Public Act 90-0019 of the 90th General Assembly
Public Act 90-0019
HB0366 Enrolled LRB9001590EGfg
AN ACT to amend the Illinois Pension Code.
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 1-116, 15-167, 16-179, 17-146, 17-146.1,
22A-112, and 22A-114 and adding Section 1-118 as follows:
(40 ILCS 5/1-116) (from Ch. 108 1/2, par. 1-116)
Sec. 1-116. Federal benefit limitation.
(a) This Section applies shall apply only to all pension
funds and retirement systems established under this Code
Article 2, 7, 8, 9, 11, 13, 14, 15, 16 or 18.
(b) If any benefit payable by a pension fund or
retirement system subject to this Section exceeds the
applicable benefit limits set by Section 415 of the U.S.
Internal Revenue Code of 1986 for tax qualified plans under
Section 401(a) of that Code, the excess shall be payable only
from an excess benefit fund established under this Section in
accordance with federal law.
(c) An excess benefit fund shall be established by any
pension fund or retirement system subject to this Section
that has any member eligible to receive a benefit that
exceeds the applicable benefit limits set by Section 415 of
the U.S. Internal Revenue Code of 1986 for tax qualified
plans under Section 401(a) of that Code. Amounts shall be
credited to the excess benefit fund, and payments for excess
benefits made from the excess benefit fund, in a manner
consistent with the applicable federal law.
(d) For purposes of matters relating to the benefit
limits set by Section 415 of the U.S. Internal Revenue Code
of 1986, the limitation year may be defined by each affected
pension fund or retirement system for that fund or system.
(Source: P.A. 86-1488; 87-794; 87-1265.)
(40 ILCS 5/1-118 new)
Sec. 1-118. Veterans' rights. All pension funds and
retirement systems subject to this Code shall comply with the
requirements imposed on them by the federal Uniformed
Services Employment and Reemployment Rights Act (P.L.
103-353).
(40 ILCS 5/15-167) (from Ch. 108 1/2, par. 15-167)
Sec. 15-167. To invest money. To invest the funds of
the system, 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 and to invest in real estate acquired by
purchase, gift, condemnation or otherwise, and any office
building or buildings existing or to be constructed thereon,
including any additions thereto or expansions thereof, for
the use of the system. The board may lease surplus space in
any of the buildings and use rental proceeds for operation,
maintenance, improving, expanding and furnishing of the
buildings or for any other lawful system purpose.
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 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 in its own name or in the name of
a nominee created for the express purpose of registration of
securities by a national or state bank or trust company
authorized to conduct a trust business in the State of
Illinois.
Investments shall be carried at cost or at a book value
determined in accordance with generally accepted accounting
principles and accounting procedures approved by the Board.
No adjustments shall be made in investment carrying values
for ordinary current market price fluctuations; but reserves
may be provided to account for possible losses or unrealized
gains as determined by the board.
The book value of investments held by the 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.
All additions to assets from income, interest, and
dividends from investments shall be used to pay benefits,
operating and administrative expenses of the system, debt
service, including any redemption premium, on any bonds
issued by the board, expenses incurred or deposits required
in connection with such bonds, and such other costs as may be
provided in accordance with this Article.
(Source: P.A. 86-1034.)
(40 ILCS 5/16-179) (from Ch. 108 1/2, par. 16-179)
Sec. 16-179. To be trustee of reserves and to invest
funds. To be the trustee of the reserves created under this
Article, and to invest and reinvest such reserves, 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.
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 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 system. The board may direct
the registration of securities or the holding in interests in
real property in the name of the system or in the name of a
nominee created for the express purpose of registration of
securities or holding interests in real property by a
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
system 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
determined in accordance with generally accepted accounting
principles. No adjustments shall be made in investment
carrying values for ordinary current market price
fluctuations; but reserves may be provided to account for
possible losses or unrealized gains.
The book value of investments held by the retirement
system in one or more commingled investment accounts shall be
the cost of its units of participation in such commingled
account or accounts.
(Source: P.A. 86-272.)
(40 ILCS 5/17-146) (from Ch. 108 1/2, par. 17-146)
Sec. 17-146. To make investments. To invest the moneys
of the fund, subject to the requirements and restrictions set
forth in this Article and in Sections 1-109, 1-109.1,
1-109.2, 1-110, 1-111, 1-114 and 1-115. The total book value
of all stocks and convertible debt owned by the fund shall
not exceed 50% of the aggregate book value of all investments
of the fund, calculated on the basis of amortized cost.
