funds established under
Article 3 or 4. | ||||||
3 | (a) Beginning 24 months after the effective date of this | ||||||
4 | amendatory Act of the 100th General Assembly, or when the | ||||||
5 | transfer of investment authority is made pursuant to Section | ||||||
6 | 1-113.05, whichever occurs first, subsection (b) of this | ||||||
7 | Section does not apply to any pension fund that is an eligible | ||||||
8 | pension fund as defined in Section 1-101.6. | ||||||
9 | This Section continues to apply to any pension fund | ||||||
10 | established under Article 3 or 4 that is not an eligible | ||||||
11 | pension fund as defined in Section 1-101.6. | ||||||
12 | (b) The board of trustees of a police pension fund | ||||||
13 | established
under Article 3 of this Code or firefighter pension | ||||||
14 | fund established under
Article 4 of this Code shall draw | ||||||
15 | pension funds from the treasurer of the
municipality and, | ||||||
16 | beginning January 1, 1998, invest any part thereof in the
name | ||||||
17 | of the board in the items listed in Sections 1-113.2 through | ||||||
18 | 1-113.4
according to the limitations and requirements of this | ||||||
19 | Article. These
investments shall be made with the care, skill, | ||||||
20 | prudence, and diligence that a
prudent person acting in like | ||||||
21 | capacity and familiar with such matters would use
in the | ||||||
22 | conduct of an enterprise of like character with like aims.
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23 | Interest and any other income from the investments shall be | ||||||
24 | credited to the
pension fund.
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25 | For the purposes of Sections 1-113.2 through 1-113.11, the | ||||||
26 | "net assets" of a
pension fund include both the cash and |
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1 | invested assets of the pension fund.
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2 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
3 | (40 ILCS 5/1-113.2)
| ||||||
4 | Sec. 1-113.2.
List of permitted investments for certain all | ||||||
5 | Article 3 or 4 pension
funds. | ||||||
6 | (a) Beginning 24 months after the effective date of this | ||||||
7 | amendatory Act of the 100th General Assembly, or when the | ||||||
8 | transfer of investment authority is made pursuant to Section | ||||||
9 | 1-113.05, whichever occurs first, subsection (b) of this | ||||||
10 | Section does not apply to any pension fund that is an eligible | ||||||
11 | pension fund as defined in Section 1-101.6. | ||||||
12 | (b) Except as provided in subsection (a), any Any pension | ||||||
13 | fund established under Article 3 or 4 may invest in the
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14 | following items:
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15 | (1) Interest bearing direct obligations of the United | ||||||
16 | States of America.
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17 | (2) Interest bearing obligations to the extent that they | ||||||
18 | are fully
guaranteed or insured as to payment of principal and | ||||||
19 | interest by the United
States of America.
| ||||||
20 | (3) Interest bearing bonds, notes, debentures, or other | ||||||
21 | similar obligations
of agencies of the United States of | ||||||
22 | America. For the purposes of this Section,
"agencies of the | ||||||
23 | United States of America" includes: (i) the Federal National
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24 | Mortgage Association and the Student Loan Marketing | ||||||
25 | Association; (ii) federal
land banks, federal intermediate |
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1 | credit banks,
federal farm credit banks, and any other entity | ||||||
2 | authorized to
issue direct debt obligations of the United | ||||||
3 | States of America under the Farm
Credit Act of 1971 or | ||||||
4 | amendments to that Act; (iii) federal home loan banks and
the | ||||||
5 | Federal Home Loan Mortgage Corporation; and (iv) any agency | ||||||
6 | created
by Act of Congress that is authorized to issue direct | ||||||
7 | debt obligations of the
United States of America.
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8 | (4) Interest bearing savings accounts or certificates of | ||||||
9 | deposit, issued by
federally chartered banks or savings and | ||||||
10 | loan associations, to the extent that
the deposits are insured | ||||||
11 | by agencies or instrumentalities of the federal
government.
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12 | (5) Interest bearing savings accounts or certificates of | ||||||
13 | deposit, issued by
State of Illinois chartered banks or savings | ||||||
14 | and loan associations, to the
extent that the deposits are | ||||||
15 | insured by agencies or instrumentalities of the
federal | ||||||
16 | government.
| ||||||
17 | (6) Investments in credit unions, to the extent that the | ||||||
18 | investments are
insured by agencies or instrumentalities of the | ||||||
19 | federal government.
| ||||||
20 | (7) Interest bearing bonds of the State of Illinois.
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21 | (8) Pooled interest bearing accounts managed by the | ||||||
22 | Illinois Public
Treasurer's Investment Pool in accordance with | ||||||
23 | the Deposit of State Moneys Act,
interest bearing funds or | ||||||
24 | pooled accounts of the Illinois Metropolitan Investment Funds, | ||||||
25 | and interest bearing funds or pooled accounts managed, | ||||||
26 | operated, and
administered by banks, subsidiaries of banks, or |
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1 | subsidiaries of bank holding
companies in accordance with the | ||||||
2 | laws of the State of Illinois.
| ||||||
3 | (9) Interest bearing bonds or tax anticipation warrants of | ||||||
4 | any county,
township, or municipal corporation of the State of | ||||||
5 | Illinois.
| ||||||
6 | (10) Direct obligations of the State of Israel, subject to | ||||||
7 | the conditions
and limitations of item (5.1) of Section 1-113.
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8 | (11) Money market mutual funds managed by investment | ||||||
9 | companies that are
registered under the federal Investment | ||||||
10 | Company Act of 1940 and the Illinois
Securities Law of 1953 and | ||||||
11 | are diversified, open-ended management investment
companies; | ||||||
12 | provided that the portfolio of the money market mutual fund is
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13 | limited to the following:
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14 | (i) bonds, notes, certificates of indebtedness, | ||||||
15 | treasury bills, or other
securities that are guaranteed by | ||||||
16 | the full faith and credit of the United
States of America | ||||||
17 | as to principal and interest;
| ||||||
18 | (ii) bonds, notes, debentures, or other similar | ||||||
19 | obligations of the United
States of America or its | ||||||
20 | agencies; and
| ||||||
21 | (iii) short term obligations of corporations organized | ||||||
22 | in the United
States with assets exceeding $400,000,000, | ||||||
23 | provided that (A) the obligations
mature no later than 180 | ||||||
24 | days from the date of purchase, (B) at the time of
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25 | purchase, the obligations are rated by at least 2 standard | ||||||
26 | national rating
services at one of their 3 highest |
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1 | classifications, and (C) the obligations
held by the mutual | ||||||
2 | fund do not exceed 10% of the corporation's outstanding
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3 | obligations.
| ||||||
4 | (12) General accounts of life insurance companies | ||||||
5 | authorized to transact
business in Illinois.
