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91_SB1103ham001
LRB9102714EGfgam05
1 AMENDMENT TO SENATE BILL 1103
2 AMENDMENT NO. . Amend Senate Bill 1103 by replacing
3 the title with the following:
4 "AN ACT to amend the Illinois Pension Code."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 5. The Illinois Pension Code is amended by
8 changing Sections 1-113.5, 2-110, 2-117, and 7-139.1 as
9 follows:
10 (40 ILCS 5/1-113.5)
11 Sec. 1-113.5. Investment advisers and investment
12 services.
13 (a) The board of trustees of a pension fund may appoint
14 investment advisers as defined in Section 1-101.4. The board
15 of any pension fund investing in common or preferred stock
16 under Section 1-113.4 shall appoint an investment adviser
17 before making such investments.
18 The investment adviser shall be a fiduciary, as defined
19 in Section 1-101.2, with respect to the pension fund and
20 shall be one of the following:
21 (1) an investment adviser registered under the
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1 federal Investment Advisers Act of 1940 who meets any
2 applicable requirements of the Illinois Securities Law of
3 1953 or is registered under and the Illinois Securities
4 Law of 1953;
5 (2) a bank or trust company authorized to conduct a
6 trust business in Illinois;
7 (3) a life insurance company authorized to transact
8 business in Illinois; or
9 (4) an investment company as defined and registered
10 under the federal Investment Company Act of 1940 and
11 registered under the Illinois Securities Law of 1953.
12 (b) All investment advice and services provided by an
13 investment adviser appointed under this Section shall be
14 rendered pursuant to a written contract between the
15 investment adviser and the board, and in accordance with the
16 board's investment policy.
17 The contract shall include all of the following:
18 (1) acknowledgement in writing by the investment
19 adviser that he or she is a fiduciary with respect to the
20 pension fund;
21 (2) the board's investment policy;
22 (3) full disclosure of direct and indirect fees,
23 commissions, penalties, and any other compensation that
24 may be received by the investment adviser, including
25 reimbursement for expenses; and
26 (4) a requirement that the investment adviser
27 submit periodic written reports, on at least a quarterly
28 basis, for the board's review at its regularly scheduled
29 meetings. All returns on investment shall be reported as
30 net returns after payment of all fees, commissions, and
31 any other compensation.
32 (c) Within 30 days after appointing an investment
33 adviser, the board shall submit a copy of the contract to the
34 Department of Insurance.
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1 (d) Investment services provided by a person other than
2 an investment adviser appointed under this Section, including
3 but not limited to services provided by the kinds of persons
4 listed in items (1) through (4) of subsection (a), shall be
5 rendered only after full written disclosure of direct and
6 indirect fees, commissions, penalties, and any other
7 compensation that shall or may be received by the person
8 rendering those services.
9 (e) The board of trustees of each pension fund shall
10 retain records of investment transactions in accordance with
11 the rules of the Department of Insurance.
12 (Source: P.A. 90-507, eff. 8-22-97.)
13 (40 ILCS 5/2-110) (from Ch. 108 1/2, par. 2-110)
14 Sec. 2-110. Service.
15 (A) "Service" means the period beginning on the day when
16 a person first became a member, and ending on the date under
17 consideration, excluding all intervening periods of
18 nonmembership following resignation or expiration of any term
19 of office.
20 (B) "Service" includes:
21 (a) Military service during war by a person who
22 entered such service while a member, whether rendered
23 before or after the expiration of any term of office;
24 plus up to 2 years of military service that need not have
25 immediately followed service as a member, and need not
26 have been served during wartime, provided that the member
27 makes contributions to the System for such service (1) at
28 the rates provided in Section 2-126 based upon the
29 member's rate of compensation on the last date as a
30 participant prior to such military service, or on the
31 first date as a participant after such military service,
32 whichever is greater, plus (2) if payment is made on or
33 after May 1, 1993, an amount determined by the Board to
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1 be equal to the employer's normal cost of the benefits
2 accrued for such military service, plus (3) interest at
3 the effective rate from the date of first membership in
4 the System to the date of payment.
