Bill Text: IL SB3426 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Illinois Pension Code. Merges all Article 3 police officers' pension funds and Article 4 firefighters' pension funds into the Illinois Municipal Retirement Fund (IMRF) on January 1, 2020. Creates a Transition Board, which is responsible for planning, overseeing, and administering the consolidation. Authorizes the Transition Board to undertake numerous activities necessary for the consolidation, including making arrangements for the transfer of assets and liabilities and for making recommendations to IMRF for an appropriate system of determining, administering, receiving, and enforcing the required municipal contributions to the fund. Makes conforming and other changes. Provides that a person first employed as a police officer or firefighter on or after January 1, 2020 shall participate and earn benefits in IMRF as an employee under the IMRF Article (rather than participating and earning benefits under the Downstate Police or Downstate Firefighter Articles). Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to IMRF for benefits under the Downstate Police and Downstate Firefighter Articles. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that certain changes to the Illinois Pension Code and PTELL of the Property Tax Code take effect January 1, 2020.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB3426 Detail]

Download: Illinois-2017-SB3426-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB3426 Introduced 2/16/2018, by Sen. Pamela J. Althoff SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Pension Code. Merges all Article 3 police officers' pension funds and Article 4 firefighters' pension funds into the Illinois Municipal Retirement Fund (IMRF) on January 1, 2020. Creates a Transition Board, which is responsible for planning, overseeing, and administering the consolidation. Authorizes the Transition Board to undertake numerous activities necessary for the consolidation, including making arrangements for the transfer of assets and liabilities and for making recommendations to IMRF for an appropriate system of determining, administering, receiving, and enforcing the required municipal contributions to the fund. Makes conforming and other changes. Provides that a person first employed as a police officer or firefighter on or after January 1, 2020 shall participate and earn benefits in IMRF as an employee under the IMRF Article (rather than participating and earning benefits under the Downstate Police or Downstate Firefighter Articles). Amends the Property Tax Extension Limitation Law (PTELL) of the Property Tax Code to exclude from the definition of "aggregate extension" special purpose extensions made for contributions to IMRF for benefits under the Downstate Police and Downstate Firefighter Articles. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately, except that certain changes to the Illinois Pension Code and PTELL of the Property Tax Code take effect January 1, 2020.
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FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Tax Code is amended by changing
Section 18-185 as follows:
(35 ILCS 200/18-185)
Sec. 18-185. Short title; definitions. This Division 5 may
be cited as the Property Tax Extension Limitation Law. As used
in this Division 5:
"Consumer Price Index" means the Consumer Price Index for
All Urban Consumers for all items published by the United
States Department of Labor.
"Extension limitation" means (a) the lesser of 5% or the
percentage increase in the Consumer Price Index during the
12-month calendar year preceding the levy year or (b) the rate
of increase approved by voters under Section 18-205.
"Affected county" means a county of 3,000,000 or more
inhabitants or a county contiguous to a county of 3,000,000 or
more inhabitants.
"Taxing district" has the same meaning provided in Section
1-150, except as otherwise provided in this Section. For the
1991 through 1994 levy years only, "taxing district" includes
only each non-home rule taxing district having the majority of

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its 1990 equalized assessed value within any county or counties
contiguous to a county with 3,000,000 or more inhabitants.
Beginning with the 1995 levy year, "taxing district" includes
only each non-home rule taxing district subject to this Law
before the 1995 levy year and each non-home rule taxing
district not subject to this Law before the 1995 levy year
having the majority of its 1994 equalized assessed value in an
affected county or counties. Beginning with the levy year in
which this Law becomes applicable to a taxing district as
provided in Section 18-213, "taxing district" also includes
those taxing districts made subject to this Law as provided in
Section 18-213.
"Aggregate extension" for taxing districts to which this
Law applied before the 1995 levy year means the annual
corporate extension for the taxing district and those special
purpose extensions that are made annually for the taxing
district, excluding special purpose extensions: (a) made for
the taxing district to pay interest or principal on general
obligation bonds that were approved by referendum; (b) made for
any taxing district to pay interest or principal on general
obligation bonds issued before October 1, 1991; (c) made for
any taxing district to pay interest or principal on bonds
issued to refund or continue to refund those bonds issued
before October 1, 1991; (d) made for any taxing district to pay
interest or principal on bonds issued to refund or continue to
refund bonds issued after October 1, 1991 that were approved by

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referendum; (e) made for any taxing district to pay interest or
principal on revenue bonds issued before October 1, 1991 for
payment of which a property tax levy or the full faith and
credit of the unit of local government is pledged; however, a
tax for the payment of interest or principal on those bonds
shall be made only after the governing body of the unit of
local government finds that all other sources for payment are
insufficient to make those payments; (f) made for payments
under a building commission lease when the lease payments are
for the retirement of bonds issued by the commission before
October 1, 1991, to pay for the building project; (g) made for
payments due under installment contracts entered into before
October 1, 1991; (h) made for payments of principal and
interest on bonds issued under the Metropolitan Water
Reclamation District Act to finance construction projects
initiated before October 1, 1991; (i) made for payments of
principal and interest on limited bonds, as defined in Section
3 of the Local Government Debt Reform Act, in an amount not to
exceed the debt service extension base less the amount in items
(b), (c), (e), and (h) of this definition for non-referendum
obligations, except obligations initially issued pursuant to
referendum; (j) made for payments of principal and interest on
bonds issued under Section 15 of the Local Government Debt
Reform Act; (k) made by a school district that participates in
the Special Education District of Lake County, created by
special education joint agreement under Section 10-22.31 of the

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School Code, for payment of the school district's share of the
amounts required to be contributed by the Special Education
District of Lake County to the Illinois Municipal Retirement
Fund under Article 7 of the Illinois Pension Code; the amount
of any extension under this item (k) shall be certified by the
school district to the county clerk; (l) made to fund expenses
of providing joint recreational programs for persons with
disabilities under Section 5-8 of the Park District Code or
Section 11-95-14 of the Illinois Municipal Code; (m) made for
temporary relocation loan repayment purposes pursuant to
Sections 2-3.77 and 17-2.2d of the School Code; (n) made for
payment of principal and interest on any bonds issued under the
authority of Section 17-2.2d of the School Code; (o) made
before January 1, 2020 for contributions to a firefighter's
pension fund created under Article 4 of the Illinois Pension
Code, to the extent of the amount certified under item (5) of
Section 4-134 of the Illinois Pension Code; and (p) made for
road purposes in the first year after a township assumes the
rights, powers, duties, assets, property, liabilities,
obligations, and responsibilities of a road district abolished
under the provisions of Section 6-133 of the Illinois Highway
Code; and (q) made under Articles 3 and 4 of the Illinois
Pension Code for contributions to the Illinois Municipal
Retirement Fund.
"Aggregate extension" for the taxing districts to which
this Law did not apply before the 1995 levy year (except taxing

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districts subject to this Law in accordance with Section
18-213) means the annual corporate extension for the taxing
district and those special purpose extensions that are made
annually for the taxing district, excluding special purpose
extensions: (a) made for the taxing district to pay interest or
principal on general obligation bonds that were approved by
referendum; (b) made for any taxing district to pay interest or
principal on general obligation bonds issued before March 1,
1995; (c) made for any taxing district to pay interest or
principal on bonds issued to refund or continue to refund those
bonds issued before March 1, 1995; (d) made for any taxing
district to pay interest or principal on bonds issued to refund
or continue to refund bonds issued after March 1, 1995 that
were approved by referendum; (e) made for any taxing district
to pay interest or principal on revenue bonds issued before
March 1, 1995 for payment of which a property tax levy or the
full faith and credit of the unit of local government is
pledged; however, a tax for the payment of interest or
principal on those bonds shall be made only after the governing
body of the unit of local government finds that all other
sources for payment are insufficient to make those payments;
(f) made for payments under a building commission lease when
the lease payments are for the retirement of bonds issued by
the commission before March 1, 1995 to pay for the building
project; (g) made for payments due under installment contracts
entered into before March 1, 1995; (h) made for payments of

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principal and interest on bonds issued under the Metropolitan
Water Reclamation District Act to finance construction
projects initiated before October 1, 1991; (h-4) made for
stormwater management purposes by the Metropolitan Water
Reclamation District of Greater Chicago under Section 12 of the
Metropolitan Water Reclamation District Act; (i) made for
payments of principal and interest on limited bonds, as defined
in Section 3 of the Local Government Debt Reform Act, in an
amount not to exceed the debt service extension base less the
amount in items (b), (c), and (e) of this definition for
non-referendum obligations, except obligations initially
issued pursuant to referendum and bonds described in subsection
(h) of this definition; (j) made for payments of principal and
interest on bonds issued under Section 15 of the Local
Government Debt Reform Act; (k) made for payments of principal
and interest on bonds authorized by Public Act 88-503 and
issued under Section 20a of the Chicago Park District Act for
aquarium or museum projects; (l) made for payments of principal
and interest on bonds authorized by Public Act 87-1191 or
93-601 and (i) issued pursuant to Section 21.2 of the Cook
County Forest Preserve District Act, (ii) issued under Section
42 of the Cook County Forest Preserve District Act for
zoological park projects, or (iii) issued under Section 44.1 of
the Cook County Forest Preserve District Act for botanical
gardens projects; (m) made pursuant to Section 34-53.5 of the
School Code, whether levied annually or not; (n) made to fund

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expenses of providing joint recreational programs for persons
with disabilities under Section 5-8 of the Park District Code
or Section 11-95-14 of the Illinois Municipal Code; (o) made by
the Chicago Park District for recreational programs for persons
with disabilities under subsection (c) of Section 7.06 of the
Chicago Park District Act; (p) made before January 1, 2020 for
contributions to a firefighter's pension fund created under
Article 4 of the Illinois Pension Code, to the extent of the
amount certified under item (5) of Section 4-134 of the
Illinois Pension Code; (q) made by Ford Heights School District
169 under Section 17-9.02 of the School Code; and (r) made for
the purpose of making employer contributions to the Public
School Teachers' Pension and Retirement Fund of Chicago under
Section 34-53 of the School Code; and (s) made under Articles 3
and 4 of the Illinois Pension Code for contributions to the
Illinois Municipal Retirement Fund.
"Aggregate extension" for all taxing districts to which
this Law applies in accordance with Section 18-213, except for
those taxing districts subject to paragraph (2) of subsection
(e) of Section 18-213, means the annual corporate extension for
the taxing district and those special purpose extensions that
are made annually for the taxing district, excluding special
purpose extensions: (a) made for the taxing district to pay
interest or principal on general obligation bonds that were
approved by referendum; (b) made for any taxing district to pay
interest or principal on general obligation bonds issued before

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the date on which the referendum making this Law applicable to
the taxing district is held; (c) made for any taxing district
to pay interest or principal on bonds issued to refund or
continue to refund those bonds issued before the date on which
the referendum making this Law applicable to the taxing
district is held; (d) made for any taxing district to pay
interest or principal on bonds issued to refund or continue to
refund bonds issued after the date on which the referendum
making this Law applicable to the taxing district is held if
the bonds were approved by referendum after the date on which
the referendum making this Law applicable to the taxing
district is held; (e) made for any taxing district to pay
interest or principal on revenue bonds issued before the date
on which the referendum making this Law applicable to the
taxing district is held for payment of which a property tax
levy or the full faith and credit of the unit of local
government is pledged; however, a tax for the payment of
interest or principal on those bonds shall be made only after
the governing body of the unit of local government finds that
all other sources for payment are insufficient to make those
payments; (f) made for payments under a building commission
lease when the lease payments are for the retirement of bonds
issued by the commission before the date on which the
referendum making this Law applicable to the taxing district is
held to pay for the building project; (g) made for payments due
under installment contracts entered into before the date on

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which the referendum making this Law applicable to the taxing
district is held; (h) made for payments of principal and
interest on limited bonds, as defined in Section 3 of the Local
Government Debt Reform Act, in an amount not to exceed the debt
service extension base less the amount in items (b), (c), and
(e) of this definition for non-referendum obligations, except
obligations initially issued pursuant to referendum; (i) made
for payments of principal and interest on bonds issued under
Section 15 of the Local Government Debt Reform Act; (j) made
for a qualified airport authority to pay interest or principal
on general obligation bonds issued for the purpose of paying
obligations due under, or financing airport facilities
required to be acquired, constructed, installed or equipped
pursuant to, contracts entered into before March 1, 1996 (but
not including any amendments to such a contract taking effect
on or after that date); (k) made to fund expenses of providing
joint recreational programs for persons with disabilities
under Section 5-8 of the Park District Code or Section 11-95-14
of the Illinois Municipal Code; (l) made before January 1, 2020
for contributions to a firefighter's pension fund created under
Article 4 of the Illinois Pension Code, to the extent of the
amount certified under item (5) of Section 4-134 of the
Illinois Pension Code; and (m) made for the taxing district to
pay interest or principal on general obligation bonds issued
pursuant to Section 19-3.10 of the School Code; and (n) made
under Articles 3 and 4 of the Illinois Pension Code for

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contributions to the Illinois Municipal Retirement Fund.
"Aggregate extension" for all taxing districts to which
this Law applies in accordance with paragraph (2) of subsection
(e) of Section 18-213 means the annual corporate extension for
the taxing district and those special purpose extensions that
are made annually for the taxing district, excluding special
purpose extensions: (a) made for the taxing district to pay
interest or principal on general obligation bonds that were
approved by referendum; (b) made for any taxing district to pay
interest or principal on general obligation bonds issued before
the effective date of this amendatory Act of 1997; (c) made for
any taxing district to pay interest or principal on bonds
issued to refund or continue to refund those bonds issued
before the effective date of this amendatory Act of 1997; (d)
made for any taxing district to pay interest or principal on
bonds issued to refund or continue to refund bonds issued after
the effective date of this amendatory Act of 1997 if the bonds
were approved by referendum after the effective date of this
amendatory Act of 1997; (e) made for any taxing district to pay
interest or principal on revenue bonds issued before the
effective date of this amendatory Act of 1997 for payment of
which a property tax levy or the full faith and credit of the
unit of local government is pledged; however, a tax for the
payment of interest or principal on those bonds shall be made
only after the governing body of the unit of local government
finds that all other sources for payment are insufficient to