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6 | (13) Any combination of the following, not to exceed 10% of | ||||||
7 | the pension
fund's net assets:
| ||||||
8 | (i) separate accounts that are managed by life | ||||||
9 | insurance companies
authorized to transact business in | ||||||
10 | Illinois and are comprised of diversified
portfolios | ||||||
11 | consisting of common or preferred stocks, bonds, or money | ||||||
12 | market
instruments;
| ||||||
13 | (ii) separate accounts that are managed by insurance | ||||||
14 | companies authorized
to transact business in Illinois, and | ||||||
15 | are comprised of real estate
or loans upon real estate | ||||||
16 | secured by first or second mortgages; and
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17 | (iii) mutual funds that meet the following | ||||||
18 | requirements:
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19 | (A) the mutual fund is managed by an investment | ||||||
20 | company as defined and
registered under the federal | ||||||
21 | Investment Company Act of 1940 and registered
under the | ||||||
22 | Illinois Securities Law of 1953;
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23 | (B) the mutual fund has been in operation for at | ||||||
24 | least 5 years;
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25 | (C) the mutual fund has total net assets of $250 | ||||||
26 | million or more; and
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1 | (D) the mutual fund is comprised of diversified | ||||||
2 | portfolios of
common or preferred stocks, bonds, or | ||||||
3 | money market instruments.
| ||||||
4 | (14) Corporate bonds managed through an investment advisor | ||||||
5 | must meet all of the following requirements: | ||||||
6 | (1) The bonds must be rated as investment grade by one | ||||||
7 | of the 2 largest rating services at the time of purchase. | ||||||
8 | (2) If subsequently downgraded below investment grade, | ||||||
9 | the bonds must be liquidated from the portfolio within 90 | ||||||
10 | days after being downgraded by the manager. | ||||||
11 | (Source: P.A. 96-1495, eff. 1-1-11.)
| ||||||
12 | (40 ILCS 5/1-113.3)
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13 | Sec. 1-113.3.
List of additional permitted investments for | ||||||
14 | certain pension funds
with net assets of $2,500,000 or more.
| ||||||
15 | (a) Beginning 24 months after the effective date of this | ||||||
16 | amendatory Act of the 100th General Assembly, or when the | ||||||
17 | transfer of investment authority is made pursuant to Section | ||||||
18 | 1-113.05, whichever occurs first, subsection (a-5) of this | ||||||
19 | Section does not apply to any pension fund that is an eligible | ||||||
20 | pension fund as defined in Section 1-101.6. | ||||||
21 | (a-5) Except as provided in subsection (a), in (a) In | ||||||
22 | addition to the items in Section
3-113.2, a pension fund | ||||||
23 | established under Article 3 or 4 that has net assets of
at | ||||||
24 | least $2,500,000 may invest a portion of its net assets in the | ||||||
25 | following
items:
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1 | (1) Separate accounts that are managed by life | ||||||
2 | insurance companies
authorized to transact business in | ||||||
3 | Illinois and are comprised of diversified
portfolios | ||||||
4 | consisting of common or preferred stocks, bonds, or money | ||||||
5 | market
instruments.
| ||||||
6 | (2) Mutual funds that meet the following requirements:
| ||||||
7 | (i) the mutual fund is managed by an investment | ||||||
8 | company as defined and
registered under the federal | ||||||
9 | Investment Company Act of 1940 and registered
under the | ||||||
10 | Illinois Securities Law of 1953;
| ||||||
11 | (ii) the mutual fund has been in operation for at | ||||||
12 | least 5 years;
| ||||||
13 | (iii) the mutual fund has total net assets of $250 | ||||||
14 | million or more; and
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15 | (iv) the mutual fund is comprised of diversified | ||||||
16 | portfolios of common or
preferred stocks, bonds, or | ||||||
17 | money market instruments.
| ||||||
18 | (b) A pension fund's total investment in the items | ||||||
19 | authorized under this
Section shall not exceed 35% of the | ||||||
20 | market value of the pension fund's net
present assets stated in | ||||||
21 | its most recent annual report on file with the
Illinois | ||||||
22 | Department of Insurance.
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23 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
24 | (40 ILCS 5/1-113.4)
| ||||||
25 | Sec. 1-113.4. List of additional permitted investments for |
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| |||||||
1 | certain pension funds
with net assets of $5,000,000 or more. | ||||||
2 | (a) Beginning 24 months after the effective date of this | ||||||
3 | amendatory Act of the 100th General Assembly, or when the | ||||||
4 | transfer of investment authority is made pursuant to Section | ||||||
5 | 1-113.05, whichever occurs first, subsection (a-5) of this | ||||||
6 | Section does not apply to any pension fund that is an eligible | ||||||
7 | pension fund as defined in Section 1-101.6. | ||||||
8 | (a-5) Except as provided in subsection (a), in (a) In | ||||||
9 | addition to the items in Sections 1-113.2 and 1-113.3, a | ||||||
10 | pension fund
established under Article 3 or 4 that has net | ||||||
11 | assets of at least $5,000,000 and
has appointed an investment | ||||||
12 | adviser under Section 1-113.5 may, through that
investment | ||||||
13 | adviser, invest a portion of its assets in common and preferred
| ||||||
14 | stocks authorized for investments of trust funds under the laws | ||||||
15 | of the State
of Illinois. The stocks must meet all of the | ||||||
16 | following requirements:
| ||||||
17 | (1) The common stocks are listed on a national | ||||||
18 | securities exchange or
board of trade (as defined in the | ||||||
19 | federal Securities Exchange Act of 1934 and
set forth in | ||||||
20 | subdivision G of Section 3 of the Illinois Securities Law | ||||||
21 | of 1953) or quoted in
the National Association of | ||||||
22 | Securities Dealers Automated Quotation System
National | ||||||
23 | Market System (NASDAQ NMS).
| ||||||
24 | (2) The securities are of a corporation created or | ||||||
25 | existing under the laws
of the United States or any state, | ||||||
26 | district, or territory thereof and the
corporation has been |
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1 | in existence for at least 5 years.
| ||||||
2 | (3) The corporation has not been in arrears on payment | ||||||
3 | of dividends on its
preferred stock during the preceding 5 | ||||||
4 | years.