5 The amendment to this subdivision (B)(a) made by
6 this amendatory Act of 1993 shall apply to persons who
7 are active contributors to the System on or after
8 November 30, 1992. A person who was an active
9 contributor to the System on November 30, 1992 but is no
10 longer an active contributor may apply to purchase
11 military credit under this subdivision (B)(a) within 60
12 days after the effective date of this amendatory Act of
13 1993; if the person is an annuitant, the resulting
14 increase in annuity shall begin to accrue on the first
15 day of the month following the month in which the
16 required payment is received by the System. The change
17 in the required contribution for purchased military
18 credit made by this amendatory Act of 1993 shall not
19 entitle any person to a refund of contributions already
20 paid.
21 (b) Service as a judge of a court of this State,
22 but credit for such service is subject to the following
23 conditions: (1) such person shall have been a member for
24 at least 4 years and contributed to the system for
25 service as a judge subsequent to July 8, 1947, at the
26 rates herein provided, including interest at 2% per annum
27 to the date of payment based on the salary in effect
28 during such service; (2) the member was not an eligible
29 member of nor entitled to credit for such service in any
30 other retirement system in the State maintained in whole
31 or in part by public contributions; and (3) the last 4
32 years of service prior to retirement on annuity was
33 rendered while a member.
34 (c) Service as a participating employee under
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1 Articles 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16,
2 17 or 18 of the Illinois Pension Code. Credit for such
3 service may be established by a member and, if permitted
4 by the credit transfer Section of the appropriate
5 Article, by a former member who is not yet an annuitant,
6 and is subject to the following conditions: (1) that the
7 credits accrued under the above mentioned Articles have
8 been transferred to this system; and (2) that the member
9 has contributed to this system an amount equal to (i) the
10 contribution rate in effect for participants at the date
11 of membership in this system multiplied by the salary
12 then in effect for members of the General Assembly for
13 each year of service for which credit is being
14 transferred, plus (ii) the State's share of the normal
15 cost of benefits under this system expressed as a percent
16 of payroll, as determined by the system's actuary as of
17 the date of the participant's membership in this system,
18 multiplied by the salary then in effect for members of
19 the General Assembly, for each year of service for which
20 credit is being transferred, plus (iii) interest on items
21 (i) and (ii) above at 6% per annum compounded annually,
22 from the date of membership to the date of payment by the
23 participant, less (iv) the amount transferred to this
24 system on behalf of the participant on account of service
25 rendered while a participant under the above mentioned
26 Articles.
27 (d) Service, before October 1, 1975, as an officer
28 elected by the people of Illinois, for which creditable
29 service is required to be transferred from the State
30 Employees' Retirement System to this system by this
31 amendatory Act of 1975.
32 (e) Service rendered prior to January 1, 1964, as a
33 justice of the peace or police magistrate or as a civil
34 referee in the Municipal Court of Chicago, but credit for
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1 such service may not be granted until the member has paid
2 to the system an amount equal to (1) the contribution
3 rate for participants at the date of membership in this
4 system multiplied by the salary then in effect for
5 members of the General Assembly for each year of service
6 for which credit is being transferred, plus (2) the
7 State's share of the normal cost of benefits under this
8 system expressed as a percent of payroll, as determined
9 by the system's actuary as of the date of the
10 participant's membership in this system, multiplied by
11 the salary then in effect for members of the General
12 Assembly, for each year of service for which credit is
13 allowed, plus, (3) interest on (1) and (2) above at 6%
14 per annum compounded annually from the date of membership
15 to the date of payment by the member. However, a
16 participant may not receive more than 6 years of credit
17 for such service nor may any member receive credit under
18 this paragraph for service for which credit has been
19 granted in any other public pension fund or retirement
20 system in the State.
21 (f) Service before January 16, 1981, as an officer
22 elected by the people of Illinois, for which creditable
23 service is transferred from the State Employees'
24 Retirement System to this system.
25 (C) Service during any fraction of a month shall be
26 considered as a month of service.
27 Service includes the total period of time for which a
28 participant is elected as a member or officer, even though he
29 or she does not complete the term because of death,
30 resignation, judicial decision, or operation of law, provided
31 that the contributions required under this Article for such
32 entire period of office have been made by or on behalf of the
33 participant. In the case of a participant appointed or
34 elected to fill a vacancy, service includes the total period
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1 from January 1 of the year in which his or her service
2 commences to the end of the term in which the vacancy occurs,
3 provided the participant contributes in the year of
4 appointment an amount equal to the contributions that would
5 have been required had the participant received salary for
6 the entire year. The foregoing provisions relating to a
7 participant appointed or elected to fill a vacancy shall not
8 apply if the participant was a member of the other
9 legislative chamber at the time of appointment or election.