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make those payments; (f) made for payments under a building
commission lease when the lease payments are for the retirement
of bonds issued by the commission before the effective date of
this amendatory Act of 1997 to pay for the building project;
(g) made for payments due under installment contracts entered
into before the effective date of this amendatory Act of 1997;
(h) made for payments of principal and interest on limited
bonds, as defined in Section 3 of the Local Government Debt
Reform Act, in an amount not to exceed the debt service
extension base less the amount in items (b), (c), and (e) of
this definition for non-referendum obligations, except
obligations initially issued pursuant to referendum; (i) made
for payments of principal and interest on bonds issued under
Section 15 of the Local Government Debt Reform Act; (j) made
for a qualified airport authority to pay interest or principal
on general obligation bonds issued for the purpose of paying
obligations due under, or financing airport facilities
required to be acquired, constructed, installed or equipped
pursuant to, contracts entered into before March 1, 1996 (but
not including any amendments to such a contract taking effect
on or after that date); (k) made to fund expenses of providing
joint recreational programs for persons with disabilities
under Section 5-8 of the Park District Code or Section 11-95-14
of the Illinois Municipal Code; and (l) made before January 1,
2020 for contributions to a firefighter's pension fund created
under Article 4 of the Illinois Pension Code, to the extent of

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the amount certified under item (5) of Section 4-134 of the
Illinois Pension Code; and (m) made under Articles 3 and 4 of
the Illinois Pension Code for contributions to the Illinois
Municipal Retirement Fund.
"Debt service extension base" means an amount equal to that
portion of the extension for a taxing district for the 1994
levy year, or for those taxing districts subject to this Law in
accordance with Section 18-213, except for those subject to
paragraph (2) of subsection (e) of Section 18-213, for the levy
year in which the referendum making this Law applicable to the
taxing district is held, or for those taxing districts subject
to this Law in accordance with paragraph (2) of subsection (e)
of Section 18-213 for the 1996 levy year, constituting an
extension for payment of principal and interest on bonds issued
by the taxing district without referendum, but not including
excluded non-referendum bonds. For park districts (i) that were
first subject to this Law in 1991 or 1995 and (ii) whose
extension for the 1994 levy year for the payment of principal
and interest on bonds issued by the park district without
referendum (but not including excluded non-referendum bonds)
was less than 51% of the amount for the 1991 levy year
constituting an extension for payment of principal and interest
on bonds issued by the park district without referendum (but
not including excluded non-referendum bonds), "debt service
extension base" means an amount equal to that portion of the
extension for the 1991 levy year constituting an extension for

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payment of principal and interest on bonds issued by the park
district without referendum (but not including excluded
non-referendum bonds). A debt service extension base
established or increased at any time pursuant to any provision
of this Law, except Section 18-212, shall be increased each
year commencing with the later of (i) the 2009 levy year or
(ii) the first levy year in which this Law becomes applicable
to the taxing district, by the lesser of 5% or the percentage
increase in the Consumer Price Index during the 12-month
calendar year preceding the levy year. The debt service
extension base may be established or increased as provided
under Section 18-212. "Excluded non-referendum bonds" means
(i) bonds authorized by Public Act 88-503 and issued under
Section 20a of the Chicago Park District Act for aquarium and
museum projects; (ii) bonds issued under Section 15 of the
Local Government Debt Reform Act; or (iii) refunding
obligations issued to refund or to continue to refund
obligations initially issued pursuant to referendum.
"Special purpose extensions" include, but are not limited
to, extensions for levies made on an annual basis for
unemployment and workers' compensation, self-insurance,
contributions to pension plans, and extensions made pursuant to
Section 6-601 of the Illinois Highway Code for a road
district's permanent road fund whether levied annually or not.
The extension for a special service area is not included in the
aggregate extension.

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"Aggregate extension base" means the taxing district's
last preceding aggregate extension as adjusted under Sections
18-135, 18-215, 18-230, and 18-206. An adjustment under Section
18-135 shall be made for the 2007 levy year and all subsequent
levy years whenever one or more counties within which a taxing
district is located (i) used estimated valuations or rates when
extending taxes in the taxing district for the last preceding
levy year that resulted in the over or under extension of
taxes, or (ii) increased or decreased the tax extension for the
last preceding levy year as required by Section 18-135(c).
Whenever an adjustment is required under Section 18-135, the
aggregate extension base of the taxing district shall be equal
to the amount that the aggregate extension of the taxing
district would have been for the last preceding levy year if
either or both (i) actual, rather than estimated, valuations or
rates had been used to calculate the extension of taxes for the
last levy year, or (ii) the tax extension for the last
preceding levy year had not been adjusted as required by
subsection (c) of Section 18-135.
Notwithstanding any other provision of law, for levy year
2012, the aggregate extension base for West Northfield School
District No. 31 in Cook County shall be $12,654,592.
"Levy year" has the same meaning as "year" under Section
1-155.
"New property" means (i) the assessed value, after final
board of review or board of appeals action, of new improvements

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or additions to existing improvements on any parcel of real
property that increase the assessed value of that real property
during the levy year multiplied by the equalization factor
issued by the Department under Section 17-30, (ii) the assessed
value, after final board of review or board of appeals action,
of real property not exempt from real estate taxation, which
real property was exempt from real estate taxation for any
portion of the immediately preceding levy year, multiplied by
the equalization factor issued by the Department under Section
17-30, including the assessed value, upon final stabilization
of occupancy after new construction is complete, of any real
property located within the boundaries of an otherwise or
previously exempt military reservation that is intended for
residential use and owned by or leased to a private corporation
or other entity, (iii) in counties that classify in accordance
with Section 4 of Article IX of the Illinois Constitution, an
incentive property's additional assessed value resulting from
a scheduled increase in the level of assessment as applied to
the first year final board of review market value, and (iv) any
increase in assessed value due to oil or gas production from an
oil or gas well required to be permitted under the Hydraulic
Fracturing Regulatory Act that was not produced in or accounted
for during the previous levy year. In addition, the county
clerk in a county containing a population of 3,000,000 or more
shall include in the 1997 recovered tax increment value for any
school district, any recovered tax increment value that was

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applicable to the 1995 tax year calculations.
"Qualified airport authority" means an airport authority
organized under the Airport Authorities Act and located in a
county bordering on the State of Wisconsin and having a
population in excess of 200,000 and not greater than 500,000.
"Recovered tax increment value" means, except as otherwise
provided in this paragraph, the amount of the current year's
equalized assessed value, in the first year after a
municipality terminates the designation of an area as a
redevelopment project area previously established under the
Tax Increment Allocation Development Act in the Illinois
Municipal Code, previously established under the Industrial
Jobs Recovery Law in the Illinois Municipal Code, previously
established under the Economic Development Project Area Tax
Increment Act of 1995, or previously established under the
Economic Development Area Tax Increment Allocation Act, of each
taxable lot, block, tract, or parcel of real property in the
redevelopment project area over and above the initial equalized
assessed value of each property in the redevelopment project
area. For the taxes which are extended for the 1997 levy year,
the recovered tax increment value for a non-home rule taxing
district that first became subject to this Law for the 1995
levy year because a majority of its 1994 equalized assessed
value was in an affected county or counties shall be increased
if a municipality terminated the designation of an area in 1993
as a redevelopment project area previously established under

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the Tax Increment Allocation Development Act in the Illinois
Municipal Code, previously established under the Industrial
Jobs Recovery Law in the Illinois Municipal Code, or previously
established under the Economic Development Area Tax Increment
Allocation Act, by an amount equal to the 1994 equalized
assessed value of each taxable lot, block, tract, or parcel of
real property in the redevelopment project area over and above
the initial equalized assessed value of each property in the
redevelopment project area. In the first year after a
municipality removes a taxable lot, block, tract, or parcel of
real property from a redevelopment project area established
under the Tax Increment Allocation Development Act in the
Illinois Municipal Code, the Industrial Jobs Recovery Law in
the Illinois Municipal Code, or the Economic Development Area
Tax Increment Allocation Act, "recovered tax increment value"
means the amount of the current year's equalized assessed value
of each taxable lot, block, tract, or parcel of real property
removed from the redevelopment project area over and above the
initial equalized assessed value of that real property before
removal from the redevelopment project area.
Except as otherwise provided in this Section, "limiting
rate" means a fraction the numerator of which is the last
preceding aggregate extension base times an amount equal to one
plus the extension limitation defined in this Section and the
denominator of which is the current year's equalized assessed
value of all real property in the territory under the

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jurisdiction of the taxing district during the prior levy year.
For those taxing districts that reduced their aggregate
extension for the last preceding levy year, except for school
districts that reduced their extension for educational
purposes pursuant to Section 18-206, the highest aggregate
extension in any of the last 3 preceding levy years shall be
used for the purpose of computing the limiting rate. The
denominator shall not include new property or the recovered tax
increment value. If a new rate, a rate decrease, or a limiting
rate increase has been approved at an election held after March
21, 2006, then (i) the otherwise applicable limiting rate shall
be increased by the amount of the new rate or shall be reduced
by the amount of the rate decrease, as the case may be, or (ii)
in the case of a limiting rate increase, the limiting rate
shall be equal to the rate set forth in the proposition
approved by the voters for each of the years specified in the
proposition, after which the limiting rate of the taxing
district shall be calculated as otherwise provided. In the case
of a taxing district that obtained referendum approval for an
increased limiting rate on March 20, 2012, the limiting rate
for tax year 2012 shall be the rate that generates the
approximate total amount of taxes extendable for that tax year,
as set forth in the proposition approved by the voters; this
rate shall be the final rate applied by the county clerk for
the aggregate of all capped funds of the district for tax year
2012.

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(Source: P.A. 99-143, eff. 7-27-15; 99-521, eff. 6-1-17;
100-465, eff. 8-31-17.)
Section 10. The Illinois Pension Code is amended by
changing Sections 3-101, 3-106, 4-101, 4-106, and 7-109 and by
adding Sections 3-101.1, 3-101.2, 4-101.1, 4-101.2, 7-199.5,
and 7-199.6 as follows:
(40 ILCS 5/3-101) (from Ch. 108 1/2, par. 3-101)
Sec. 3-101. Creation and consolidation of the funds fund.
(a) Until January 1, 2020, in In each municipality, as
defined in Section 3-103, the city council or the board of
trustees, as the case may be, shall establish and administer a
police pension fund, as prescribed in this Article, for the
benefit of its police officers and of their surviving spouses,
children, and certain other dependents. The duty of the
corporate authorities of a municipality to establish and
administer a police pension fund shall be suspended during any
period during which the fund is dissolved under Section 3-144.6
of this Code.
(b) On January 1, 2020, all of the individual police
pension funds then existing under this Article are merged and
consolidated into the Illinois Municipal Retirement Fund,
which shall be administered as prescribed in this Article and
Article 7.
(c) Beginning January 1, 2020, each municipality, as

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defined in Section 3-103, shall participate in the Illinois
Municipal Retirement Fund for the benefit of its police
officers and of their surviving spouses, children, and certain
other dependents.
(d) It is the purpose of this consolidation to provide the
advantages of (i) centralized custody and investment of pension
fund assets, (ii) consistent interpretation and application of
this Article in accordance with a single set of rules and
procedures adopted by the Illinois Municipal Retirement Fund,
and (iii) securing the future funding of pension benefits
through an independent determination of each municipality's
required annual contribution rate.
(Source: P.A. 97-99, eff. 1-1-12.)
(40 ILCS 5/3-101.1 new)
Sec. 3-101.1. Transition Board.
(a) There is hereby created a Downstate Police Pension Fund
Transition Board, which may be referred to as the "Transition
Board". The Transition Board shall consist of 11 members as
follows:
(1) The Director of the Illinois Department of
Insurance, or his or her designee.
(2) Two persons with experience in managing or
administering an Illinois public employee pension fund or
retirement system, appointed by the Governor.
(3) One person with experience in providing actuarial

SB3426 - 21 - LRB100 20446 MJP 35795 b
services to an Illinois public employee pension fund or
retirement system, appointed by the Governor.
(4) One person with experience in auditing Illinois
public employee pension funds or retirement systems,
appointed by the Auditor General.
(5) Two members of the labor organization representing
the largest number of police officers participating in
Article 3 pension funds, with one member being an active
participant and the other being a retired participant,
appointed by the Governor from recommendations of the
President of that organization.
(6) Two persons who are mayors or chief elected
officers of municipalities that maintain an Article 3
pension fund, appointed by the Governor from
recommendations of the Executive Director of the
organization representing the largest number of
municipalities in the State.
(7) One person familiar with the operation and
administration of the Illinois Municipal Retirement Fund,
appointed by the Executive Director of that Fund.
(8) One person familiar with the investment authority
and practices of the Illinois State Board of Investment,
appointed by the Executive Director of the Illinois State
Board of Investment.
All such appointments and designations shall be made by
filing a written notice thereof with the Secretary of State no

SB3426 - 22 - LRB100 20446 MJP 35795 b
later than 30 days after the effective date of this amendatory
Act of the 100th General Assembly.
(b) The Transition Board shall be responsible for planning,
overseeing, and administering the consolidation and merger of
all existing Article 3 pension funds into the Illinois
Municipal Retirement Fund.
Members of the Transition Board shall act at all times in a
manner appropriate for fiduciaries of the Fund and fiduciaries
of the pension funds being consolidated.
The Transition Board's powers and duties include, but are
not limited to, the following:
(1) Providing for the preservation and consolidation
of membership, beneficiary, financial, and other records
relating to the Article 3 pension funds to be merged.
(2) Obtaining all necessary Internal Revenue Service
and any other necessary approval or review.
(3) Providing for the final auditing of existing
Article 3 pension funds, including a final accounting of
their respective assets and liabilities, paid for by the
applicable pension fund.
(4) Providing for the custody and transfer of the
assets and liabilities of the existing Article 3 pension
funds to the Illinois Municipal Retirement Fund, on a
schedule to be determined by the Transition Board.
(5) Recommending to the Illinois Municipal Retirement
Fund an appropriate system of accounting for the assets and

SB3426 - 23 - LRB100 20446 MJP 35795 b
liabilities attributable to the existing Article 3 pension
funds and for establishing separate reserves and accounts
for each municipality participating in the Fund with
respect to its police officers.
(6) Recommending to the Illinois Municipal Retirement
Fund an appropriate system of determining, administering,
receiving, and enforcing the required municipal
contributions to the Fund. The municipal contribution rate
shall be determined separately for each municipality on an
annual basis in accordance with the requirements of this
Article, based on the municipality's separate reserves and
accounts within the Illinois Municipal Retirement Fund.
The Transition Board shall endeavor to determine the
required municipal contributions to the Illinois Municipal
Retirement Fund with regard to the municipality's police
officers under this Article and to notify and provide
reasonable guidance to municipalities in a manner that
ensures uninterrupted contributions during the transition
period.
(7) Ensuring the uninterrupted payment and
administration of benefits.
(8) Adopting any rules or procedures necessary for the
efficient consolidation of the existing Article 3 pension
funds.
(9) Considering the consequences of the consolidation
on any QILDROs filed with the pension funds being