| ||||||
5 | (4) The market value of stock in any one corporation | ||||||
6 | does not exceed 5% of
the cash and invested assets of the | ||||||
7 | pension fund, and the investments in the
stock of any one | ||||||
8 | corporation do not exceed 5% of the total outstanding stock | ||||||
9 | of
that corporation.
| ||||||
10 | (5) The straight preferred stocks or convertible | ||||||
11 | preferred stocks are
issued or guaranteed by a corporation | ||||||
12 | whose common stock qualifies for
investment by the board.
| ||||||
13 | (6) The issuer of the stocks has been subject to the | ||||||
14 | requirements of
Section 12 of the federal Securities | ||||||
15 | Exchange Act of 1934 and has been current
with the filing | ||||||
16 | requirements of Sections 13 and 14 of that Act during the
| ||||||
17 | preceding 3 years.
| ||||||
18 | (b) A pension fund's total investment in the items | ||||||
19 | authorized under this
Section and Section 1-113.3 shall not | ||||||
20 | exceed 35% of the market value of the
pension fund's net | ||||||
21 | present assets stated in its most recent annual report on
file | ||||||
22 | with the Illinois Department of Insurance.
| ||||||
23 | (c) A pension fund that invests funds under this Section | ||||||
24 | shall
electronically file with the Division any reports of its | ||||||
25 | investment activities
that the Division may require, at the | ||||||
26 | times and in the format required by the
Division.
|
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| |||||||
1 | (Source: P.A. 100-201, eff. 8-18-17.)
| ||||||
2 | (40 ILCS 5/1-113.4a) | ||||||
3 | Sec. 1-113.4a. List of additional permitted investments | ||||||
4 | for certain Article 3 and 4 pension funds with net assets of | ||||||
5 | $10,000,000 or more. | ||||||
6 | (a) Beginning 24 months after the effective date of this | ||||||
7 | amendatory Act of the 100th General Assembly, or when the | ||||||
8 | transfer of investment authority is made pursuant to Section | ||||||
9 | 1-113.05, whichever occurs first, subsection (a-5) of this | ||||||
10 | Section does not apply to any pension fund that is an eligible | ||||||
11 | pension fund as defined in Section 1-101.6. | ||||||
12 | (a-5) Except as provided in subsection (a), in (a) In | ||||||
13 | addition to the items in Sections 1-113.2 and 1-113.3, a | ||||||
14 | pension fund established under Article 3 or 4 that has net | ||||||
15 | assets of at least $10,000,000 and has appointed an investment | ||||||
16 | adviser, as defined under Sections 1-101.4 and 1-113.5, may, | ||||||
17 | through that investment adviser, invest an additional portion | ||||||
18 | of its assets in common and preferred stocks and mutual funds. | ||||||
19 | (b) The stocks must meet all of the following requirements: | ||||||
20 | (1) The common stocks must be listed on a national | ||||||
21 | securities exchange or board of trade (as defined in the | ||||||
22 | Federal Securities Exchange Act of 1934 and set forth in | ||||||
23 | paragraph G of Section 3 of the Illinois Securities Law of | ||||||
24 | 1953) or quoted in the National Association of Securities | ||||||
25 | Dealers Automated Quotation System National Market System. |
| |||||||
| |||||||
1 | (2) The securities must be of a corporation in | ||||||
2 | existence for at least 5 years. | ||||||
3 | (3) The market value of stock in any one corporation | ||||||
4 | may not exceed 5% of the cash and invested assets of the | ||||||
5 | pension fund, and the investments in the stock of any one | ||||||
6 | corporation may not exceed 5% of the total outstanding | ||||||
7 | stock of that corporation. | ||||||
8 | (4) The straight preferred stocks or convertible | ||||||
9 | preferred stocks must be issued or guaranteed by a | ||||||
10 | corporation whose common stock qualifies for investment by | ||||||
11 | the board. | ||||||
12 | (c) The mutual funds must meet the following requirements: | ||||||
13 | (1) The mutual fund must be managed by an investment | ||||||
14 | company registered under the Federal Investment Company | ||||||
15 | Act of 1940 and registered under the Illinois Securities | ||||||
16 | Law of 1953. | ||||||
17 | (2) The mutual fund must have been in operation for at | ||||||
18 | least 5 years. | ||||||
19 | (3) The mutual fund must have total net assets of | ||||||
20 | $250,000,000 or more. | ||||||
21 | (4) The mutual fund must be comprised of a diversified | ||||||
22 | portfolio of common or preferred stocks, bonds, or money | ||||||
23 | market instruments. | ||||||
24 | (d) A pension fund's total investment in the items | ||||||
25 | authorized under this Section and Section 1-113.3 shall not | ||||||
26 | exceed 50% effective July 1, 2011 and 55% effective July 1, |
| |||||||
| |||||||
1 | 2012 of the market value of the pension fund's net present | ||||||
2 | assets stated in its most recent annual report on file with the | ||||||
3 | Department of Insurance. | ||||||
4 | (e) A pension fund that invests funds under this Section | ||||||
5 | shall electronically file with the Division any reports of its | ||||||
6 | investment activities that the Division may require, at the | ||||||
7 | time and in the format required by the Division.
| ||||||
8 | (Source: P.A. 96-1495, eff. 1-1-11.)
| ||||||
9 | (40 ILCS 5/1-113.5)
| ||||||
10 | Sec. 1-113.5. Investment advisers and investment services | ||||||
11 | for certain all Article 3 or 4 pension funds.
| ||||||
12 | (a) Beginning 24 months after the effective date of this | ||||||
13 | amendatory Act of the 100th General Assembly, or when the | ||||||
14 | transfer of investment authority is made pursuant to Section | ||||||
15 | 1-113.05, whichever occurs first, subsection (a-1) of this | ||||||
16 | Section does not apply to any pension fund that is an eligible | ||||||
17 | pension fund as defined in Section 1-101.6. | ||||||
18 | (a-1) Except as provided in subsection (a), the (a) The | ||||||
19 | board of trustees of a pension fund established under Article 3 | ||||||
20 | or 4 of this Code may appoint investment advisers
as defined in | ||||||
21 | Section 1-101.4. The board of any pension fund investing in
| ||||||
22 | common or preferred stock under Section 1-113.4 shall appoint | ||||||
23 | an investment
adviser before making such investments.
