Illinois General Assembly - Full Text of HB5488
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Full Text of HB5488  100th General Assembly




State of Illinois
2017 and 2018


Introduced , by Rep. Thomas Morrison


40 ILCS 5/1A-104

    Amends the Illinois Pension Code. Changes the schedule for examinations of pension funds established under the Downstate Police or Downstate Fire Article from every 3 years to a periodic basis, as determined by the Public Pension Division of the Department of Insurance. Provides that the examination may (instead of shall) include a review of certain information. Effective immediately.

LRB100 20811 RPS 36302 b






HB5488LRB100 20811 RPS 36302 b

1    AN ACT concerning public employee benefits.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Pension Code is amended by changing
5Section 1A-104 as follows:
6    (40 ILCS 5/1A-104)
7    Sec. 1A-104. Examinations and investigations.
8    (a) The Division shall make periodic examinations and
9investigations of all pension funds established under this Code
10and maintained for the benefit of employees and officers of
11governmental units in the State of Illinois. However, in lieu
12of making an examination and investigation, the Division may
13accept and rely upon a report of audit or examination of any
14pension fund made by an independent certified public accountant
15pursuant to the provisions of the Article of this Code
16governing the pension fund. The acceptance of the report of
17audit or examination does not bar the Division from making a
18further audit, examination, and investigation if deemed
19necessary by the Division.
20    The Department may implement a flexible system of
21examinations under which it directs resources as it deems
22necessary or appropriate. In consultation with the pension fund
23being examined, the Division may retain attorneys, independent



HB5488- 2 -LRB100 20811 RPS 36302 b

1actuaries, independent certified public accountants, and other
2professionals and specialists as examiners, the cost of which
3(except in the case of pension funds established under Article
43 or 4) shall be borne by the pension fund that is the subject
5of the examination.
6    (b) The Division shall examine or investigate each pension
7fund established under Article 3 or Article 4 of this Code. The
8schedule of each examination shall be on a periodic basis as
9determined by the Division based on a risk review across funds
10such that each fund shall be examined once every 3 years.
11    Each examination may shall include, but is not limited to,
12a review of the following:
13        (1) an audit of financial transactions, investment
14    policies, and procedures;
15        (2) an examination of books, records, documents,
16    files, and other pertinent memoranda relating to
17    financial, statistical, and administrative operations;
18        (3) a review of policies and procedures maintained for
19    the administration and operation of the pension fund;
20        (4) a determination of whether or not full effect is
21    being given to the statutory provisions governing the
22    operation of the pension fund;
23        (5) a determination of whether or not the
24    administrative policies in force are in accord with the
25    purposes of the statutory provisions and effectively
26    protect and preserve the rights and equities of the



HB5488- 3 -LRB100 20811 RPS 36302 b

1    participants;
2        (6) a determination of whether or not proper financial
3    and statistical records have been established and adequate
4    documentary evidence is recorded and maintained in support
5    of the several types of annuity and benefit payments being
6    made; and
7        (7) a determination of whether or not the calculations
8    made by the fund for the payment of all annuities and
9    benefits are accurate.
10    In addition, the Division may conduct investigations,
11which shall be identified as such and which may include one or
12more of the items listed in this subsection.
13    A copy of the report of examination or investigation as
14prepared by the Division shall be submitted to the secretary of
15the board of trustees of the pension fund examined or
16investigated and to the chief executive officer of the
17municipality. The Director, upon request, shall grant a hearing
18to the officers or trustees of the pension fund or their duly
19appointed representatives, upon any facts contained in the
20report of examination. The hearing shall be conducted before
21filing the report or making public any information contained in
22the report. The Director may withhold the report from public
23inspection for up to 60 days following the hearing.
24(Source: P.A. 95-950, eff. 8-29-08.)
25    Section 99. Effective date. This Act takes effect upon
26becoming law.