SB3426 - 24 - LRB100 20446 MJP 35795 b
consolidated and giving appropriate notice and advice to
persons who may be affected by those QILDROs concerning the
possible effects of consolidation.
(10) Making recommendations to the Governor and the
General Assembly with respect to legislation necessary or
useful for the implementation of this consolidation or for
the successful administration of the Illinois Municipal
Retirement Fund with respect to police officers under this
Article.
(11) Consulting with the Illinois Municipal Retirement
Fund about the Illinois Municipal Retirement Fund's
policies, practices, rules, and structure.
(c) The Public Pension Division of the Department of
Insurance shall provide all reasonably necessary and available
temporary office space, technical and clerical support, and
monetary or other assistance at the request of the Transition
Board.
For the purpose of implementing the consolidation, the
Transition Board may direct the Public Pension Division to
accelerate, expand, or enhance its examination under Section
1A-104 of all or specific Article 3 pension funds, or to
conduct a particular study or investigation thereof. The
expenses of such examinations and investigations, to the extent
not paid by the Division, shall be charged to the applicable
pension fund.
(d) In preparation for the consolidation of the pension

SB3426 - 25 - LRB100 20446 MJP 35795 b
funds into the Illinois Municipal Retirement Fund on January 1,
2020, the Transition Board is authorized to expend or obligate
the assets of the Illinois Municipal Retirement Fund for any of
the reasonable expenses of consolidating the pension funds into
the Illinois Municipal Retirement Fund, including the payment
of benefits during the consolidation period and reasonable
administrative expenses. As used in this Section, "reasonable
administrative expenses" includes, but is not limited to, the
cost of hiring personnel and obtaining professional services to
the extent necessary for the consolidation, the cost of
insurance, and the cost of indemnifying members of the
Transition Board and its employees, advisors, and agents.
(e) Members of the Transition Board, other than State
officials and employees, may be compensated for their service,
and all members may be reimbursed for their reasonable expenses
out of any moneys available for that purpose.
(f) Sixty days after the Board of Trustees of the Illinois
Municipal Retirement Fund assumes its duties, the Transition
Board is abolished.
(40 ILCS 5/3-101.2 new)
Sec. 3-101.2. Consolidation of pension funds into the
Illinois Municipal Retirement Fund.
(a) On January 1, 2020, all of the individual police
pension funds then existing under this Article are merged and
consolidated into the Illinois Municipal Retirement Fund,

SB3426 - 26 - LRB100 20446 MJP 35795 b
which shall be administered as prescribed in this Article and
Article 7.
In preparation for that consolidation, all pension funds
established under this Article, and the municipalities that
established them, shall cooperate with the Transition Board.
(b) The Illinois Municipal Retirement Fund shall be the
legal successor to each of the pension funds that are
consolidated within it, and it may exercise any of the rights
and powers and perform any of the duties of those pension
funds.
At the time of consolidation, or as otherwise directed by
the Transition Board, all assets and liabilities belonging to
or arising from the trust of an existing pension fund shall
become the assets and liabilities of the Illinois Municipal
Retirement Fund.
As and when directed by the Transition Board, the trustees
of the pension funds established under Article 3 of this Code
shall transfer to the Illinois Municipal Retirement Fund, for
management and investment as assets of the Illinois Municipal
Retirement Fund, all of their securities and other investments
not needed for immediate use.
(c) At the time of consolidation or as otherwise directed
by the Transition Board, assets not belonging to or arising
from the trust that are incidentally owned by a pension fund,
and any incidental liabilities of a pension fund not relating
to or arising from the trust, shall become the assets and

SB3426 - 27 - LRB100 20446 MJP 35795 b
liabilities of the municipality.
Assets not belonging to or arising from the trust that are
owned by a municipality and incidentally used by a pension
fund, and any associated liabilities, are not affected by the
consolidation and shall continue to be managed as assets and
liabilities of that municipality.
As necessary or useful to effectuate the consolidation, the
board of trustees of a pension fund to be consolidated and the
applicable municipality may each, in its discretion, continue
or renegotiate any employment or service contract, lease, or
other contract to which it is a party that relates to the
operation of the consolidated pension fund, and it may take
appropriate action to terminate any such contract as necessary
to terminate or avoid unnecessary or duplicative personnel,
facilities, or services.
(d) Beginning on January 1, 2020, all benefits payable
under this Article shall be payable from the appropriate
accounts and reserves of the Illinois Municipal Retirement
Fund.
(e) The consolidation of pension funds under this Article
shall not diminish or impair the benefits of any current or
former police officer who participated in one of those pension
funds, or of any such police officer's surviving spouse,
children, or other dependents.
The consolidation of pension funds under this Article shall
not change the police officer contribution rate.

SB3426 - 28 - LRB100 20446 MJP 35795 b
The consolidation of pension funds under this Article does
not entitle any person to a recalculation or combination of any
benefit or benefits previously granted or to a refund of any
contribution previously paid.
The consolidation of pension funds under this Article is
not intended to increase the benefits provided under this
Article, except insofar as the consolidation of pension funds
into the Illinois Municipal Retirement Fund will allow police
officers in active service on or after the consolidation date
to have their benefit calculations (and those of their
qualifying survivors) include consideration of all of the
police officer's service, salary, and credits in the Fund as
though arising under the Fund, rather than as arising under
more than one participating municipality or more than one
Article 3 pension fund.
(f) On January 1, 2020, the rules adopted by the Transition
Board shall become the rules of the Illinois Municipal
Retirement Fund with respect to this Article.
(40 ILCS 5/3-106) (from Ch. 108 1/2, par. 3-106)
Sec. 3-106. Police officer, officer. "Police officer" or
"officer": Any person who (1) is first appointed before January
1, 2020 to the police force of a police department and sworn
and commissioned to perform police duties; and (2) within 3
months after receiving his or her first appointment and, if
reappointed, within 3 months thereafter, or as otherwise

SB3426 - 29 - LRB100 20446 MJP 35795 b
provided in Section 3-109, makes written application to the
board to come under the provisions of this Article.
Police officers serving initial probationary periods, if
otherwise eligible, shall be police officers within the meaning
of this Section.
(Source: P.A. 89-52, eff. 6-30-95.)
(40 ILCS 5/4-101) (from Ch. 108 1/2, par. 4-101)
Sec. 4-101. Creation and consolidation of the funds fund.
(a) Until January 1, 2020, in In each municipality as
defined in Section 4-103, the city council or the board of
trustees, as the case may be, shall establish and administer a
firefighters' pension fund as prescribed in this Article, for
the benefit of its firefighters and of their surviving spouses,
children and certain other dependents. The duty of the
corporate authorities of a municipality to establish and
administer a firefighters' pension fund shall be suspended
during any period during which the fund is dissolved under
subsection (c) of Section 4-106.1 of this Code.
(b) On January 1, 2020, all of the individual firefighter
pension funds then existing under this Article are merged and
consolidated into the Illinois Municipal Retirement Fund,
which shall be administered as prescribed in this Article and
Article 7.
(c) Beginning January 1, 2020, each municipality, as
defined in Section 4-103, shall participate in the Illinois

SB3426 - 30 - LRB100 20446 MJP 35795 b
Municipal Retirement Fund for the benefit of its firefighters
and of their surviving spouses, children, and certain other
dependents.
(d) It is the purpose of this consolidation to provide the
advantages of (i) centralized custody and investment of pension
fund assets, (ii) consistent interpretation and application of
this Article in accordance with a single set of rules and
procedures adopted by the Illinois Municipal Retirement Fund,
and (iii) securing the future funding of pension benefits
through an independent determination of each municipality's
required annual contribution rate.
(Source: P.A. 97-99, eff. 1-1-12.)
(40 ILCS 5/4-101.1 new)
Sec. 4-101.1. Transition Board.
(a) There is hereby created a Downstate Firefighter Pension
Fund Transition Board, which may be referred to as the
"Transition Board". The Transition Board shall consist of 11
members as follows:
(1) The Director of the Illinois Department of
Insurance, or his or her designee.
(2) Two persons with experience in managing or
administering an Illinois public employee pension fund or
retirement system, appointed by the Governor.
(3) One person with experience in providing actuarial
services to an Illinois public employee pension fund or

SB3426 - 31 - LRB100 20446 MJP 35795 b
retirement system, appointed by the Governor.
(4) One person with experience in auditing Illinois
public employee pension funds or retirement systems,
appointed by the Auditor General.
(5) Two members of the labor organization representing
the largest number of firefighters participating in
Article 4 pension funds, with one member being an active
participant and the other being a retired participant,
appointed by the Governor from recommendations of the
President of that organization.
(6) Two persons who are mayors or chief elected
officers of municipalities that maintain an Article 4
pension fund, appointed by the Governor from
recommendations of the Executive Director of the
organization representing the largest number of
municipalities in the State.
(7) One person familiar with the operation and
administration of the Illinois Municipal Retirement Fund,
appointed by the Executive Director of that Fund.
(8) One person familiar with the investment authority
and practices of the Illinois State Board of Investment,
appointed by the Executive Director of the Illinois State
Board of Investment.
All such appointments and designations shall be made by
filing a written notice thereof with the Secretary of State no
later than 30 days after the effective date of this amendatory

SB3426 - 32 - LRB100 20446 MJP 35795 b
Act of the 100th General Assembly.
(b) The Transition Board shall be responsible for planning,
overseeing, and administering the consolidation and merger of
all existing Article 4 pension funds into the Illinois
Municipal Retirement Fund.
Members of the Transition Board shall act at all times in a
manner appropriate for fiduciaries of the Fund and fiduciaries
of the pension funds being consolidated.
The Transition Board's powers and duties include, but are
not limited to, the following:
(1) Providing for the preservation and consolidation
of membership, beneficiary, financial, and other records
relating to the Article 4 pension funds to be merged.
(2) Obtaining all necessary Internal Revenue Service
and any other necessary approval or review.
(3) Providing for the final auditing of existing
Article 4 pension funds, including a final accounting of
their respective assets and liabilities, paid for by the
applicable pension fund.
(4) Providing for the custody and transfer of the
assets and liabilities of the existing Article 4 pension
funds to the Illinois Municipal Retirement Fund, on a
schedule to be determined by the Transition Board.
(5) Recommending to the Illinois Municipal Retirement
Fund an appropriate system of accounting for the assets and
liabilities attributable to the existing Article 4 pension

SB3426 - 33 - LRB100 20446 MJP 35795 b
funds and for establishing separate reserves and accounts
for each municipality participating in the Fund with
respect to its firefighters.
(6) Recommending to the Illinois Municipal Retirement
Fund an appropriate system of determining, administering,
receiving, and enforcing the required municipal
contributions to the Fund. The municipal contribution rate
shall be determined separately for each municipality on an
annual basis in accordance with the requirements of this
Article, based on the municipality's separate reserves and
accounts within the Illinois Municipal Retirement Fund.
The Transition Board shall endeavor to determine the
required municipal contributions to the Illinois Municipal
Retirement Fund with regard to the municipality's
firefighters under this Article and to notify and provide
reasonable guidance to municipalities in a manner that
ensures uninterrupted contributions during the transition
period.
(7) Ensuring the uninterrupted payment and
administration of benefits.
(8) Adopting any rules or procedures necessary for the
efficient consolidation of the existing Article 4 pension
funds.
(9) Considering the consequences of the consolidation
on any QILDROs filed with the pension funds being
consolidated and giving appropriate notice and advice to

SB3426 - 34 - LRB100 20446 MJP 35795 b
persons who may be affected by those QILDROs concerning the
possible effects of consolidation.
(10) Making recommendations to the Governor and the
General Assembly with respect to legislation necessary or
useful for the implementation of this consolidation or for
the successful administration of the Illinois Municipal
Retirement Fund with respect to firefighters under this
Article.
(11) Consulting with the Illinois Municipal Retirement
Fund about the Illinois Municipal Retirement Fund's
policies, practices, rules, and structure.
(c) The Public Pension Division of the Department of
Insurance shall provide all reasonably necessary and available
temporary office space, technical and clerical support, and
monetary or other assistance at the request of the Transition
Board.
For the purpose of implementing the consolidation, the
Transition Board may direct the Public Pension Division to
accelerate, expand, or enhance its examination under Section
1A-104 of all or specific Article 4 pension funds, or to
conduct a particular study or investigation thereof. The
expenses of such examinations and investigations, to the extent
not paid by the Division, shall be charged to the applicable
pension fund.
(d) In preparation for the consolidation of the pension
funds into the Illinois Municipal Retirement Fund on January 1,

SB3426 - 35 - LRB100 20446 MJP 35795 b
2020, the Transition Board is authorized to expend or obligate
the assets of the Illinois Municipal Retirement Fund for any of
the reasonable expenses of consolidating the pension funds into
the Illinois Municipal Retirement Fund, including the payment
of benefits during the consolidation period and reasonable
administrative expenses. As used in this Section, "reasonable
administrative expenses" includes, but is not limited to, the
cost of hiring personnel and obtaining professional services to
the extent necessary for the consolidation, the cost of
insurance, and the cost of indemnifying members of the
Transition Board and its employees, advisors, and agents.
(e) Members of the Transition Board, other than State
officials and employees, may be compensated for their service,
and all members may be reimbursed for their reasonable expenses
out of any moneys available for that purpose.
(f) Sixty days after the Board of Trustees of the Illinois
Municipal Retirement Fund assumes its duties, the Transition
Board is abolished.
(40 ILCS 5/4-101.2 new)
Sec. 4-101.2. Consolidation of pension funds into the
Illinois Municipal Retirement Fund.
(a) On January 1, 2020, all of the individual firefighter
pension funds then existing under this Article are merged and
consolidated into the Illinois Municipal Retirement Fund,
which shall be administered as prescribed in this Article and

SB3426 - 36 - LRB100 20446 MJP 35795 b
Article 7.
In preparation for that consolidation, all pension funds
established under this Article, and the municipalities that
established them, shall cooperate with the Transition Board.
(b) The Illinois Municipal Retirement Fund shall be the
legal successor to each of the pension funds that are
consolidated within it, and it may exercise any of the rights
and powers and perform any of the duties of those pension
funds.
At the time of consolidation, or as otherwise directed by
the Transition Board, all assets and liabilities belonging to
or arising from the trust of an existing pension fund shall
become the assets and liabilities of the Illinois Municipal
Retirement Fund.
As and when directed by the Transition Board, the trustees
of the pension funds established under Article 4 of this Code
shall transfer to the Illinois Municipal Retirement Fund, for
management and investment as assets of the Illinois Municipal
Retirement Fund, all of their securities and other investments
not needed for immediate use.
(c) At the time of consolidation or as otherwise directed
by the Transition Board, assets not belonging to or arising
from the trust that are incidentally owned by a pension fund,
and any incidental liabilities of a pension fund not relating
to or arising from the trust, shall become the assets and
liabilities of the municipality.