| ||||||
24 | The investment adviser or consultant shall be a fiduciary, | ||||||
25 | as defined in Section 1-101.2,
with respect to the pension fund |
| |||||||
| |||||||
1 | and shall be one of the following:
| ||||||
2 | (1) an investment adviser registered under the federal | ||||||
3 | Investment Advisers
Act of 1940 and the Illinois Securities | ||||||
4 | Law of 1953;
| ||||||
5 | (2) a bank or trust company authorized to conduct a | ||||||
6 | trust business in
Illinois;
| ||||||
7 | (3) a life insurance company authorized to transact | ||||||
8 | business in Illinois;
or
| ||||||
9 | (4) an investment company as defined and registered | ||||||
10 | under the federal
Investment Company Act of 1940 and | ||||||
11 | registered under the Illinois Securities Law
of 1953.
| ||||||
12 | (a-5) Notwithstanding any other provision of law, a person | ||||||
13 | or entity that provides consulting services (referred to as a | ||||||
14 | "consultant" in this Section) to a pension fund with respect to | ||||||
15 | the selection of fiduciaries may not be awarded a contract to | ||||||
16 | provide those consulting services that is more than 5 years in | ||||||
17 | duration. No contract to provide such consulting services may | ||||||
18 | be renewed or extended. At the end of the term of a contract, | ||||||
19 | however, the contractor is eligible to compete for a new | ||||||
20 | contract. No person shall attempt to avoid or contravene the | ||||||
21 | restrictions of this subsection by any means. All offers from | ||||||
22 | responsive offerors shall be accompanied by disclosure of the | ||||||
23 | names and addresses of the following: | ||||||
24 | (1) The offeror. | ||||||
25 | (2) Any entity that is a parent of, or owns a | ||||||
26 | controlling interest in, the offeror. |
| |||||||
| |||||||
1 | (3) Any entity that is a subsidiary of, or in which a | ||||||
2 | controlling interest is owned by, the offeror. | ||||||
3 | Beginning on July 1, 2008, a person, other than a trustee | ||||||
4 | or an employee of a pension fund or retirement system, may not | ||||||
5 | act as a consultant under this Section unless that person is at | ||||||
6 | least one of the following: (i) registered as an investment | ||||||
7 | adviser under the federal Investment Advisers Act of 1940 (15 | ||||||
8 | U.S.C. 80b-1, et seq.); (ii) registered as an investment | ||||||
9 | adviser under the Illinois Securities Law of 1953; (iii) a | ||||||
10 | bank, as defined in the Investment Advisers Act of 1940; or | ||||||
11 | (iv) an insurance company authorized to transact business in | ||||||
12 | this State. | ||||||
13 | (b) All investment advice and services provided by an | ||||||
14 | investment adviser
or a consultant appointed under this Section | ||||||
15 | shall be rendered pursuant to a written contract
between the | ||||||
16 | investment adviser and the board, and in accordance with the
| ||||||
17 | board's investment policy.
| ||||||
18 | The contract shall include all of the following:
| ||||||
19 | (1) acknowledgement in writing by the investment | ||||||
20 | adviser that he or she
is a fiduciary with respect to the | ||||||
21 | pension fund;
| ||||||
22 | (2) the board's investment policy;
| ||||||
23 | (3) full disclosure of direct and indirect fees, | ||||||
24 | commissions, penalties,
and any other compensation that | ||||||
25 | may be received by the investment adviser,
including | ||||||
26 | reimbursement for expenses; and
|
| |||||||
| |||||||
1 | (4) a requirement that the investment adviser submit | ||||||
2 | periodic written
reports, on at least a quarterly basis, | ||||||
3 | for the board's review at its regularly
scheduled meetings. | ||||||
4 | All returns on investment shall be reported as net returns
| ||||||
5 | after payment of all fees, commissions, and any other | ||||||
6 | compensation.
| ||||||
7 | (b-5) Each contract described in subsection (b) shall also | ||||||
8 | include (i) full disclosure of direct and indirect fees, | ||||||
9 | commissions, penalties, and other compensation, including
| ||||||
10 | reimbursement for expenses, that may be paid by or on behalf of | ||||||
11 | the investment adviser or consultant in connection with the | ||||||
12 | provision of services to the pension fund and (ii) a | ||||||
13 | requirement that the investment adviser or consultant update | ||||||
14 | the disclosure promptly after a modification of those payments | ||||||
15 | or an additional payment. | ||||||
16 | Within 30 days after the effective date of this amendatory | ||||||
17 | Act of the 95th General Assembly, each investment adviser and | ||||||
18 | consultant providing services on the effective date or subject | ||||||
19 | to an existing contract for the provision of services must | ||||||
20 | disclose to the board of trustees all direct and indirect fees, | ||||||
21 | commissions, penalties, and other compensation paid by or on
| ||||||
22 | behalf of the investment adviser or consultant in connection | ||||||
23 | with the provision of those services and shall update that | ||||||
24 | disclosure promptly after a modification of those payments or | ||||||
25 | an additional payment. | ||||||
26 | A person required to make a disclosure under subsection (d) |
| |||||||
| |||||||
1 | is also required to disclose direct and indirect fees, | ||||||
2 | commissions, penalties, or other compensation that shall or may | ||||||
3 | be paid by or on behalf of the person in connection with the | ||||||
4 | rendering of those services. The person shall update the | ||||||
5 | disclosure promptly after a modification of those payments or | ||||||
6 | an additional payment. | ||||||
7 | The disclosures required by this subsection shall be in | ||||||
8 | writing and shall include the date and amount of each payment | ||||||
9 | and the name and address of each recipient of a payment. | ||||||
10 | (c) Within 30 days after appointing an investment adviser | ||||||
11 | or consultant, the board shall
submit a copy of the contract to | ||||||
12 | the Division of Insurance of the Department of Financial and | ||||||
13 | Professional Regulation.
| ||||||
14 | (d) Investment services provided by a person other than an | ||||||
15 | investment
adviser appointed under this Section, including but | ||||||
16 | not limited to services
provided by the kinds of persons listed | ||||||
17 | in items (1) through (4) of subsection
(a), shall be rendered | ||||||
18 | only after full written disclosure of direct and
indirect fees, | ||||||
19 | commissions, penalties, and any other compensation that shall | ||||||
20 | or
may be received by the person rendering those services.
| ||||||
21 | (e) The board of trustees of each pension fund shall retain | ||||||
22 | records of
investment transactions in accordance with the rules | ||||||
23 | of the Department of
Financial and Professional Regulation.