No bank or savings and loan association shall receive
investment funds as permitted by this Section, unless it has
complied with the requirements established pursuant to
Section 6 of the Public Funds Investment Act. Those
requirements shall be applicable only at the time of
investment and shall not require the liquidation of any
investment at any time.
The board shall have the authority to enter into any
agreements and to execute any documents that it determines to
be necessary to complete any investment transaction.
All investments shall be clearly held and accounted for
to indicate ownership by the fund. The board may direct the
registration of securities or the holding of interests in
real property in the name of the fund or in the name of a
nominee created for the express purpose of registering
securities or holding interests in real property by a
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
determined in accordance with generally accepted accounting
principles and accounting procedures approved by the board.
No adjustments shall be made in investment carrying values
for ordinary current market price fluctuations, but reserves
may be provided to account for possible losses or unrealized
gains.
The book value of investments held by the fund in one or
more commingled investment accounts shall be determined in
accordance with generally accepted accounting principles the
cost of its units of participation in those commingled
account or accounts.
The board of trustees of any fund established under this
Article may not transfer its investment authority, nor
transfer the assets of the fund to any other person or entity
for the purpose of consolidating or merging its assets and
management with any other pension fund or public investment
authority, unless the board resolution authorizing such
transfer is submitted for approval to the contributors and
pensioners of the fund at elections held not less than 30
days after the adoption of such resolution by the board, and
such resolution is approved by a majority of the votes cast
on the question in both the contributors election and the
pensioners election. The election procedures and
qualifications governing the election of trustees shall
govern the submission of resolutions for approval under this
paragraph, insofar as they may be made applicable.
(Source: P.A. 89-636, eff. 8-9-96.)
(40 ILCS 5/17-146.1) (from Ch. 108 1/2, par. 17-146.1)
Sec. 17-146.1. Participation in commingled investment
funds; transfer of investment functions and securities.
(a) 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 17-146. 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) The retirement board 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-112) (from Ch. 108 1/2, par. 22A-112)
Sec. 22A-112. Investment authority. The board shall have
the authority to invest funds, subject to the requirements
and restrictions set forth in Sections 1-109, 1-109.1,
1-109.2, 1-110, 1-111, 1-114 and 1-115 of this Code.
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 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 in its own name or in the name of
a nominee created for the express purpose of registration of
securities by a national or state bank or trust company
authorized to conduct a trust business and domiciled in the
State of Illinois.
Investments shall be carried at cost or at a book value
determined in accordance with generally accepted accounting
principles and accounting procedures approved by the board.
No adjustments shall be made in investment carrying values
for ordinary current market price fluctuations; but reserves
may be provided to account for possible losses or unrealized
gains as determined by the board.
The book value of investments held by any pension fund,
retirement system or education fund in one or more commingled
investment accounts shall be determined in accordance with
generally accepted accounting principles the cost of its
units of participation in such commingled account or accounts
as recorded on the books of the board.
(Source: P.A. 84-1127.)
(40 ILCS 5/22A-114) (from Ch. 108 1/2, par. 22A-114)
Sec. 22A-114. Accounting. In the management of pension
and education funds the board:
(1) may, for investment purposes, commingle all or a
part of the invested assets of one or more pension or
education funds under its jurisdiction and authority;
(2) shall, unless it directs otherwise, carry assets of
all funds at amortized cost or a book value determined in
accordance with generally accepted accounting principles and
accounting procedures approved by the board as to fixed
income securities and original cost as to common and
preferred stock or other equity property. Each investment
initially transferred to the board by a pension fund or
monies transferred to the board by an education fund shall be
similarly valued except that the board may elect to place
such value on any investment conditionally in which case the
amount of any later realization of such asset in cash that is
in excess of or is less than the amount so credited shall be
credited or charged to the fund that made the transfer;
(3) shall keep proper books of account which shall
reflect at all times the value of all investments held by the
board for a pension fund or education fund whether for the
separate account of the fund or in a commingled fund;
(4) shall charge each pension fund or education fund
with its share of all expenses of the board (including those
repayable under Section 22A-116) at quarter-yearly periods
pro rata according to the value of the investments held for
the respective funds at the beginning of the quarter or any
other equitable formula;
(5) shall charge all distributions made by the board to
or for a pension fund or education fund to the account
maintained for that fund.
(Source: P.A. 84-1127.)
Section 99. Effective date. This Act takes effect upon
becoming law.