SB3426 - 37 - LRB100 20446 MJP 35795 b
Assets not belonging to or arising from the trust that are
owned by a municipality and incidentally used by a pension
fund, and any associated liabilities, are not affected by the
consolidation and shall continue to be managed as assets and
liabilities of that municipality.
As necessary or useful to effectuate the consolidation, the
board of trustees of a pension fund to be consolidated and the
applicable municipality may each, in its discretion, continue
or renegotiate any employment or service contract, lease, or
other contract to which it is a party that relates to the
operation of the consolidated pension fund, and it may take
appropriate action to terminate any such contract as necessary
to terminate or avoid unnecessary or duplicative personnel,
facilities, or services.
(d) Beginning on January 1, 2020, all benefits payable
under this Article shall be payable from the appropriate
accounts and reserves of the Illinois Municipal Retirement
Fund.
(e) The consolidation of pension funds under this Article
shall not diminish or impair the benefits of any current or
former firefighter who participated in one of those pension
funds, or of any such firefighter's surviving spouse, children,
or other dependents.
The consolidation of pension funds under this Article shall
not change the firefighter contribution rate, except that no
additional contribution shall be paid under subsection (c) of

SB3426 - 38 - LRB100 20446 MJP 35795 b
Section 4-118.1.
The consolidation of pension funds under this Article does
not entitle any person to a recalculation or combination of any
benefit or benefits previously granted or to a refund of any
contribution previously paid.
The consolidation of pension funds under this Article is
not intended to increase the benefits provided under this
Article, except insofar as the consolidation of pension funds
into the Illinois Municipal Retirement Fund will allow
firefighters in active service on or after the consolidation
date to have their benefit calculations (and those of their
qualifying survivors) include consideration of all of the
firefighter's service, salary, and credits in the Fund as
though arising under the Fund, rather than as arising under
more than one participating municipality or more than one
Article 4 pension fund.
(f) On January 1, 2020, the rules adopted by the Transition
Board shall become the rules of the Illinois Municipal
Retirement Fund with respect to this Article.
(40 ILCS 5/4-106) (from Ch. 108 1/2, par. 4-106)
Sec. 4-106. Firefighter, firefighters. "Firefighter,
firefighters":
(a) In municipalities which have adopted Division 1 of
Article 10 of the Illinois Municipal Code, any person first
employed before January 1, 2020 in the municipality's fire

SB3426 - 39 - LRB100 20446 MJP 35795 b
service as a firefighter, fire engineer, marine engineer, fire
pilot, bomb technician or scuba diver; and in any of these
positions where such person's duties also include those of a
firefighter as classified by the Civil Service Commission of
that city, and whose duty is to participate in the work of
controlling and extinguishing fires at the location of any such
fires.
(b) In municipalities which are subject to Division 2.1 of
Article 10 of the Illinois Municipal Code, any person first
employed before January 1, 2020 by a city in its fire service
as a firefighter, fire engineer, marine engineer, fire pilot,
bomb technician, or scuba diver; and, in any of these positions
whose duties also include those of a firefighter and are
certified in the same manner as a firefighter in that city.
(c) In municipalities which are subject to neither Division
1 nor Division 2.1 of Article 10 of the Illinois Municipal
Code, any person who would have been included as a firefighter
under sub-paragraph (a) or (b) above except that he served as a
de facto and not as a de jure firefighter.
(d) Notwithstanding the other provisions of this Section,
"firefighter" does not include any person who is actively
participating in the State Universities Retirement System
under subsection (h) of Section 15-107 with respect to the
employment for which he or she is a participating employee in
that System.
(e) This amendatory Act of 1977 does not affect persons

SB3426 - 40 - LRB100 20446 MJP 35795 b
covered by this Article prior to September 22, 1977.
(Source: P.A. 90-576, eff. 3-31-98.)
(40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
Sec. 7-109. Employee.
(1) "Employee" means any person who:
(a) 1. Receives earnings as payment for the performance
of personal services or official duties out of the general
fund of a municipality, or out of any special fund or funds
controlled by a municipality, or by an instrumentality
thereof, or a participating instrumentality, including, in
counties, the fees or earnings of any county fee office;
and
2. Under the usual common law rules applicable in
determining the employer-employee relationship, has the
status of an employee with a municipality, or any
instrumentality thereof, or a participating
instrumentality, including aldermen, county supervisors
and other persons (excepting those employed as independent
contractors) who are paid compensation, fees, allowances
or other emolument for official duties, and, in counties,
the several county fee offices.
(b) Serves as a township treasurer appointed under the
School Code, as heretofore or hereafter amended, and who
receives for such services regular compensation as
distinguished from per diem compensation, and any regular

SB3426 - 41 - LRB100 20446 MJP 35795 b
employee in the office of any township treasurer whether or
not his earnings are paid from the income of the permanent
township fund or from funds subject to distribution to the
several school districts and parts of school districts as
provided in the School Code, or from both such sources; or
is the chief executive officer, chief educational officer,
chief fiscal officer, or other employee of a Financial
Oversight Panel established pursuant to Article 1H of the
School Code, other than a superintendent or certified
school business official, except that such person shall not
be treated as an employee under this Section if that person
has negotiated with the Financial Oversight Panel, in
conjunction with the school district, a contractual
agreement for exclusion from this Section.
(c) Holds an elective office in a municipality,
instrumentality thereof or participating instrumentality.
(d) Is first appointed on or after January 1, 2020 to
the police force of a police department in a municipality,
as defined in Section 3-103, and sworn and commissioned to
perform police duties.
(e) Is in a municipality, as defined in Section 4-103,
that has adopted Division 1 of Article 10 of the Illinois
Municipal Code and is first employed on or after January 1,
2020 in the municipality's fire service as a firefighter,
fire engineer, marine engineer, fire pilot, bomb
technician, or scuba diver; and in any of these positions

SB3426 - 42 - LRB100 20446 MJP 35795 b
where such person's duties also include those of a
firefighter as classified by the Civil Service Commission
of that city, and whose duty is to participate in the work
of controlling and extinguishing fires at the location of
any such fires.
(f) Is in a municipality, as defined in Section 4-103,
that is subject to Division 2.1 of Article 10 of the
Illinois Municipal Code and is first employed on or after
January 1, 2020 by a city in its fire service as a
firefighter, fire engineer, marine engineer, fire pilot,
bomb technician, or scuba diver; and, in any of these
positions whose duties also include those of a firefighter
and are certified in the same manner as a firefighter in
that city.
(g) Is first employed on or after January 1, 2020 in a
municipality, as defined in Section 4-103, that is subject
to neither Division 1 nor Division 2.1 of Article 10 of the
Illinois Municipal Code and would have been included as an
employee under items (e) or (f) except that he or she
served as a de facto and not as a de jure firefighter.
(2) "Employee" does not include persons who:
(a) Are eligible for inclusion under any of the
following laws:
1. "An Act in relation to an Illinois State
Teachers' Pension and Retirement Fund", approved May
27, 1915, as amended;

SB3426 - 43 - LRB100 20446 MJP 35795 b
2. Articles 15 and 16 of this Code.
However, such persons shall be included as employees to
the extent of earnings that are not eligible for inclusion
under the foregoing laws for services not of an
instructional nature of any kind.
However, any member of the armed forces who is employed
as a teacher of subjects in the Reserve Officers Training
Corps of any school and who is not certified under the law
governing the certification of teachers shall be included
as an employee.
(b) Are designated before January 1, 2020 by the
governing body of a municipality in which a pension fund is
required by law to be established for policemen or firemen,
respectively, as performing police or fire protection
duties, except that when such persons are the heads of the
police or fire department and are not eligible to be
included within any such pension fund, they shall be
included within this Article; provided, that such persons
shall not be excluded to the extent of concurrent service
and earnings not designated as being for police or fire
protection duties. However, (i) any head of a police
department who was a participant under this Article
immediately before October 1, 1977 and did not elect, under
Section 3-109 of this Act, to participate in a police
pension fund shall be an "employee", and (ii) any chief of
police who became a participating employee under this

SB3426 - 44 - LRB100 20446 MJP 35795 b
Article before January 1, 2019 and who elects to
participate in this Fund under Section 3-109.1 of this
Code, regardless of whether such person continues to be
employed as chief of police or is employed in some other
rank or capacity within the police department, shall be an
employee under this Article for so long as such person is
employed to perform police duties by a participating
municipality and has not lawfully rescinded that election.
(c) Are contributors to or eligible to contribute to a
Taft-Hartley pension plan to which the participating
municipality is required to contribute as the person's
employer based on earnings from the municipality. Nothing
in this paragraph shall affect service credit or creditable
service for any period of service prior to the effective
date of this amendatory Act of the 98th General Assembly,
and this paragraph shall not apply to individuals who are
participating in the Fund prior to the effective date of
this amendatory Act of the 98th General Assembly.
(d) Become an employee of any of the following
participating instrumentalities on or after the effective
date of this amendatory Act of the 99th General Assembly:
the Illinois Municipal League; the Illinois Association of
Park Districts; the Illinois Supervisors, County
Commissioners and Superintendents of Highways Association;
an association, or not-for-profit corporation, membership
in which is authorized under Section 85-15 of the Township

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Code; the United Counties Council; or the Will County
Governmental League.
(3) All persons, including, without limitation, public
defenders and probation officers, who receive earnings from
general or special funds of a county for performance of
personal services or official duties within the territorial
limits of the county, are employees of the county (unless
excluded by subsection (2) of this Section) notwithstanding
that they may be appointed by and are subject to the direction
of a person or persons other than a county board or a county
officer. It is hereby established that an employer-employee
relationship under the usual common law rules exists between
such employees and the county paying their salaries by reason
of the fact that the county boards fix their rates of
compensation, appropriate funds for payment of their earnings
and otherwise exercise control over them. This finding and this
amendatory Act shall apply to all such employees from the date
of appointment whether such date is prior to or after the
effective date of this amendatory Act and is intended to
clarify existing law pertaining to their status as
participating employees in the Fund.
(Source: P.A. 99-830, eff. 1-1-17; 100-281, eff. 8-24-17.)
(40 ILCS 5/7-199.5 new)
Sec. 7-199.5. To assist in the consolidation of the pension
funds under Articles 3 and 4. The Board shall assist in the

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consolidation of pension funds under Articles 3 and 4 and shall
provide assistance to the Transition Boards created under
Sections 3-101.1 and 4-101.1 of this Code. The Board shall
adopt any rules necessary to prepare for the consolidation of
the pension funds under Articles 3 and 4, including
establishing accounts and reserves necessary for the
administration of the benefits and requirements under Articles
3 and 4, and to provide recommendations and administrative
support necessary to the Transition Boards.
(40 ILCS 5/7-199.6 new)
Sec. 7-199.6. To administer the benefits under Articles 3
and 4.
(a) On and after January 1, 2020, the Fund shall administer
the benefits and other requirements under Article 3 in
accordance with that Article and this Article 7. To the extent
that the administrative requirements under Article 3 conflict
with this Article 7, this Article 7 shall control. The Fund may
exercise any of the rights and powers and perform any of the
duties of the consolidated pension funds under Article 3.
The Fund shall adopt rules for the efficient operation and
administration of Article 3. Any rules adopted by the
Transition Board established under Section 3-101.1 shall
become the rules of the Illinois Municipal Retirement Fund with
respect to the benefits and administration of Article 3 until
the Illinois Municipal Retirement Fund rescinds those rules or

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adopts superseding rules.
(b) On and after January 1, 2020, the Fund shall administer
the benefits and other requirements under Article 4 in
accordance with that Article and this Article 7. To the extent
that the administrative requirements under Article 4 conflict
with this Article 7, this Article 7 shall control. The Fund may
exercise any of the rights and powers and perform any of the
duties of the consolidated pension funds under Article 4
The Fund shall adopt rules for the efficient operation and
administration of Article 4. Any rules adopted by the
Transition Board established under Section 4-101.1 shall
become the rules of the Illinois Municipal Retirement Fund with
respect to the benefits and administration of Article 4 until
the Illinois Municipal Retirement Fund rescinds those rules or
adopts superseding rules.
Section 15. The Illinois Pension Code is amended by
changing Sections 3-103, 3-105, 3-108.2, 3-108.3, 3-110,
3-110.7, 3-125, 3-125.1, 3-128, 3-134, 3-135, 3-141, 4-103,
4-105, 4-105c, 4-105d, 4-108, 4-118, 4-118.1, 4-121, 4-124,
4-128, 4-134, 7-175, and 7-175.1 and by adding Sections
3-102.1, 3-103.9, 3-141a, 3-141b, 4-102.1, 4-106.5, 4-130.1,
and 4-130.3 as follows:
(40 ILCS 5/3-102.1 new)
Sec. 3-102.1. Fund. "Fund" or "pension fund": Until January

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1, 2020, a police pension fund established by a municipality
under this Article.
Beginning January 1, 2020, "Fund" or "pension fund" means
the Illinois Municipal Retirement Fund with respect to this
Article; depending on the context, the terms may include one or
more of those previously established pension funds.
(40 ILCS 5/3-103) (from Ch. 108 1/2, par. 3-103)
Sec. 3-103. Municipality; participating municipality;
governing body.
(a) "Municipality": (1) Any city, village or incorporated
town of 5,000 or more but less than 500,000 inhabitants, as
determined from the United States Government statistics or a
census taken at any time by the city, village or incorporated
town and (2) any city, village or incorporated town of less
than 5,000 inhabitants which, by referendum held under Section
3-145 adopts this Article.
(b) "Participating municipality" means a municipality, as
defined in subsection (a), that both is required (or has
elected) to and does in fact participate in the Fund with
respect to its police officers under this Article.
(c) "Governing body" includes, but is not limited to, the
board of town trustees or other persons empowered to draft the
tentative budget and appropriation ordinance and the electors
of such a township acting at the annual or special meeting of
town electors.