| ||||||
24 | (f) Upon the initial transfer of assets and investment | ||||||
25 | authority of an eligible pension fund under subsection (b) of | ||||||
26 | Section 3-135 or subsection (b) of Section 4-128 of this Code, |
| |||||||
| |||||||
1 | and thereafter in perpetuity, the Board of Trustees of the | ||||||
2 | Illinois Municipal Retirement Fund shall provide all | ||||||
3 | investment services for that eligible pension fund. Any fees | ||||||
4 | for these services shall be paid from the respective pension | ||||||
5 | funds. | ||||||
6 | The Board of Trustees of the Illinois Municipal Retirement | ||||||
7 | Fund shall not be held liable by or indemnify any individual | ||||||
8 | annuitant or beneficiary of any eligible pension fund | ||||||
9 | established under Article 3 or Article 4 of this Code for | ||||||
10 | nonpayment of benefits by the eligible pension fund. | ||||||
11 | (Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)
| ||||||
12 | (40 ILCS 5/1-113.6)
| ||||||
13 | Sec. 1-113.6. Investment policies. | ||||||
14 | (a) Except as provided in subsection (b), every Every board | ||||||
15 | of trustees of a pension
fund shall adopt a written investment | ||||||
16 | policy and file a copy of that policy
with the Department of | ||||||
17 | Insurance within 30 days after its adoption. Whenever a
board | ||||||
18 | changes its investment policy, it shall file a copy of the new | ||||||
19 | policy
with the Department within 30 days.
| ||||||
20 | (b) Beginning 24 months after the effective date of this | ||||||
21 | amendatory Act of the 100th General Assembly, or upon the | ||||||
22 | transfer of its investment authority under Section 1-113.05, | ||||||
23 | whichever occurs first, the requirement to maintain and file an | ||||||
24 | investment policy under subsection (a) ceases to apply to the | ||||||
25 | board of trustees of an eligible pension fund established under |
| |||||||
| |||||||
1 | Article 3 or Article 4 of this Code. | ||||||
2 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
3 | (40 ILCS 5/1-113.7)
| ||||||
4 | Sec. 1-113.7. Registration of investments; custody and | ||||||
5 | safekeeping. | ||||||
6 | This Section does not apply to investments that have been
| ||||||
7 | transferred under Section 1-113.05. | ||||||
8 | The
board of trustees may register the investments of its | ||||||
9 | pension fund in the name
of the pension fund, in the nominee | ||||||
10 | name of a bank or trust company authorized
to conduct a trust | ||||||
11 | business in Illinois, or in the nominee name of the Illinois
| ||||||
12 | Public Treasurer's Investment Pool.
| ||||||
13 | The assets of the pension fund and ownership of its | ||||||
14 | investments shall be
protected through third-party custodial | ||||||
15 | safekeeping. The board of trustees
may appoint as custodian of | ||||||
16 | the investments of its pension fund the treasurer
of the | ||||||
17 | municipality, a bank or trust company authorized to conduct a | ||||||
18 | trust
business in Illinois, or the Illinois Public Treasurer's | ||||||
19 | Investment Pool.
| ||||||
20 | A dealer may not maintain possession of or control over | ||||||
21 | securities of a
pension fund subject to the provisions of this | ||||||
22 | Section unless it is registered
as a broker-dealer with the | ||||||
23 | U.S. Securities and Exchange Commission and is a
member in good | ||||||
24 | standing of the National Association of Securities Dealers, and
| ||||||
25 | (1) with respect to securities that are not issued only in |
| |||||||
| |||||||
1 | book-entry form,
(A) all such securities of each fund are | ||||||
2 | either held in safekeeping in a place
reasonably free from risk | ||||||
3 | of destruction or held in custody by a securities
depository | ||||||
4 | that is a "clearing agency" registered with the U.S. Securities | ||||||
5 | and
Exchange Commission, (B) the dealer is a member of the | ||||||
6 | Securities Investor
Protection Corporation, (C) the dealer | ||||||
7 | sends to each fund, no less frequently
than each calendar | ||||||
8 | quarter, an itemized statement showing the moneys and
| ||||||
9 | securities in the custody or possession of the dealer at the | ||||||
10 | end of such
period, and (D) an independent certified public | ||||||
11 | accountant
conducts an audit, no less frequently than each | ||||||
12 | calendar year, that reviews
the dealer's internal accounting | ||||||
13 | controls and procedures for safeguarding
securities; and (2) | ||||||
14 | with respect
to securities that are issued only in book-entry | ||||||
15 | form, (A) all such securities
of each fund are held either in a | ||||||
16 | securities depository that is a "clearing
agency" registered | ||||||
17 | with the U.S. Securities and Exchange Commission or in a
bank | ||||||
18 | that is a member of the Federal Reserve System, (B) the dealer | ||||||
19 | records the
ownership interest of the funds in such securities | ||||||
20 | on the dealer's books and
records, (C) the dealer is a member | ||||||
21 | of the Securities Investor Protection
Corporation, (D) the | ||||||
22 | dealer sends to each fund, no less frequently than each
| ||||||
23 | calendar quarter, an itemized statement showing the moneys and | ||||||
24 | securities in
the custody or possession of the dealer at the | ||||||
25 | end of such period, and (E) the
dealer's financial statement | ||||||
26 | (which shall contain among other things a
statement of the |
| |||||||
| |||||||
1 | dealer's net capital and its required net capital computed in
| ||||||
2 | accordance with Rule 15c3-1 under the Securities Exchange Act | ||||||
3 | of 1934) is
audited annually by an independent certified public | ||||||
4 | accountant, and the
dealer's most recent audited financial | ||||||
5 | statement is furnished to the fund. No
broker-dealer serving as | ||||||
6 | a custodian for any public pension fund as provided by
this Act | ||||||
7 | shall be authorized to serve as an investment advisor for that | ||||||
8 | same
public pension fund as described in Section 1-101.4 of | ||||||
9 | this Code, to the
extent that the investment advisor acquires | ||||||
10 | or disposes of any asset of that
same public pension fund.
| ||||||
11 | Notwithstanding the foregoing, in no event may a broker or | ||||||
12 | dealer that is a
natural person maintain possession of or | ||||||
13 | control over securities or other
assets of a pension fund | ||||||
14 | subject to the provisions of this Section. In
maintaining | ||||||
15 | securities of a pension fund subject to the provisions of this
| ||||||
16 | Section, each dealer must maintain those securities in | ||||||
17 | conformity with the
provisions of Rule 15c3-3(b) of the | ||||||
18 | Securities Exchange Act of 1934 (Physical
Possession or Control | ||||||
19 | of Securities). The Director of the Department of
Insurance may | ||||||
20 | adopt such rules and regulations as shall be necessary and
| ||||||
21 | appropriate in his or her judgment to effectuate the purposes | ||||||
22 | of this
Section.
