SB0134 94TH GENERAL ASSEMBLY

LRB094 07114 EFG 37259 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB0134

Introduced 2/1/2005, by Sen. James F. Clayborne, Jr.

SYNOPSIS AS INTRODUCED:

40 ILCS 5/7-190	from Ch. 108 1/2, par. 7-190
40 ILCS 5/7-201	from Ch. 108 1/2, par. 7-201
40 ILCS 5/7-201.1	from Ch. 108 1/2, par. 7-201.1
40 ILCS 5/22A-113	from Ch. 108 1/2, par. 22A-113
40 ILCS 5/7-188 rep.
40 ILCS 5/7-195 rep.

Amends the Illinois Pension Code to place the investment authority of the Illinois Municipal Retirement Fund under the Illinois State Board of Investment, beginning no later than January 1, 2006. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

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 Illinois Pension Code is amended by changing Sections 7-190, 7-201, 7-201.1, and 22A-113 as follows:

(40 ILCS 5/7-190) (from Ch. 108 1/2, par. 7-190)

Sec. 7-190. To fix compensation of employees. To determine and fix the rate of compensation to be paid to the executive director, actuary, investment counsel (until January 1, 2006), auditor, legal or medical counsel, and employees.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/7-201) (from Ch. 108 1/2, par. 7-201)

Sec. 7-201. Investment authority.

(a) This subsection (a) applies until the date on which the investments of the Fund are transferred to the Illinois State Board of Investment in accordance with Section 7-201.1, but in no event later than January 1, 2006.

The assets of the fund in excess of the amount of cash required for current operation as determined by the board shall be invested, subject to the requirements and restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111, 1-114 and 1-115 of this Code.

No bank or savings and loan association shall receive investment funds as permitted by this Section, unless it has complied with the requirements established pursuant to Section 6 of "An Act relating to certain investments of public funds by public agencies", approved July 23, 1943, as now or hereafter amended. The limitations set forth in such Section 6 shall be applicable only at the time of investment and shall not require the liquidation of any investment at any time.

The board may sell any security belonging to the fund at any time in its judgment that it is necessary or desirable to do so.

The board shall have the authority to enter into such agreements and to execute such documents as it determines to be necessary to complete any investment transaction.

All investments shall be clearly held and accounted for to indicate ownership by the board. The board may direct the registration of securities or the holding of interests in real property in its own name or in the name of a nominee created for the express purpose of registration of securities or the holding of interests in real property by a savings and loan association or national or State bank or trust company authorized to conduct a trust business in the State of Illinois. The board may hold title to interests in real property in the name of the Fund or in the name of a title holding corporation created for the express purpose of holding title to interests in real property.

Investments shall be carried at cost or at a book value in accordance with generally accepted accounting principles and accounting procedures approved by the board.

The book value of investments held by any pension fund or retirement system in one or more commingled investment accounts shall be the cost of its units of participation in such commingled account or accounts as recorded on the books of the board.

(b) Beginning on the date on which the investments of the Fund are transferred to the Illinois State Board of Investment in accordance with Section 7-201.1, but in no event later than January 1, 2006, the authority to invest the assets of the Fund is vested in the Illinois State Board of Investment under Article 22A of this Code.

(Source: P.A. 89-136, eff. 7-14-95.)

(40 ILCS 5/7-201.1) (from Ch. 108 1/2, par. 7-201.1)

Sec. 7-201.1. Participation in commingled investment funds-Transfer of investment functions and securities.

(a) (Blank). The retirement board may invest in any commingled investment fund or funds established and maintained by the Illinois State Board of Investment under the provisions of Article 22A of this Code. The book value of all commingled equity participations plus the book value of other stock investments owned by this system shall not exceed the maximum permissible percentage rate for equity investments prescribed in Section 7-201. All commingled fund participations shall be subject to the law governing the Illinois State Board of Investment and the rules, policies and directives of that Board.

(b) On or before January 1, 2006, the The retirement board shall may, by resolution duly adopted by a majority vote of its membership, transfer to the Illinois State Board of Investment created by Article 22A of this Code, for management and administration, all investments owned by the Fund of every kind and character. Upon completion of such transfer, the authority of the retirement board to make investments shall terminate. Thereafter, all investments of the reserves of the Fund shall be made by the Illinois State Board of Investment in accordance with the provisions of Article 22A of this Code.

Such transfer shall be made not later than the first day of the fourth month next following the date of such resolution. Before such transfer an audit of such investments shall be completed by a certified public accountant selected by the Illinois State Board of Investment and approved by the Auditor General of the State of Illinois. The expense of such audit shall be defrayed by the retirement board.

(Source: P.A. 78-645.)

(40 ILCS 5/22A-113) (from Ch. 108 1/2, par. 22A-113)

Sec. 22A-113. Transfer of securities and investment functions.

(a) As soon as possible or practicable following the enactment of this Article and prior to July 1, 1970, the trustees of the State Employees' Retirement System, the General Assembly Retirement System and the Judges Retirement System, shall transfer to this board for management and investment all of their securities or for which commitments have been made, and all funds, assets or moneys representing permanent or temporary investments, or cash reserves maintained for the purpose of obtaining income thereon.

(a-5) On or before January 1, 2006, the retirement board of the Illinois Municipal Retirement Fund shall transfer to this Board for management and investment all investments owned by the Fund of every kind and character.

(b) The board of trustees or retirement board of any pension fund or retirement system electing to come under the authority of the Illinois State Board of Investment for the management of its investments and the performance of investment functions previously performed by such board of that pension fund or retirement system shall effect a transfer of securities and other assets thereof not later than the first day of the 4th month next following the date of such election, or as otherwise provided by law, after completion of an audit by a certified public accountant of such securities and other assets as authorized by the Illinois State Board of Investment and approved by the Auditor General of the State, the expense of which shall be assumed by the pension fund or retirement system. Upon such transfer, the authority of the The Illinois State Board of Investment in the case of such pension fund or retirement system is effective. These transfers shall be receipted for in detail by the Chairman and director of the board.

(c) The board of trustees or retirement board of any pension fund or retirement system authorized under the Illinois Pension Code to participate in any commingled investment fund or funds established and managed by the Illinois State Board of Investment under this Article may invest in such commingled investment fund or funds upon written notice to the Illinois State Board of Investment. The board of trustees of the Illinois Bank Examiners' Education Foundation is authorized to participate in any commingled investment fund or funds established and managed by the Illinois State Board of Investment upon providing written notice to the Illinois State Board of Investment. Any participation in a commingled fund and the management thereof shall be in accordance with the governing law and the rules, policies and directives of the Illinois State Board of Investment.

(Source: P.A. 84-1127.)

(40 ILCS 5/7-188 rep.)

(40 ILCS 5/7-195 rep.)

Section 10. The Illinois Pension Code is amended by repealing Sections 7-188 and 7-195 on January 1, 2006.

Section 99. Effective date. This Act takes effect upon becoming law.