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(Source: P.A. 83-1440.)
(40 ILCS 5/3-103.9 new)
Sec. 3-103.9. Authorized agent of a participating
municipality.
(a) Each participating municipality shall appoint an
authorized agent who shall have the powers and duties set forth
in this Section. In the absence of such an appointment, the
duties of the authorized agent shall devolve upon the clerk or
secretary of the municipality. The authorized agent may be the
same person appointed as the authorized agent under Section
7-135.
(b) The authorized agent of the municipality shall have the
following powers and duties:
(1) To certify to the Fund whether or not a given
person is authorized to participate in the Fund.
(2) To certify to the Fund when a participating
employee is on a leave of absence authorized by the
municipality.
(3) To request the proper officer to cause employee
contributions to be withheld from salary and promptly
transmitted to the Fund.
(4) To request the proper officer to cause municipality
contributions to be promptly forwarded to the Fund.
(5) To forward promptly to all participating employees
any communications for such employees from the Fund or the

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municipality.
(6) To forward promptly to the Board of the Fund all
applications, claims reports, and other communications
delivered to the agent by participating employees.
(7) To perform all duties related to the administration
of the Fund as requested by the Fund or the governing body
of the municipality.
(c) The governing body of each participating municipality
may delegate either or both of the following powers to its
authorized agent:
(1) To file a petition for nomination of an executive
trustee of the Fund.
(2) To cast the ballot for election of an executive
trustee of the Fund.
If a governing body does not authorize its agent to perform
the powers set forth in this Section, they shall be performed
by the governing body itself, unless the governing body by
resolution duly certified to the Fund delegates them to some
other officer or employee.
(d) The delivery of any communication or document by an
employee or a municipality to the authorized agent of the
municipality does not constitute delivery to the Fund.
(40 ILCS 5/3-105) (from Ch. 108 1/2, par. 3-105)
Sec. 3-105. Board. "Board": Until January 1, 2020, the The
board of trustees of the police pension fund of a municipality

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as established in subsection (a) of Section 3-128.
Beginning January 1, 2020, the Board of Trustees of the
Illinois Municipal Retirement Fund; depending on the context,
the term may include the former board of trustees of one or
more of those previously established pension funds.
(Source: P.A. 83-1440.)
(40 ILCS 5/3-108.2)
Sec. 3-108.2. Participant. "Participant": A police officer
or deferred pensioner of the Fund a pension fund, or a
beneficiary of the Fund pension fund.
(Source: P.A. 90-507, eff. 8-22-97.)
(40 ILCS 5/3-108.3)
Sec. 3-108.3. Beneficiary. "Beneficiary": A person
receiving benefits from the Fund a pension fund, including, but
not limited to, retired pensioners, disabled pensioners, their
surviving spouses, minor children, disabled children, and
dependent parents. If a special needs trust as described in
Section 1396p(d)(4) of Title 42 of the United States Code, as
amended from time to time, has been established for a disabled
adult child, then the special needs trust may stand in lieu of
the disabled adult child as a beneficiary for the purposes of
this Article.
(Source: P.A. 96-1143, eff. 7-21-10.)

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(40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
Sec. 3-110. Creditable service.
(a) "Creditable service" is the time served by a police
officer as a member of a regularly constituted police force of
a municipality. In computing creditable service furloughs
without pay exceeding 30 days shall not be counted, but all
leaves of absence for illness or accident, regardless of
length, and all periods of disability retirement for which a
police officer has received no disability pension payments
under this Article shall be counted.
(a-3) Upon the consolidation of the police pension funds
under this Article into the Fund on January 1, 2020, creditable
service under any such pension fund shall be deemed to be
creditable service in the Fund, subject to the following
provisions:
(1) The consolidation of police pension funds into the
Fund shall not result in the duplication of any service
credit based on the same period of service in this or any
other pension fund or retirement system subject to this
Code.
(2) If this Section or any other provision of this
Article imposes a limit on the amount of creditable service
that may be established for a particular activity or
purpose and prior to consolidation a police officer has
established periods of creditable service for that
activity or purpose in more than one former police pension

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fund under this Article, which periods are within that
limitation for each such fund but together exceed that
limitation, then upon consolidation all such credit
previously established by the police officer shall be
preserved under the Fund, but no additional creditable
service for that activity or purpose may be established by
that police officer in the Fund.
(3) The consolidation of police pension funds into the
Fund shall not entitle any person or pension fund to a
refund of any contribution or payment previously paid or
transferred in order to establish or transfer creditable
service under this Article.
(a-5) Up to 3 years of time during which the police officer
receives a disability pension under Section 3-114.1, 3-114.2,
3-114.3, or 3-114.6 shall be counted as creditable service,
provided that (i) the police officer returns to active service
after the disability for a period at least equal to the period
for which credit is to be established and (ii) the police
officer makes contributions to the Fund fund based on the rates
specified in Section 3-125.1 and the salary upon which the
disability pension is based. These contributions may be paid at
any time prior to the commencement of a retirement pension. The
police officer may, but need not, elect to have the
contributions deducted from the disability pension or to pay
them in installments on a schedule approved by the board. If
not deducted from the disability pension, the contributions

SB3426 - 54 - LRB100 20446 MJP 35795 b
shall include interest at the rate of 6% per year, compounded
annually, from the date for which service credit is being
established to the date of payment. If contributions are paid
under this subsection (a-5) in excess of those needed to
establish the credit, the excess shall be refunded. This
subsection (a-5) applies to persons receiving a disability
pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
the effective date of this amendatory Act of the 91st General
Assembly, as well as persons who begin to receive such a
disability pension after that date.
(b) Creditable service includes all periods of service in
the military, naval or air forces of the United States entered
upon while an active police officer of a municipality, provided
that upon applying for a permanent pension, and in accordance
with the rules of the board, the police officer pays into the
Fund fund the amount the officer would have contributed if he
or she had been a regular contributor during such period, to
the extent that the municipality which the police officer
served has not made such contributions in the officer's behalf.
The total amount of such creditable service shall not exceed 5
years, except that any police officer who on July 1, 1973 had
more than 5 years of such creditable service shall receive the
total amount thereof.
(b-5) Creditable service includes all periods of service in
the military, naval, or air forces of the United States entered
upon before beginning service as an active police officer of a

SB3426 - 55 - LRB100 20446 MJP 35795 b
municipality, provided that, in accordance with the rules of
the board, the police officer pays into the Fund fund the
amount the police officer would have contributed if he or she
had been a regular contributor during such period, plus an
amount determined by the Board to be equal to the
municipality's normal cost of the benefit, plus interest at the
actuarially assumed rate calculated from the date the employee
last became a police officer under this Article. The total
amount of such creditable service shall not exceed 2 years.
(c) Creditable service also includes service rendered by a
police officer while on leave of absence from a police
department to serve as an executive of an organization whose
membership consists of members of a police department, subject
to the following conditions: (i) the police officer is a
participant of the Fund a fund established under this Article
with at least 10 years of service as a police officer; (ii) the
police officer received no credit for such service under any
other retirement system, pension fund, or annuity and benefit
fund included in this Code; (iii) pursuant to the rules of the
board the police officer pays to the Fund fund the amount he or
she would have contributed had the officer been an active
member of the police department; (iv) the organization pays a
contribution equal to the municipality's normal cost for that
period of service; and (v) for all leaves of absence under this
subsection (c), including those beginning before the effective
date of this amendatory Act of the 97th General Assembly, the

SB3426 - 56 - LRB100 20446 MJP 35795 b
police officer continues to remain in sworn status, subject to
the professional standards of the public employer or those
terms established in statute.
(d)(1) Creditable service also includes periods of
service originally established in another police pension
fund under this Article or in the Fund established under
Article 7 of this Code for which (i) the contributions have
been transferred under Section 3-110.7 or Section 7-139.9
and (ii) any additional contribution required under
paragraph (2) of this subsection has been paid in full in
accordance with the requirements of this subsection (d).
(2) If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 7-139.9 determines that the
amount transferred is less than the true cost to the
pension fund of allowing that creditable service to be
established, then in order to establish that creditable
service the police officer must pay to the pension fund,
within the payment period specified in paragraph (3) of
this subsection, an additional contribution equal to the
difference, as determined by the board in accordance with
the rules and procedures adopted under paragraph (6) of
this subsection. If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 3-110.7 determines that the
amount transferred is less than the true cost to the

SB3426 - 57 - LRB100 20446 MJP 35795 b
pension fund of allowing that creditable service to be
established, then the police officer may elect (A) to
establish that creditable service by paying to the pension
fund, within the payment period specified in paragraph (3)
of this subsection (d), an additional contribution equal to
the difference, as determined by the board in accordance
with the rules and procedures adopted under paragraph (6)
of this subsection (d) or (B) to have his or her creditable
service reduced by an amount equal to the difference
between the amount transferred under Section 3-110.7 and
the true cost to the pension fund of allowing that
creditable service to be established, as determined by the
board in accordance with the rules and procedures adopted
under paragraph (6) of this subsection (d).
(3) Except as provided in paragraph (4), the additional
contribution that is required or elected under paragraph
(2) of this subsection (d) must be paid to the board (i)
within 5 years from the date of the transfer of
contributions under Section 3-110.7 or 7-139.9 and (ii)
before the police officer terminates service with the fund.
The additional contribution may be paid in a lump sum or in
accordance with a schedule of installment payments
authorized by the board.
(4) If the police officer dies in service before
payment in full has been made and before the expiration of
the 5-year payment period, the surviving spouse of the

SB3426 - 58 - LRB100 20446 MJP 35795 b
officer may elect to pay the unpaid amount on the officer's
behalf within 6 months after the date of death, in which
case the creditable service shall be granted as though the
deceased police officer had paid the remaining balance on
the day before the date of death.
(5) If the additional contribution that is required or
elected under paragraph (2) of this subsection (d) is not
paid in full within the required time, the creditable
service shall not be granted and the police officer (or the
officer's surviving spouse or estate) shall be entitled to
receive a refund of (i) any partial payment of the
additional contribution that has been made by the police
officer and (ii) those portions of the amounts transferred
under subdivision (a)(1) of Section 3-110.7 or
subdivisions (a)(1) and (a)(3) of Section 7-139.9 that
represent employee contributions paid by the police
officer (but not the accumulated interest on those
contributions) and interest paid by the police officer to
the prior pension fund in order to reinstate service
terminated by acceptance of a refund.
At the time of paying a refund under this item (5), the
pension fund shall also repay to the pension fund from
which the contributions were transferred under Section
3-110.7 or 7-139.9 the amount originally transferred under
subdivision (a)(2) of that Section, plus interest at the
rate of 6% per year, compounded annually, from the date of

SB3426 - 59 - LRB100 20446 MJP 35795 b
the original transfer to the date of repayment. Amounts
repaid to the Article 7 fund under this provision shall be
credited to the appropriate municipality.
Transferred credit that is not granted due to failure
to pay the additional contribution within the required time
is lost; it may not be transferred to another pension fund
and may not be reinstated in the pension fund from which it
was transferred.
(6) The Public Employee Pension Fund Division of the
Department of Insurance shall establish by rule the manner
of making the calculation required under paragraph (2) of
this subsection, taking into account the appropriate
actuarial assumptions; the police officer's service, age,
and salary history; the level of funding of the pension
fund to which the credits are being transferred; and any
other factors that the Division determines to be relevant.
The rules may require that all calculations made under
paragraph (2) be reported to the Division by the board
performing the calculation, together with documentation of
the creditable service to be transferred, the amounts of
contributions and interest to be transferred, the manner in
which the calculation was performed, the numbers relied
upon in making the calculation, the results of the
calculation, and any other information the Division may
deem useful.
(e)(1) Creditable service also includes periods of

SB3426 - 60 - LRB100 20446 MJP 35795 b
service originally established in the Fund established
under Article 7 of this Code for which the contributions
have been transferred under Section 7-139.11.
(2) If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 7-139.11 determines that the
amount transferred is less than the true cost to the
pension fund of allowing that creditable service to be
established, then the amount of creditable service the
police officer may establish under this subsection (e)
shall be reduced by an amount equal to the difference, as
determined by the board in accordance with the rules and
procedures adopted under paragraph (3) of this subsection.
(3) The Public Pension Division of the Department of
Financial and Professional Regulation shall establish by
rule the manner of making the calculation required under
paragraph (2) of this subsection, taking into account the
appropriate actuarial assumptions; the police officer's
service, age, and salary history; the level of funding of
the pension fund to which the credits are being
transferred; and any other factors that the Division
determines to be relevant. The rules may require that all
calculations made under paragraph (2) be reported to the
Division by the board performing the calculation, together
with documentation of the creditable service to be
transferred, the amounts of contributions and interest to

SB3426 - 61 - LRB100 20446 MJP 35795 b
be transferred, the manner in which the calculation was
performed, the numbers relied upon in making the
calculation, the results of the calculation, and any other
information the Division may deem useful.
(4) Until January 1, 2010, a police officer who
transferred service from the Fund established under
Article 7 of this Code under the provisions of Public Act
94-356 may establish additional credit, but only for the
amount of the service credit reduction in that transfer, as
calculated under paragraph (3) of this subsection (e). This
credit may be established upon payment by the police
officer of an amount to be determined by the board, equal
to (1) the amount that would have been contributed as
employee and employer contributions had all of the service
been as an employee under this Article, plus interest
thereon at the rate of 6% per year, compounded annually
from the date of service to the date of transfer, less (2)
the total amount transferred from the Article 7 Fund, plus
(3) interest on the difference at the rate of 6% per year,
compounded annually, from the date of the transfer to the
date of payment. The additional service credit is allowed
under this amendatory Act of the 95th General Assembly
notwithstanding the provisions of Article 7 terminating
all transferred credits on the date of transfer.
(Source: P.A. 96-297, eff. 8-11-09; 96-1260, eff. 7-23-10;
97-651, eff. 1-5-12.)