| ||||||
23 | A bank or trust company authorized to conduct a trust | ||||||
24 | business in Illinois
shall register, deposit, or hold | ||||||
25 | investments for safekeeping, all in accordance
with the | ||||||
26 | obligations and subject to the limitations of the Securities in
|
| |||||||
| |||||||
1 | Fiduciary Accounts Act.
| ||||||
2 | (Source: P.A. 92-651, eff. 7-11-02.)
| ||||||
3 | (40 ILCS 5/3-127) (from Ch. 108 1/2, par. 3-127)
| ||||||
4 | Sec. 3-127. Reserves. | ||||||
5 | (a) The board shall establish and maintain a reserve
to | ||||||
6 | insure the payment of all obligations incurred under this | ||||||
7 | Article
excluding retirement annuities established under | ||||||
8 | Section 3-109.3. The
reserve to be accumulated shall be equal | ||||||
9 | to the estimated total actuarial
requirements of the fund.
| ||||||
10 | (b) In the case of an eligible pension fund that has | ||||||
11 | transferred its investment authority to the Board of Trustees | ||||||
12 | of the Illinois Municipal Retirement Fund under Section | ||||||
13 | 1-113.05 of this Code, the assets invested by the Board of | ||||||
14 | Trustees of the Illinois Municipal Retirement Fund on behalf of | ||||||
15 | the pension fund, and the dividends and other investment | ||||||
16 | earnings attributable thereto, shall be considered as part of | ||||||
17 | the reserve for the purposes of this Section. | ||||||
18 | The Board of Trustees of the Illinois Municipal Retirement | ||||||
19 | Fund shall report to the board of each such fund, at least | ||||||
20 | annually and upon the reasonable request of an eligible pension | ||||||
21 | fund, the financial information on the invested assets and | ||||||
22 | earnings attributable to that pension fund so that the board | ||||||
23 | may make the determinations required under this Article. | ||||||
24 | (c) If a pension fund has a reserve of less than the | ||||||
25 | accrued liabilities of
the fund, the board of the pension fund, |
| |||||||
| |||||||
1 | in making its annual report to the
city council or board of | ||||||
2 | trustees of the municipality, shall designate the
amount, | ||||||
3 | calculated as a level percentage of payroll, needed annually to
| ||||||
4 | insure the accumulation of the reserve to the level of the | ||||||
5 | fund's accrued
liabilities over a period of 40 years from July | ||||||
6 | 1, 1993 for pension funds then
in operation, or from the date | ||||||
7 | of establishment in the case of a fund created
thereafter, so | ||||||
8 | that the necessary reserves will be attained over such a | ||||||
9 | period.
| ||||||
10 | (Source: P.A. 91-939, eff. 2-1-01.)
| ||||||
11 | (40 ILCS 5/3-132) (from Ch. 108 1/2, par. 3-132)
| ||||||
12 | Sec. 3-132. To control and manage the Pension Fund. | ||||||
13 | (a) In accordance with the
applicable provisions of | ||||||
14 | Articles 1 and 1A and this Article, the board of trustees of | ||||||
15 | the pension fund shall have the authority to control and
| ||||||
16 | manage, exclusively, the following:
| ||||||
17 | (1) the pension fund, and
| ||||||
18 | (2) investment expenditures and income, including | ||||||
19 | interest dividends,
capital gains and other distributions | ||||||
20 | on the investments, and
| ||||||
21 | (2) (3) all money donated, paid, assessed, or provided | ||||||
22 | by
law for the pensioning of disabled and retired police | ||||||
23 | officers, their
surviving spouses, minor children, and | ||||||
24 | dependent parents.
| ||||||
25 | All such money received or collected shall be credited by |
| |||||||
| |||||||
1 | the treasurer of the
municipality to the Illinois Municipal | ||||||
2 | Retirement Fund's account of the pension fund and
held by the | ||||||
3 | Illinois Municipal Retirement Fund for purposes of investment | ||||||
4 | pursuant to Article 7 of this Code. | ||||||
5 | (b) Pursuant to rules adopted under Article 7 of this Code, | ||||||
6 | the board of trustees of an eligible pension fund shall make | ||||||
7 | periodic written application to the Board of Trustees of the | ||||||
8 | Illinois Municipal Retirement Fund for receipt and deposit of | ||||||
9 | reserves into the pension fund. Reserves in the amount of 3 | ||||||
10 | months' current liabilities, including annuity and benefit | ||||||
11 | payments and operational expenses owed by the fund, shall be | ||||||
12 | held by the treasurer of the municipality subject to the order | ||||||
13 | and
control of the board. The treasurer of the municipality | ||||||
14 | shall maintain a
record of all money received, transferred, and | ||||||
15 | held for the account of the
board.
| ||||||
16 | (c) In case of any dispute that may arise between the board | ||||||
17 | of trustees of the eligible pension fund and the Illinois | ||||||
18 | Municipal Retirement Fund pursuant to subsection (b) of this | ||||||
19 | Section, the board of trustees of the eligible pension fund | ||||||
20 | shall appeal the dispute to the Director of the Illinois | ||||||
21 | Department of Insurance. If the Director finds that there | ||||||
22 | exists a good faith dispute between the parties, the Director | ||||||
23 | may hold a hearing in accordance with the rules of the Illinois | ||||||
24 | Department of Insurance. | ||||||
25 | (Source: P.A. 90-507, eff. 8-22-97.)
|
| |||||||
| |||||||
1 | (40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
| ||||||
2 | Sec. 3-135. To invest , manage, and transfer funds. | ||||||
3 | (a) Except as provided in subsection (b), Beginning January | ||||||
4 | 1, 1998, the
board shall invest funds in accordance with | ||||||
5 | Sections 1-113.1 through 1-113.10
of this Code.