SB3426 - 62 - LRB100 20446 MJP 35795 b
(40 ILCS 5/3-110.7)
Sec. 3-110.7. Transfer between Article 3 funds.
(a) Until January 1, 2020 (the consolidation date), an An
active member of a pension fund established under this Article
may apply for transfer to that fund of his or her creditable
service and related contributions accumulated in any other
police pension fund established under this Article, except that
a police officer may not transfer creditable service under this
Section from a pension fund unless (i) the police officer
actively served in the police department under that fund for at
least 2 years, (ii) the police officer actively served in the
police department under that fund for less than 2 years but was
laid off or otherwise involuntarily terminated for a reason
other than the fault of the officer, or (iii) the police
officer was not in service in the police department under that
fund on or after the effective date of this Section. Upon
receiving the application, that other pension fund shall
transfer to the pension fund in which the applicant currently
participates an amount equal to:
(1) the amounts actually contributed by or on behalf of
the applicant to the fund as employee contributions
(including any interest paid by the applicant in order to
reinstate service), plus interest on those amounts at the
rate of 6% per year, compounded annually, from the date of
contribution to the date of transfer; plus

SB3426 - 63 - LRB100 20446 MJP 35795 b
(2) an amount representing employer contributions,
equal to the total amount determined under subdivision (1).
Participation in that other pension fund shall terminate on the
date of transfer.
(b) An active member of the Fund a pension fund established
under this Article may reinstate in the Fund service in any
other pension fund established under this Article that was
terminated by receipt of a refund, by paying to the Fund that
other pension fund the amount of the refund plus interest
thereon at the rate of 6% per year, compounded annually, from
the date of refund to the date of payment.
(Source: P.A. 90-460, eff. 8-17-97.)
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. Financing; tax.
(a) The governing body city council or the board of
trustees of a participating 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 police
officers, and revenues available from other sources, will equal
a sum sufficient to meet the annual requirements of the account
of the participating municipality police pension fund. The
annual requirements to be provided by such tax levy are equal
to (1) the normal cost of benefits attributable to the
participating municipality and its police officers, as

SB3426 - 64 - LRB100 20446 MJP 35795 b
determined by an enrolled actuary employed by the Fund, the
pension fund for the year involved, plus (2) an amount
sufficient to bring the total assets of the account of the
participating municipality pension fund up to 90% of the total
actuarial liabilities of the account of the participating
municipality pension fund by the end of municipal fiscal year
2040, as annually updated and determined by an enrolled actuary
employed by the Fund 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
county.
(b) For purposes of determining the required employer
contribution to the Fund a pension fund, the value of the
pension fund's assets shall be equal to the actuarial value of

SB3426 - 65 - LRB100 20446 MJP 35795 b
the pension fund's assets, which shall be calculated as
follows:
(1) (Blank). 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 of the account of the participating municipality 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 fund contributions required of it under this Article
for more than 90 days after the payment of those contributions
is due, the Fund 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, for credit to
the account of the participating municipality, 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

SB3426 - 66 - LRB100 20446 MJP 35795 b
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 fund.
(d) (Blank). 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;
(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) (Blank). 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;

SB3426 - 67 - LRB100 20446 MJP 35795 b
(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 5/3-125.1) (from Ch. 108 1/2, par. 3-125.1)
Sec. 3-125.1. Contributions by police officers. Each
police officer shall contribute to the Fund pension fund the
following percentages of salary for the periods stated:
Beginning July 1, 1909 and prior to July 23, 1943, 1% (except
that prior to July 1, 1921 not more than one dollar per month
shall be deducted, and except that beginning July 1, 1921 and
prior to July 1, 1927 not more than $2 per month shall be
deducted); beginning July 23, 1943 and prior to July 20, 1949,
3%; beginning July 20, 1949 and prior to July 17, 1959, 5%;
beginning July 17, 1959 and prior to July 1, 1971, 7%;
beginning July 1, 1971 and prior to July 1, 1975, 7 1/2%;
beginning July 1, 1975 and prior to January 1, 1987, 8 1/2%;

SB3426 - 68 - LRB100 20446 MJP 35795 b
beginning January 1, 1987 and prior to January 1, 2001, 9%; and
beginning January 1, 2001, 9.91%. Such sums shall be paid or
deducted monthly. Contribution to the self-managed plan shall
be no less than 10% of salary.
"Salary" means the annual salary, including longevity,
attached to the police officer's rank, as established by the
municipality's appropriation ordinance, including any
compensation for overtime which is included in the salary so
established, but excluding any "overtime pay", "holiday pay",
"bonus pay", "merit pay", or any other cash benefit not
included in the salary so established.
(Source: P.A. 91-939, eff. 2-1-01.)
(40 ILCS 5/3-128) (from Ch. 108 1/2, par. 3-128)
Sec. 3-128. Board created.
(a) This subsection (a) applies until January 1, 2020.
A board of 5 members shall constitute a board of trustees to
administer the pension fund and to designate the beneficiaries
thereof. The board shall be known as the "Board of Trustees of
the Police Pension Fund" of the municipality.
Two members of the board shall be appointed by the mayor or
president of the board of trustees of the municipality
involved. The 3rd and 4th members of the board shall be elected
from the active participants of the pension fund by such active
participants. The 5th member shall be elected by and from the
beneficiaries.

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One of the members appointed by the mayor or president of
the board of trustees shall serve for one year beginning on the
2nd Tuesday in May after the municipality comes under this
Article. The other appointed member shall serve for 2 years
beginning on the same date. Their successors shall serve for 2
years each or until their successors are appointed and
qualified.
(b) The members of the boards of trustees serving on
December 31, 2019 may continue to exercise the powers of that
office until March 1, 2020 for the sole purpose of assisting in
the consolidation of their respective pension funds, but
subject to the supervision and requirements of the Transition
Board and the Illinois Municipal Retirement Fund.
(c) Beginning January 1, 2020, the Board of Trustees of the
Illinois Municipal Retirement Fund shall assume the duties of
the former boards of trustees.
The election for board members shall be held biennially on
the 3rd Monday in April, at such place or places in the
municipality and under the Australian ballot system and such
other regulations as shall be prescribed by the appointed
members of the board.
The active pension fund participants shall be entitled to
vote only for the active participant members of the board. All
beneficiaries of legal age may vote only for the member chosen
from among the beneficiaries. No person shall be entitled to
cast more than one ballot at such election. The term of elected

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members shall be 2 years, beginning on the 2nd Tuesday of the
first May after the election.
Upon the death, resignation or inability to act of any
elected board member, his or her successor shall be elected for
the unexpired term at a special election, to be called by the
board and conducted in the same manner as the regular biennial
election.
Members of the board shall neither receive nor have any
right to receive any salary from the pension fund for services
performed as trustees in that office.
(Source: P.A. 83-1440.)
(40 ILCS 5/3-134) (from Ch. 108 1/2, par. 3-134)
Sec. 3-134. To submit annual list of Fund fund payments. To
submit annually to the governing body of each participating
municipality city council or board of trustees at the close of
the municipality's fiscal year, a list of persons entitled to
payments from the Fund that are chargeable to the account of
the participating municipality fund, stating the amount of
payments, and their purpose, as ordered by the Board board. It
shall also include items of income accrued to the account of
the participating municipality fund during the fiscal year. The
list shall be signed by the secretary and president of the
Board board, and attested under oath. A resolution or order for
the payment of money shall not be valid unless approved by a
majority of the Board board members, and signed by the

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president and secretary of the Board board.
(Source: P.A. 83-1440.)
(40 ILCS 5/3-135) (from Ch. 108 1/2, par. 3-135)
Sec. 3-135. To invest funds. To determine the limitations
on the amounts of cash to be invested in order to maintain such
cash balances as may be deemed advisable to meet current
annuity, benefit, and expense requirements, and to invest the
remaining available cash in securities, in accordance with the
prudent person investment rule and the other provisions of this
Article. Beginning on the consolidation date, the Article 1 and
1A restrictions on the investment of Article 3 Funds no longer
apply, except to the extent that they do not also apply to
Article 7 of this Code. Beginning January 1, 1998, the board
shall invest funds in accordance with Sections 1-113.1 through
1-113.10 of this Code.
(Source: P.A. 90-507, eff. 8-22-97.)
(40 ILCS 5/3-141) (from Ch. 108 1/2, par. 3-141)
Sec. 3-141. Annual report by treasurer. On the 2nd Tuesday
in May annually through 2020, the treasurer of the municipality
and all other officials of the municipality who had the custody
of any pension funds herein provided, shall make a sworn
statement to the pension board, and to the mayor and council or
president and board of trustees of the municipality, of all
moneys received and paid out by them on account of the pension

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fund during the year, and of the amount of funds then on hand
and owing to the pension fund. The final report required under
this subsection shall be due in May of 2020 and shall include
the period up to and including the consolidation of the
municipality's pension fund into the Fund. All surplus then
remaining with any official other than the treasurer shall be
paid to the treasurer of the municipality or as directed by the
Board. Upon demand of the Board pension board, any official
shall furnish a statement relative to the official method of
collection or handling of the pension funds. All books and
records of that official shall be produced at any time by him
for examination and inspection by the Board board.
(Source: P.A. 83-1440.)
(40 ILCS 5/3-141a new)
Sec. 3-141a. Termination of participation by a
participating municipality. If a participating municipality
terminates participation because it fails to meet the
requirements of Section 3-103, it shall pay to the Fund the
amount equal to any net debit balance in its municipality
account and any account receivable. Its successors, assigns,
and transferees of its assets shall be obligated to make this
payment to the extent of the value of assets transferred to
them. The Fund shall pay an amount equal to any net credit
balance to the participating municipality, its successors or
assigns. Any remaining net debit or credit balance not

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collectible or payable shall be transferred to a terminated
municipality reserve account. The Fund shall pay to each police
officer of the participating municipality an amount equal to
his or her credits in the employee reserves. The employees
shall have no further rights to any benefits from the Fund,
except that annuities awarded prior to the date of termination
shall continue to be paid.
(40 ILCS 5/3-141b new)
Sec. 3-141b. Authorizations.
(a) Each participating municipality shall:
(1) deduct all normal and additional contributions
from each payment of earnings payable to each participating
employee who is entitled to any earnings from the
municipality, and remit all normal and additional
contributions immediately to the Board; and
(2) pay to the Board contributions required by this
Article.
(b) Each participating employee shall, by virtue of the
payment of contributions to this Fund, receive a vested
interest in the annuities and benefits provided in this Article
and in consideration of such vested interest shall be deemed to
have agreed and authorized the deduction from earnings of all
contributions payable to this Fund in accordance with this
Article.
(c) Payment of earnings less the amounts of contributions

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provided in this Article shall be a full and complete discharge
of all claims for payment for services rendered by any employee
during the period covered by any such payment.
(40 ILCS 5/4-102.1 new)
Sec. 4-102.1. Fund. "Fund" or "pension fund": Until January
1, 2020, a firefighters' pension fund established by a
municipality under this Article.
Beginning January 1, 2020, "Fund" or "pension fund" means
the Illinois Municipal Retirement Fund with respect to this
Article; depending on the context, the terms may include one or
more of those previously established pension funds.
(40 ILCS 5/4-103) (from Ch. 108 1/2, par. 4-103)
Sec. 4-103. Municipality; participating municipality;
governing body.
(a) "Municipality": (1) Any city, township, village or
incorporated town of 5,000 or more but less than 500,000
inhabitants, and any fire protection district having any
full-time paid firefighters, and (2) any city, village,
incorporated town or township of less than 5,000 inhabitants
having a full-time paid fire department which adopts the
provisions of this Article article pursuant to the provisions
of Section 4-141.
(b) The term "participating municipality" means a
municipality, as defined in subsection (a), that both is

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required (or has elected) to and does in fact participate in
the Fund with respect to its firefighters under this Article.
(c) The term "governing body", "city council", or "board of
trustees" includes the board of trustees of a fire protection
district and the board of town trustees or other persons
empowered to draft the tentative budget and appropriation
ordinance and the electors of such a township acting at the
annual or special meeting of town electors.
(Source: P.A. 83-1440.)
(40 ILCS 5/4-105) (from Ch. 108 1/2, par. 4-105)
Sec. 4-105. Board. "Board": Until January 1, 2020, the The
"Board of Trustees of the Firefighters' Pension Fund" of a
municipality as established in subsection (a) of Section 4-121.
Beginning January 1, 2020, the Board of Trustees of the
Illinois Municipal Retirement Fund; depending on the context,
the term may include the former board of trustees of one or
more of those previously established pension funds.
(Source: P.A. 83-1440.)
(40 ILCS 5/4-105c)
Sec. 4-105c. Participant. "Participant": A firefighter or
deferred pensioner of the Fund a pension fund, or a beneficiary
of the Fund pension fund.
(Source: P.A. 90-507, eff. 8-22-97.)

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(40 ILCS 5/4-105d)
Sec. 4-105d. Beneficiary. "Beneficiary": A person
receiving benefits from the Fund a pension fund, including, but
not limited to, retired pensioners, disabled pensioners, their
surviving spouses, minor children, disabled children, and
dependent parents.
(Source: P.A. 90-507, eff. 8-22-97.)
(40 ILCS 5/4-106.5 new)
Sec. 4-106.5. Authorized agent of a participating
municipality.
(a) Each participating municipality shall appoint an
authorized agent who shall have the powers and duties set forth
in this Section. In the absence of such an appointment, the
duties of the authorized agent shall devolve upon the clerk or
secretary of the municipality. The authorized agent may be the
same person appointed as the authorized agent under Section
7-135.
(b) The authorized agent of the municipality shall have the
following powers and duties:
(1) To certify to the Fund whether or not a given
person is authorized to participate in the Fund.
(2) To certify to the Fund when a participating
employee is on a leave of absence authorized by the
municipality.
(3) To request the proper officer to cause employee

SB3426 - 77 - LRB100 20446 MJP 35795 b
contributions to be withheld from salary and promptly
transmitted to the Fund.
(4) To request the proper officer to cause municipality
contributions to be promptly forwarded to the Fund.
(5) To forward promptly to all participating employees
any communications for such employees from the Fund or the
municipality.
(6) To forward promptly to the Board of the Fund all
applications, claims reports, and other communications
delivered to the agent by participating employees.
(7) To perform all duties related to the administration
of the Fund as requested by the Fund or the governing body
of the municipality.
(c) The governing body of each participating municipality
may delegate either or both of the following powers to its
authorized agent:
(1) To file a petition for nomination of an executive
trustee of the Fund.
(2) To cast the ballot for election of an executive
trustee of the Fund.
If a governing body does not authorize its agent to perform
the powers set forth in this Section, they shall be performed
by the governing body itself, unless the governing body by
resolution duly certified to the Fund delegates them to some
other officer or employee.
(d) The delivery of any communication or document by an

SB3426 - 78 - LRB100 20446 MJP 35795 b
employee or a municipality to the authorized agent of the
municipality does not constitute delivery to the Fund.
(40 ILCS 5/4-108) (from Ch. 108 1/2, par. 4-108)
Sec. 4-108. Creditable service.
(a) Creditable service is the time served as a firefighter
of a municipality. In computing creditable service, furloughs
and leaves of absence without pay exceeding 30 days in any one
year shall not be counted, but leaves of absence for illness or
accident regardless of length, and periods of disability for
which a firefighter received no disability pension payments
under this Article, shall be counted.
(a-5) Upon the consolidation of the firefighters' pension
funds under this Article into the Illinois Municipal Retirement
Fund on January 1, 2020, creditable service under any
firefighters' pension fund shall be deemed to be creditable
service in the Fund, subject to the following provisions:
(1) The consolidation of firefighters' pension funds
into the Illinois Municipal Retirement Fund shall not
result in the duplication of any service credit based on
the same period of service in this or any other pension
fund or retirement system subject to this Code.
(2) If this Section or any other provision of this
Article imposes a limit on the amount of creditable service
that may be established for a particular activity or
purpose, and prior to consolidation a firefighter has

SB3426 - 79 - LRB100 20446 MJP 35795 b
established periods of creditable service for that
activity or purpose in more than one former firefighters'
pension fund under this Article, which periods are within
that limitation for each such fund but together exceed that
limitation, then upon consolidation all such credit
previously established by the firefighter shall be
preserved under the Fund, but no additional creditable
service for that activity or purpose may be established by
that firefighter in the Fund.
(3) The consolidation of firefighters' pension funds
into the Illinois Municipal Retirement Fund shall not
entitle any person or pension fund to a refund of any
contribution or payment previously paid or transferred in
order to establish or transfer creditable service under
this Article.
(b) Furloughs and leaves of absence of 30 days or less in
any one year may be counted as creditable service, if the
firefighter makes the contribution to the Fund fund that would
have been required had he or she not been on furlough or leave
of absence. To qualify for this creditable service, the
firefighter must pay the required contributions to the Fund
fund not more than 90 days subsequent to the termination of the
furlough or leave of absence, to the extent that the
municipality has not made such contribution on his or her
behalf.
(c) Creditable service includes:

SB3426 - 80 - LRB100 20446 MJP 35795 b
(1) Service in the military, naval or air forces of the
United States entered upon when the person was an active
firefighter, provided that, upon applying for a permanent
pension, and in accordance with the rules of the board the
firefighter pays into the Fund fund the amount that would
have been contributed had he or she been a regular
contributor during such period of service, if and to the
extent that the municipality which the firefighter served
made no such contributions in his or her behalf. The total
amount of such creditable service shall not exceed 5 years,
except that any firefighter who on July 1, 1973 had more
than 5 years of such creditable service shall receive the
total amount thereof as of that date.
(1.5) Up to 24 months of service in the military,
naval, or air forces of the United States that was served
prior to employment by a municipality or fire protection
district as a firefighter. To receive the credit for the
military service prior to the employment as a firefighter,
the firefighter must apply in writing to the Fund fund and
must make contributions to the Fund fund equal to (i) the
employee contributions that would have been required had
the service been rendered as a member, plus (ii) an amount
determined by the Fund fund to be equal to the employer's
normal cost of the benefits accrued for that military
service, plus (iii) interest at the prescribed rate
actuarially assumed rate provided by the Department of

SB3426 - 81 - LRB100 20446 MJP 35795 b
Financial and Professional Regulation, compounded annually
from the first date of membership in the Fund fund to the
date of payment on items (i) and (ii). The changes to this
paragraph (1.5) made by Public Act 95-1056 this amendatory
Act of the 95th General Assembly apply only to
participating employees in service on or after April 10,
2009 (its effective date).
(2) Service prior to July 1, 1976 by a firefighter
initially excluded from participation by reason of age who
elected to participate and paid the required contributions
for such service.
(3) Up to 8 years of service by a firefighter as an
officer in a statewide firefighters' association when he is
on a leave of absence from a municipality's payroll,
provided that (i) the firefighter has at least 10 years of
creditable service as an active firefighter, (ii) the
firefighter contributes to the Fund fund the amount that he
would have contributed had he remained an active member of
the Fund fund, (iii) the employee or statewide firefighter
association contributes to the Fund fund an amount equal to
the employer's required contribution as determined by the
board, and (iv) for all leaves of absence under this
subdivision (3), including those beginning before January
5, 2012 (the effective date of Public Act 97-651) this
amendatory Act of the 97th General Assembly, the
firefighter continues to remain in sworn status, subject to

SB3426 - 82 - LRB100 20446 MJP 35795 b
the professional standards of the public employer or those
terms established in statute.
(4) Time spent as an on-call fireman for a
municipality, calculated at the rate of one year of
creditable service for each 5 years of time spent as an
on-call fireman, provided that (i) the firefighter has at
least 18 years of creditable service as an active
firefighter, (ii) the firefighter spent at least 14 years
as an on-call firefighter for the municipality, (iii) the
firefighter applies for such creditable service within 30
days after August 23, 1989 (the effective date of Public
Act 86-273) this amendatory Act of 1989, (iv) the
firefighter contributes to the Fund an amount representing
employee contributions for the number of years of
creditable service granted under this subdivision (4),
based on the salary and contribution rate in effect for the
firefighter at the date of entry into the Fund, to be
determined by the board, and (v) not more than 3 years of
creditable service may be granted under this subdivision
(4).
Except as provided in Section 4-108.5, creditable
service shall not include time spent as a volunteer
firefighter, whether or not any compensation was received
therefor. The change made in this Section by Public Act
83-0463 is intended to be a restatement and clarification
of existing law, and does not imply that creditable service

SB3426 - 83 - LRB100 20446 MJP 35795 b
was previously allowed under this Article for time spent as
a volunteer firefighter.
(5) Time served between July 1, 1976 and July 1, 1988
in the position of protective inspection officer or
administrative assistant for fire services, for a
municipality with a population under 10,000 that is located
in a county with a population over 3,000,000 and that
maintains a firefighters' pension fund under this Article,
if the position included firefighting duties,
notwithstanding that the person may not have held an
appointment as a firefighter, provided that application is
made to the pension fund within 30 days after November 19,
1991 (the effective date of Public Act 87-794) this
amendatory Act of 1991, and the corresponding
contributions are paid for the number of years of service
granted, based upon the salary and contribution rate in
effect for the firefighter at the date of entry into the
pension fund, as determined by the Board.
(6) Service before becoming a participant by a
firefighter initially excluded from participation by
reason of age who becomes a participant under the amendment
to Section 4-107 made by Public Act 87-1265 this amendatory
Act of 1993 and pays the required contributions for such
service.
(7) Up to 3 years of time during which the firefighter
receives a disability pension under Section 4-110,

SB3426 - 84 - LRB100 20446 MJP 35795 b
4-110.1, or 4-111, provided that (i) the firefighter
returns to active service after the disability for a period
at least equal to the period for which credit is to be
established and (ii) the firefighter makes contributions
to the Fund fund based on the rates specified in Section
4-118.1 and the salary upon which the disability pension is
based. These contributions may be paid at any time prior to
the commencement of a retirement pension. The firefighter
may, but need not, elect to have the contributions deducted
from the disability pension or to pay them in installments
on a schedule approved by the board. If not deducted from
the disability pension, the contributions shall include
interest at the rate of 6% per year, compounded annually,
from the date for which service credit is being established
to the date of payment. If contributions are paid under
this subdivision (c)(7) in excess of those needed to
establish the credit, the excess shall be refunded. This
subdivision (c)(7) applies to persons receiving a
disability pension under Section 4-110, 4-110.1, or 4-111
on the effective date of this amendatory Act of the 91st
General Assembly, as well as persons who begin to receive
such a disability pension after that date.
(8) Up to 6 years of service as a police officer and
participant in an Article 3 police pension fund
administered by the unit of local government that employs
the firefighter under this Article, provided that the

SB3426 - 85 - LRB100 20446 MJP 35795 b
service has been transferred to, and the required payment
received by, the Article 4 fund in accordance with Section
3-110.12 of this Code.
(Source: P.A. 100-544, eff. 11-8-17.)
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
Sec. 4-118. Financing; tax.
(a) The governing body city council or the board of
trustees of a participating 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 account of the participating municipality
pension fund, as determined by an enrolled actuary employed by
the Fund 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 account of the participating municipality pension fund are
equal to (1) the normal cost of benefits attributable to the
participating municipality and its firefighters, as determined
by an enrolled actuary employed by the Fund 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 sufficient to bring the total assets of

SB3426 - 86 - LRB100 20446 MJP 35795 b
the account of the participating municipality pension fund up
to 90% of the total actuarial liabilities of the account of the
participating municipality pension fund by the end of municipal
fiscal year 2040, as annually updated and determined by an
enrolled actuary employed by the Fund 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-5) For purposes of determining the required employer
contribution to the Fund a pension fund, the value of the
pension fund's assets of the account of the participating
municipality shall be equal to the actuarial value of the
pension fund's assets of the account of the participating
municipality, which shall be calculated as follows:
(1) (Blank). 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.

SB3426 - 87 - LRB100 20446 MJP 35795 b
(2) In determining the actuarial value of the pension
fund's assets of the account of the participating
municipality 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.
(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 Fund 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 fund contributions required of it under this Article
for more than 90 days after the payment of those contributions
is due, the Fund 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

SB3426 - 88 - LRB100 20446 MJP 35795 b
fiscal year 2016, deduct and remit to the Fund, for credit to
the account of the participating municipality, 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
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 fund.
(c) The Board 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 fund by the Department of
Insurance.
(d) (Blank). 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; (3) all rewards in money, fees,

SB3426 - 89 - LRB100 20446 MJP 35795 b
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.
(e) (Blank). 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) (Blank). 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:

SB3426 - 90 - LRB100 20446 MJP 35795 b
(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 5/4-118.1) (from Ch. 108 1/2, par. 4-118.1)
Sec. 4-118.1. Contributions by firefighters.
(a) Beginning January 1, 1976 and until August 6, 1999 (the
effective date of Public Act 91-466) this amendatory Act of the
91st General Assembly, each firefighter shall contribute to the
pension fund 6 3/4% of salary towards the cost of his or her
pension. Beginning August 6, 1999 on the effective date of this
amendatory Act of the 91st General Assembly, each firefighter
shall contribute to the pension fund 6.955% of salary towards
the cost of his or her pension.
(b) In addition, beginning January 1, 1976, each
firefighter shall contribute 1% of salary toward the cost of

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the increase in pension provided in Section 4-109.1; beginning
January 1, 1987, such contribution shall be 1.5% of salary;
beginning July 1, 2004, the contribution shall be 2.5% of
salary.
(c) Beginning on July 1, 2004 (the effective date of Public
Act 93-689) this amendatory Act of the 93rd General Assembly,
each firefighter who elects to receive a pension under Section
4-109.3 and who has participated in at least one other pension
fund under this Article for a period of at least one year shall
contribute an additional 1.0% of salary toward the cost of the
increase in pensions provided in Section 4-109.3; except that
beginning January 1, 2020, no additional contributions shall be
paid under this subsection (c).
In the event that a firefighter does not elect to receive a
retirement pension provided under Section 4-109.3 from one or
more of the pension funds under this Article in which the
firefighter has credit, he or she shall, upon withdrawal from
the last pension fund as defined in Section 4-109.3, be
entitled to receive, from each such fund to which he or she has
paid additional contributions under this subsection (c) and
from which he or she does not receive a refund under Section
4-116, a refund of those contributions without interest.
Beginning January 1, 2020, however, such refunds shall be
payable from the Illinois Municipal Retirement Fund and
chargeable to the appropriate municipal accounts and reserves.
A refund of total contributions to a particular firefighter

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pension fund under Section 4-116 shall include any refund of
additional contributions paid to that fund under this
subsection (c), but a firefighter who accepts a refund from a
pension fund under Section 4-116 is thereafter ineligible to
receive a pension provided under Section 4-109.3 from that
fund. A firefighter who meets the eligibility requirements of
Section 4-109.3 may receive a pension under Section 4-109.3
from any pension fund from which the firefighter has not
received a refund under Section 4-116 or under this subsection
(c); except that beginning January 1, 2020 (the consolidation
date), such pensions shall be payable from the Illinois
Municipal Retirement Fund as provided in Section 4-109.3 and
chargeable to the appropriate municipal accounts and reserves.
(d) "Salary" means the annual salary, including longevity,
attached to the firefighter's rank, as established by the
municipality appropriation ordinance, including any
compensation for overtime which is included in the salary so
established, but excluding any "overtime pay", "holiday pay",
"bonus pay", "merit pay", or any other cash benefit not
included in the salary so established.
(e) The contributions shall be deducted and withheld from
the salary of firefighters.
(Source: P.A. 93-689, eff. 7-1-04.)
(40 ILCS 5/4-121) (from Ch. 108 1/2, par. 4-121)
Sec. 4-121. Board created.