| ||||||
6 | Any pension fund that does not meet the definition of | ||||||
7 | eligible pension fund under Section 1-101.6 of this Code shall | ||||||
8 | retain the authority to control and manage investment | ||||||
9 | expenditures and income, including interest, dividends, | ||||||
10 | capital gains, and other distributions on the investments. | ||||||
11 | (b) The board of an eligible pension fund that receives a | ||||||
12 | certified investment asset list under Section 3-135.1 shall | ||||||
13 | cease investment activities upon receiving the certified | ||||||
14 | investment asset list and shall transfer all investment assets, | ||||||
15 | minus assets needed to comply with subsection (b) of Section | ||||||
16 | 3-132, to the Board of Trustees of the Illinois Municipal | ||||||
17 | Retirement Fund in the manner prescribed by rules adopted by | ||||||
18 | the Board of Trustees of the Illinois Municipal Retirement Fund | ||||||
19 | under Article 7. Upon completion of the transfer described in | ||||||
20 | this subsection, the investment authority of the board shall | ||||||
21 | terminate. | ||||||
22 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
23 | (40 ILCS 5/3-135.1 new) | ||||||
24 | Sec. 3-135.1. Certified investment asset list. | ||||||
25 | (a) Within 24 months of the effective date of this |
| |||||||
| |||||||
1 | amendatory Act of the 100th General Assembly, the Department of | ||||||
2 | Insurance shall audit the investment assets of each eligible | ||||||
3 | pension fund established under this Article to determine a | ||||||
4 | certified investment asset list. The audit shall be performed | ||||||
5 | by a certified public accountant. The board of each pension | ||||||
6 | fund shall defray the expense of the audit. | ||||||
7 | (b) Upon completion of the audit, the Department shall | ||||||
8 | provide the certified investment asset list to the eligible | ||||||
9 | pension fund and the Board of Trustees of the Illinois | ||||||
10 | Municipal Retirement Fund. The Department may adopt rules | ||||||
11 | governing the creation and distribution of the certified | ||||||
12 | investment asset list.
| ||||||
13 | (40 ILCS 5/3-135.2 new) | ||||||
14 | Sec. 3-135.2. To transfer investment funds. At each | ||||||
15 | quarterly meeting of the Board, the Board of trustees of any | ||||||
16 | eligible pension fund shall transfer any available funds for | ||||||
17 | investment to the Board of Trustees of the Illinois Municipal | ||||||
18 | Retirement Fund in accordance with provisions of Article 7 of | ||||||
19 | this Code. Each transfer shall be made within 30 days of the | ||||||
20 | end of the fiscal year quarter and written notice of the | ||||||
21 | transfer shall be given to the Board of Trustees of the | ||||||
22 | Illinois Municipal Retirement Fund.
| ||||||
23 | (40 ILCS 5/4-120) (from Ch. 108 1/2, par. 4-120)
| ||||||
24 | Sec. 4-120. Reserves. |
| |||||||
| |||||||
1 | (a) The board shall establish and maintain a reserve to | ||||||
2 | insure the payment
of all obligations incurred under this | ||||||
3 | Article. The reserve to be accumulated
shall be equal to the | ||||||
4 | estimated total actuarial requirements of the Fund.
| ||||||
5 | (b) In the case of an eligible pension fund that has | ||||||
6 | transferred its investment authority to the Board of Trustees | ||||||
7 | of the Illinois Municipal Retirement Fund under Section | ||||||
8 | 1-113.05 of this Code, the assets invested by the Board of | ||||||
9 | Trustees of the Illinois Municipal Retirement Fund on behalf of | ||||||
10 | the pension fund, and the dividends and other investment | ||||||
11 | earnings attributable thereto, shall be considered as part of | ||||||
12 | the reserve for the purposes of this Section. | ||||||
13 | The Board of Trustees of the Illinois Municipal Retirement | ||||||
14 | Fund shall report to the board of each such fund, at least | ||||||
15 | annually and upon the reasonable request of an eligible pension | ||||||
16 | fund, the financial information on the invested assets and | ||||||
17 | earnings attributable to that pension fund so that the board | ||||||
18 | may make the determinations required under this Article. | ||||||
19 | (Source: P.A. 83-1440.)
| ||||||
20 | (40 ILCS 5/4-123) (from Ch. 108 1/2, par. 4-123)
| ||||||
21 | Sec. 4-123. To control and manage the Pension Fund. | ||||||
22 | (a) In accordance with the
applicable provisions of | ||||||
23 | Articles 1 and 1A and this Article the board of trustees of the | ||||||
24 | pension fund shall have the authority , to control and
manage, | ||||||
25 | exclusively, the following:
|
| |||||||
| |||||||
1 | (1) the pension fund, and
| ||||||
2 | (2) investment expenditures and income, including | ||||||
3 | interest dividends,
capital gains, and other distributions | ||||||
4 | on the investments, and
| ||||||
5 | (2) (3) all money donated, paid, assessed, or provided | ||||||
6 | by law for the
pensioning of disabled and retired | ||||||
7 | firefighters, their surviving spouses,
minor children, and | ||||||
8 | dependent parents. All such money received or collected | ||||||
9 | shall be credited by the treasurer of the
municipality to | ||||||
10 | the Illinois Municipal Retirement Fund's account of the | ||||||
11 | pension fund and held by the Fund for purposes of | ||||||
12 | investment pursuant to Article 7 of this Code. | ||||||
13 | (b) Pursuant to rules adopted under Article 7 of this Code, | ||||||
14 | the board of trustees of an eligible pension fund shall make | ||||||
15 | periodic written application to the Board of Trustees of the | ||||||
16 | Illinois Municipal Retirement Fund for receipt and deposit of | ||||||
17 | reserves into the pension fund. Reserves in the amount of 3 | ||||||
18 | months' current liabilities, including annuity and benefit | ||||||
19 | payments and operational expenses owed by the fund, shall be | ||||||
20 | held by the treasurer of
the municipality subject to the order | ||||||
21 | and control of the board. The treasurer
of the municipality | ||||||
22 | shall maintain a record of all money received, transferred,
and | ||||||
23 | held for the account of the board.
| ||||||
24 | (c) In case of any dispute that may arise between the board | ||||||
25 | of trustees of any eligible pension fund and the Illinois | ||||||
26 | Municipal Retirement Fund pursuant to subsection (b) of this |
| |||||||
| |||||||
1 | Section, the board of trustees of the pension fund shall appeal | ||||||
2 | the dispute to the Director of the Illinois Department of | ||||||
3 | Insurance. If the Director finds good faith dispute between the | ||||||
4 | parties, the Director may hold a hearing in accordance with the | ||||||
5 | rules of the Illinois Department of Insurance. | ||||||
6 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
7 | (40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
| ||||||
8 | Sec. 4-128. To invest and transfer funds. | ||||||
9 | (a) Except as provided in subsection (b), Beginning January | ||||||
10 | 1, 1998, the board shall
invest funds in accordance with | ||||||
11 | Sections 1-113.1 through 1-113.10 of this
Code.