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(a) This subsection (a) applies until January 1, 2020.
There is created in each municipality or fire protection
district a board of trustees to be known as the "Board of
Trustees of the Firefighters' Pension Fund". The membership of
the board for each municipality shall be, respectively, as
follows: in cities, the treasurer, clerk, marshal or chief
officer of the fire department, and the comptroller if there is
one, or if not, the mayor; in each township, village or
incorporated town, the president of the municipality's board of
trustees, the village or town clerk, village or town attorney,
village or town treasurer, and the chief officer of the fire
department; and in each fire protection district, the president
and other 2 members of its board of trustees and the marshal or
chief of its fire department or service, as the case may be;
and in all the municipalities above designated 3 additional
persons chosen from their active firefighters and one other
person who has retired under the Firemen's Pension Fund Act of
1919, or this Article. The Notwithstanding any provision of
this Section to the contrary, the term of office of each member
of a board established on or before the 3rd Monday in April,
2006 shall terminate on the 3rd Monday in April, 2006, but all
incumbent members shall continue to exercise all of the powers
and be subject to all of the duties of a member of the board
until all the new members of the board take office.
Beginning on the 3rd Monday in April, 2006 and until
January 1, 2020, the board of trustees for each municipality or

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fire protection district shall consist of 5 members. Two
members of the board shall be appointed by the mayor or
president of the board of trustees of the municipality or fire
protection district involved. Two members of the board shall be
active participants of the pension fund who are elected from
the active participants of the fund. One member of the board
shall be a person who is retired under the Firemen's Pension
Fund Act of 1919 or this Article who is elected from persons
retired under the Firemen's Pension Fund Act of 1919 or this
Article.
For the purposes of this Section, a firefighter receiving a
disability pension shall be considered a retired firefighter.
In the event that there are no retired firefighters under the
Fund or if none is willing to serve on the board, then an
additional active firefighter shall be elected to the board in
lieu of the retired firefighter that would otherwise be
elected.
If the regularly constituted fire department of a
municipality is dissolved and Section 4-106.1 is not
applicable, the board shall continue to exist and administer
the Fund so long as there continues to be any annuitant or
deferred pensioner in the Fund. In such cases, elections shall
continue to be held as specified in this Section, except that:
(1) deferred pensioners shall be deemed to be active members
for the purposes of such elections; (2) any otherwise
unfillable positions on the board, including ex officio

SB3426 - 95 - LRB100 20446 MJP 35795 b
positions, shall be filled by election from the remaining
firefighters and deferred pensioners of the Fund, to the extent
possible; and (3) if the membership of the board falls below 3
persons, the Illinois Director of Insurance or his designee
shall be deemed a member of the board, ex officio.
(b) The members of the boards of trustees serving on
December 31, 2019 may continue to exercise the powers of that
office until March 1, 2020 for the sole purpose of assisting in
the consolidation of their respective pension funds, but
subject to the supervision and requirements of the Transition
Board.
(c) Beginning January 1, 2020, the Board of Trustees of the
Illinois Municipal Retirement Fund shall assume the duties of
the former boards of trustees.
The members chosen from the active and retired firefighters
shall be elected by ballot at elections to be held on the 3rd
Monday in April of the applicable years under the Australian
ballot system, at such place or places, in the municipality,
and under such regulations as shall be prescribed by the board.
No person shall cast more than one vote for each candidate
for whom he or she is eligible to vote. In the elections for
board members to be chosen from the active firefighters, all
active firefighters and no others may vote. In the elections
for board members to be chosen from retired firefighters, the
retired firefighters and no others may vote.
Each member of the board so elected shall hold office for a

SB3426 - 96 - LRB100 20446 MJP 35795 b
term of 3 years and until his or her successor has been duly
elected and qualified.
The board shall canvass the ballots and declare which
persons have been elected and for what term or terms
respectively. In case of a tie vote between 2 or more
candidates, the board shall determine by lot which candidate or
candidates have been elected and for what term or terms
respectively. In the event of the failure, resignation, or
inability to act of any board member, a successor shall be
elected for the unexpired term at a special election called by
the board and conducted in the same manner as a regular
election.
The board shall elect annually from its members a president
and secretary.
Board members shall not receive or have any right to
receive any salary from a pension fund for services performed
as board members.
(Source: P.A. 100-201, eff. 8-18-17.)
(40 ILCS 5/4-124) (from Ch. 108 1/2, par. 4-124)
Sec. 4-124. To enforce contributions. To assess each
firefighter the contributions required under Section 4-118.1.
The contributions deducted from salaries, together with all
interest accruing thereon, shall be paid promptly placed by the
treasurer of the municipality as ex officio treasurer of the
board, to the Treasurer credit of the Fund pension fund,

SB3426 - 97 - LRB100 20446 MJP 35795 b
subject to the order of the Board board.
(Source: P.A. 83-1440.)
(40 ILCS 5/4-128) (from Ch. 108 1/2, par. 4-128)
Sec. 4-128. To invest funds. To determine the limitations
on the amounts of cash to be invested in order to maintain such
cash balances as may be deemed advisable to meet current
annuity, benefit, and expense requirements, and to invest the
remaining available cash in securities, in accordance with the
prudent person investment rule and the other provisions of this
Article. Beginning on the consolidation date, the Article 1 and
1A restrictions on the investment of Article 4 Funds no longer
apply, to the extent that they do not also apply to Article 7
of this Code. Beginning January 1, 1998, the board shall invest
funds in accordance with Sections 1-113.1 through 1-113.10 of
this Code.
(Source: P.A. 90-507, eff. 8-22-97.)
(40 ILCS 5/4-130.1 new)
Sec. 4-130.1. Termination of participation by a
participating municipality. If a participating municipality
terminates participation because it fails to meet the
requirements of Section 3-103, it shall pay to the Fund the
amount equal to any net debit balance in its municipality
account and any account receivable. Its successors, assigns,
and transferees of its assets shall be obligated to make this

SB3426 - 98 - LRB100 20446 MJP 35795 b
payment to the extent of the value of assets transferred to
them. The Fund shall pay an amount equal to any net credit
balance to the participating municipality, its successors or
assigns. Any remaining net debit or credit balance not
collectible or payable shall be transferred to a terminated
municipality reserve account. The Fund shall pay to each
firefighter of the participating municipality an amount equal
to his or her credits in the employee reserves. The employees
shall have no further rights to any benefits from the Fund,
except that annuities awarded prior to the date of termination
shall continue to be paid.
(40 ILCS 5/4-130.3 new)
Sec. 4-130.3. Authorizations.
(a) Each participating municipality shall:
(1) Deduct all normal and additional contributions
from each payment of earnings payable to each participating
employee who is entitled to any earnings from the
municipality, and remit all normal and additional
contributions immediately to the Board; and
(2) Pay to the Board contributions required by this
Article.
(b) Each participating employee shall, by virtue of the
payment of contributions to this Fund, receive a vested
interest in the annuities and benefits provided in this Article
and in consideration of such vested interest shall be deemed to

SB3426 - 99 - LRB100 20446 MJP 35795 b
have agreed and authorized the deduction from earnings of all
contributions payable to this Fund in accordance with this
Article.
(c) Payment of earnings less the amounts of contributions
provided in this Article shall be a full and complete discharge
of all claims for payment for services rendered by any employee
during the period covered by any such payment.
(40 ILCS 5/4-134) (from Ch. 108 1/2, par. 4-134)
Sec. 4-134. Report for tax levy.
(a) The Board board shall report to the governing body of
each participating city council or board of trustees of the
municipality on the condition of the Fund pension fund at the
end of its most recently completed fiscal year. The report
shall be made prior to the council or board meeting held for
appropriating and levying taxes for the year for which the
report is made.
The pension board in the report shall certify and provide
the following information to the city council or board of
trustees of the municipality:
(1) the total assets of the fund and the their current
market value of those assets;
(2) the estimated receipts during the next succeeding
fiscal year from deductions from the salaries or wages of
firefighters, and from all other sources;
(3) the estimated amount necessary during the fiscal

SB3426 - 100 - LRB100 20446 MJP 35795 b
year to meet the annual actuarial requirements of the
pension fund as provided in Sections 4-118 and 4-120;
(4) the total net income received from investment of
assets along with the assumed investment return and actual
investment return received by the Fund fund during its most
recently completed fiscal year compared to the total net
income, assumed investment return, and actual investment
return received during the preceding fiscal year;
(5) the increase in employer pension contributions
that results from the implementation of the provisions of
Public Act 93-689 this amendatory Act of the 93rd General
Assembly;
(6) the total number of active employees who are
financially contributing to the fund;
(7) the total amount that was disbursed in benefits
during the fiscal year, including the number of and total
amount disbursed to (i) annuitants in receipt of a regular
retirement pension, (ii) recipients being paid a
disability pension, and (iii) survivors and children in
receipt of benefits;
(8) the funded ratio of the Fund fund; and
(9) the unfunded liability carried by the Fund fund,
along with an actuarial explanation of the unfunded
liability. ; and
(10) the investment policy of the pension board under
the statutory investment restrictions imposed on the fund.

SB3426 - 101 - LRB100 20446 MJP 35795 b
Before the Board pension board makes its report, the Fund
municipality shall have the assets of the Fund fund and their
current market value verified by an independent certified
public accountant of its choice.
(b) A participating The municipality is authorized to
publish the report submitted under this Section. This
publication may be made, without limitation, by publication in
a local newspaper of general circulation in the municipality or
by publication on the municipality's Internet website. If the
municipality publishes the report, then that publication must
include all of the information relating to that municipality
submitted by the Board pension board under subsection (a).
(Source: P.A. 95-950, eff. 8-29-08.)
(40 ILCS 5/7-175) (from Ch. 108 1/2, par. 7-175)
Sec. 7-175. Board elections.
(a) During the period beginning on August 1 and ending on
September 15 of each year the board shall accept nominations of
candidates for election to the trusteeships for terms beginning
the next January 1, new trusteeships or vacancies to be filled
by election.
(b) All nominations shall be by petition. Three petitions
for an executive trustee shall be signed by governing bodies of
contributing participating municipalities or
instrumentalities.
A petition for an employee trustee shall be signed by at

SB3426 - 102 - LRB100 20446 MJP 35795 b
least 350 participating employees who were participants during
July of the current year and who, if their employment status
remained unchanged, would be eligible to vote for such
candidate at the following election.
A petition for an annuitant trustee shall be signed by at
least 100 persons who were annuitants of the Fund during July
of the current year and who, if their annuitant status remains
unchanged, would be eligible to vote for the candidate at the
following election.
(c) A separate ballot shall be used for each class of
trustee and the names of all candidates properly nominated in
petitions received by the board shall be placed in alphabetical
order upon the proper ballot. Where two employee trustees are
elected to a full term in the same year, there shall be one
election for the two trusteeships and the two candidates
getting the highest number of votes shall be elected.
(d) At any election, each contributing participating
municipality and participating instrumentality and each
contributing participating employee employed by such
participating municipality or participating instrumentality
during September of any year, shall be entitled to vote as
follows:
1. The governing body of each such participating
municipality and participating instrumentality shall have
one vote at any election in which an executive trustee is
to be elected, and may cast such vote for any candidate on

SB3426 - 103 - LRB100 20446 MJP 35795 b
the executive trustee ballot.
2. Each participating employee shall have one vote at
any election in which an employee trustee is to be elected,
and may cast such vote for any candidate on the employee
trustee ballot.
3. Each annuitant of the Fund shall have one vote at
any election in which an annuitant trustee is to be
elected, and may cast that vote for any candidate on the
annuitant trustee ballot.
4. A vote may be cast for a person not on the ballot by
writing in his or her name.
(e) The election shall be by ballot pursuant to the rules
and regulations established by the board and shall be completed
by December 31 of the year. The results shall be entered in the
minutes of the meeting of the board following the tally of
votes.
(f) In case of a tie vote, the candidate employed by or
retired from the participating municipality or participating
instrumentality having the greatest number of participating
employees at the time shall be elected.
(g) Notwithstanding any other provision of this Article, if
only one candidate is properly nominated in petitions received
by the Board, that candidate shall be deemed the winner. In the
case of 2 employee trustees elected to a full term in the same
year, if only 2 candidates are properly nominated in petitions
received by the Board, those 2 candidates shall both be deemed

SB3426 - 104 - LRB100 20446 MJP 35795 b
winners. If a candidate is deemed a winner under this
paragraph, no election under this Section or Section 7-175.1
shall be required.
(h) For the purposes of this Section, "annuitant" includes
a person who receives an annuity pursuant to Article 3 or 4.
For the purposes of this Section, "contributing
participating municipality" includes a municipality that
participates in Article 3 or 4.
For the purposes of this Section, "participating employee"
includes a police officer under Article 3 or a firefighter
under Article 4.
(Source: P.A. 98-932, eff. 8-15-14.)
(40 ILCS 5/7-175.1) (from Ch. 108 1/2, par. 7-175.1)
Sec. 7-175.1. Election of employee and annuitant trustees.
(a) The board shall prepare and send ballots and ballot
envelopes to the employees, including police officers under
Article 3 and firefighters under Article 4, and annuitants
eligible to vote as of September of that year. The ballots
shall contain the names of all candidates in alphabetical order
and an appropriate place where a name may be written in on the
ballot. The ballot envelope shall have on the outside a form of
certificate stating that the person voting the ballot is a
participating employee or annuitant entitled to vote.
(b) Employees and annuitants, upon receipt of the ballot,
shall vote the ballot and place it in the ballot envelope, seal

SB3426 - 105 - LRB100 20446 MJP 35795 b
the envelope, execute the certificate thereon and return the
ballot to the Fund.
(c) 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.
(d) 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 and regulations necessary for
the conduct of the count.
(e) No election under this Section shall be required if a
candidate is deemed the winner under subsection (g) of Section
7-175.
(Source: P.A. 98-932, eff. 8-15-14.)
Section 90. The State Mandates Act is amended by adding
Section 8.42 as follows:
(30 ILCS 805/8.42 new)
Sec. 8.42. 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 this amendatory Act of
the 100th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law, except that Sections 5 and 15 take effect January
1, 2020.
SB3426 - 106 - LRB100 20446 MJP 35795 b
INDEX
Statutes amended in order of appearance
35 ILCS 200/18-185
40 ILCS 5/3-101 from Ch. 108 1/2, par. 3-101
40 ILCS 5/3-101.1 new
40 ILCS 5/3-101.2 new
40 ILCS 5/3-106 from Ch. 108 1/2, par. 3-106
40 ILCS 5/4-101 from Ch. 108 1/2, par. 4-101
40 ILCS 5/4-101.1 new
40 ILCS 5/4-101.2 new
40 ILCS 5/4-106 from Ch. 108 1/2, par. 4-106
40 ILCS 5/7-109 from Ch. 108 1/2, par. 7-109
40 ILCS 5/7-199.5 new
40 ILCS 5/7-199.6 new
40 ILCS 5/3-102.1 new
40 ILCS 5/3-103 from Ch. 108 1/2, par. 3-103
40 ILCS 5/3-103.9 new
40 ILCS 5/3-105 from Ch. 108 1/2, par. 3-105
40 ILCS 5/3-108.2
40 ILCS 5/3-108.3
40 ILCS 5/3-110 from Ch. 108 1/2, par. 3-110
40 ILCS 5/3-110.7
40 ILCS 5/3-125 from Ch. 108 1/2, par. 3-125
40 ILCS 5/3-125.1 from Ch. 108 1/2, par. 3-125.1
40 ILCS 5/3-128 from Ch. 108 1/2, par. 3-128
SB3426 - 107 - LRB100 20446 MJP 35795 b