| ||||||
12 | Any pension fund that does not meet the definition of | ||||||
13 | eligible pension fund under Section 1-101.6 of this Code shall | ||||||
14 | retain the authority to control and manage investment | ||||||
15 | expenditures and income, including interest, dividends, | ||||||
16 | capital gains, and other distributions on the investments. | ||||||
17 | (b) The board of an eligible pension fund that receives a | ||||||
18 | certified investment asset list under Section 4-128.1 shall | ||||||
19 | cease investment activities upon receiving the certified | ||||||
20 | investment asset list and shall transfer all investment assets, | ||||||
21 | minus assets needed to comply with subsection (b) of Section | ||||||
22 | 4-123, to the Board of Trustees of the Illinois Municipal | ||||||
23 | Retirement Fund in the manner prescribed by rules adopted by | ||||||
24 | the Board of Trustees of the Illinois Municipal Retirement Fund | ||||||
25 | under Article 7. Upon completion of the transfer described in |
| |||||||
| |||||||
1 | this subsection, the investment authority of the board shall | ||||||
2 | terminate. | ||||||
3 | (Source: P.A. 90-507, eff. 8-22-97.)
| ||||||
4 | (40 ILCS 5/4-128.1 new) | ||||||
5 | Sec. 4-128.1. Certified investment asset list. | ||||||
6 | (a) Within 24 months of the effective date of this | ||||||
7 | amendatory Act of the 100th General Assembly, the Department of | ||||||
8 | Insurance shall audit the investment assets of each eligible | ||||||
9 | pension fund established under this Article to determine a | ||||||
10 | certified investment asset list. The audit shall be performed | ||||||
11 | by a certified public accountant. The board of the pension fund | ||||||
12 | shall defray the expense of the audit. | ||||||
13 | (b) Upon completion of the audit, the Department shall | ||||||
14 | provide the certified investment asset list to the eligible | ||||||
15 | pension fund and the Board of Trustees of the Illinois | ||||||
16 | Municipal Retirement Fund. The Department may adopt rules | ||||||
17 | governing the creation and distribution of the certified | ||||||
18 | investment asset list.
| ||||||
19 | (40 ILCS 5/4-128.2 new) | ||||||
20 | Sec. 4-128.2. To transfer investment funds. At each | ||||||
21 | quarterly meeting of the Board, the Board of trustees of any | ||||||
22 | eligible pension fund shall transfer any available funds for | ||||||
23 | investment to the Board of Trustees of the Illinois Municipal | ||||||
24 | Retirement Fund in accordance with provisions of Article 7 of |
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1 | this Code. Each transfer shall be made within 30 days of the | ||||||
2 | end of the fiscal year quarter and written notice of the | ||||||
3 | transfer shall be given to the Board of Trustees of the | ||||||
4 | Illinois Municipal Retirement Fund.
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5 | (40 ILCS 5/7-226 new) | ||||||
6 | Sec. 7-226. Transfer from Article 3 or 4 fund. | ||||||
7 | (a) Upon receipt of a certified investment asset list | ||||||
8 | provided under Section 3-135.1 or 4-128.1 of this Code for an | ||||||
9 | eligible pension fund, the Board of the Illinois Municipal | ||||||
10 | Retirement Fund shall, as soon as practicable, initiate the | ||||||
11 | transfer of assets from the board of trustees of the eligible | ||||||
12 | fund, and the board of trustees of the eligible fund shall | ||||||
13 | transfer to the Board of Trustees of the Illinois Municipal | ||||||
14 | Retirement Fund for management and investment all of its | ||||||
15 | securities including securities for which commitments have | ||||||
16 | been made, and all funds, assets, or money representing | ||||||
17 | permanent or temporary investments, and cash reserves | ||||||
18 | maintained for the purpose of obtaining income thereon. | ||||||
19 | (b) Upon the transfer of securities and assets from a board | ||||||
20 | of trustees under this Section, the custody and control of the | ||||||
21 | Board of Trustees of the Illinois Municipal Retirement Fund | ||||||
22 | over the present and future assets of the pension fund shall | ||||||
23 | take effect. The transfer shall be receipted for in detail by | ||||||
24 | the Board of the Illinois Municipal Retirement Fund and the | ||||||
25 | receipt shall be provided to the board of trustees of the |
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1 | pension fund within 30 days of the effective date of the | ||||||
2 | transfer. | ||||||
3 | (c) Each pension fund established under Article 3 and 4 of | ||||||
4 | this Code that is under the investment authority of the Board | ||||||
5 | of Trustees of the Illinois Municipal Retirement Fund shall | ||||||
6 | report to the Board of Trustees of the Illinois Municipal | ||||||
7 | Retirement Fund, at the end of each quarter of the pension | ||||||
8 | fund's fiscal year, the amount of funds available for | ||||||
9 | investment. These amounts shall be transferred within 30 days | ||||||
10 | of the end of the quarter to the Board of Trustees of the | ||||||
11 | Illinois Municipal Retirement Fund in a manner prescribed by | ||||||
12 | the Board. Notice to the Board of Trustees of the Illinois | ||||||
13 | Municipal Retirement Fund of each such transfer shall be given | ||||||
14 | by the pension fund as the transfer occurs.
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15 | (40 ILCS 5/7-227 new) | ||||||
16 | Sec. 7-227. Audit of transition. Within 6 months of the | ||||||
17 | completion of the transfer of investment assets from an | ||||||
18 | eligible pension fund established under Article 3 or 4 of this | ||||||
19 | Code to the control of the Board, the books, records, accounts, | ||||||
20 | and securities of the board shall be audited by a certified | ||||||
21 | public accountant designated by the Illinois Auditor General. | ||||||
22 | The audit shall include, but is not limited to, the following: | ||||||
23 | (i) a full description of the investments acquired, showing | ||||||
24 | average costs;
(ii) a full description of the securities sold | ||||||
25 | or exchanged, showing average proceeds or other conditions of |
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1 | an exchange;
(iii) gains or losses realized during the period;
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2 | (iv) income from investments;
(v) administrative expenses of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | the board; and
(vi) the proportion of administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | allocable to each pension fund.
The audit report shall be | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | published on the Board's website and filed with the Illinois | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Department of Insurance.
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7 | Section 90. The State Mandates Act is amended by adding | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Section 8.42 as follows:
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9 | (30 ILCS 805/8.42 new) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | Sec. 8.42. Exempt mandate. Notwithstanding Sections 6 and 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 | of this Act, no reimbursement by the State is required for the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12 | implementation of any mandate created by this amendatory Act of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13 | the 100th General Assembly.
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