10 (D) Notwithstanding the other provisions of this
11 Section, if application to transfer or establish service
12 credit under paragraph (c) or (e) of subsection (B) of this
13 Section is made between January 1, 1992 and February 1, 1993,
14 or in the case of a participant who was serving as Attorney
15 General on May 1, 1999, if application is made between the
16 effective date of this amendatory Act of the 91st General
17 Assembly and July 1, 2000, the contribution required for such
18 credit shall be an amount equal to (1) the contribution rate
19 in effect for participants at the date of membership in this
20 system multiplied by the salary then in effect for members of
21 the General Assembly for each year of service for which
22 credit is being granted, plus (2) interest thereon at 6% per
23 annum compounded annually, from the date of membership to the
24 date of payment by the member, less (3) any amount
25 transferred to this system on behalf of the member on account
26 of such service credit.
27 The amendment to this subsection (D) made by this
28 amendatory Act of the 91st General Assembly applies without
29 regard to whether the applicant is in service on or after its
30 effective date, so long as the applicant has not yet begun to
31 receive a retirement annuity under this Article. The change
32 in the required contribution made by this amendatory Act does
33 not entitle any person to a refund of contributions already
34 paid.
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1 (Source: P.A. 86-27; 86-1028; 87-794; 87-1265.)
2 (40 ILCS 5/2-117) (from Ch. 108 1/2, par. 2-117)
3 Sec. 2-117. Participants - Election not to participate.
4 (a) Every person who was a member on November 1, 1947,
5 or in military service on such date, is subject to the
6 provisions of this system beginning upon such date, unless
7 prior to such date he or she filed with the board a written
8 notice of election not to participate.
9 Every person who becomes a member after November 1, 1947,
10 and who is then not a participant becomes a participant
11 beginning upon the date of becoming a member unless, within
12 24 months from that date, he or she has filed with the board
13 a written notice of election not to participate.
14 (b) A member who has filed notice of an election not to
15 participate (and a former member who has not yet begun to
16 receive a retirement annuity under this Article) may become a
17 participant with respect to the period for which the member
18 elected not to participate upon filing with the board, before
19 July 1, 2000 April 1, 1993, a written rescission of the
20 election not to participate. Upon contributing an amount
21 equal to the contributions he or she would have made as a
22 participant from November 1, 1947, or the date of becoming a
23 member, whichever is later, to the date of becoming a
24 participant, with interest at the rate of 4% per annum until
25 the contributions are paid, the participant shall receive
26 credit for service as a member prior to the date of the
27 rescission, both before and after November 1, 1947. The
28 required contributions shall be made before commencement of
29 the retirement annuity; otherwise no credit for service prior
30 to the date of participation shall be granted.
31 (Source: P.A. 86-273; 87-1265.)
32 (40 ILCS 5/7-139.1) (from Ch. 108 1/2, par. 7-139.1)
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1 Sec. 7-139.1. General Assembly transfers and credits.
2 (a) Any active member of the General Assembly Retirement
3 System (and until July 1, 2000 February 1, 1993, any former
4 member of that System who has not yet retired) may apply for
5 transfer of his credits and creditable service accumulated
6 under this Fund to the General Assembly Retirement System.
7 Also, any active member of the State Employees' Retirement
8 System of Illinois who is an officer of the General Assembly
9 may apply for a similar transfer from this Fund, provided
10 that such member received credit under this Fund as an
11 elected county officer. Such credits and creditable service
12 shall be transferred forthwith. Payment by this Fund to the
13 General Assembly Retirement System or the State Employees'
14 Retirement System shall be made at the same time and shall
15 consist of:
16 (1) the amounts accumulated to the credit of the
17 applicant, including interest, on the books of the Fund
18 on the date of transfer, but excluding any additional or
19 optional credits, which credits shall be refunded to the
20 applicant; and
21 (2) municipality credits computed and credited
22 under Section 7-139, including interest, on the books of
23 the Fund on the date the member terminated service under
24 the Fund.
25 Participation in this Fund as to any credits transferred
26 under this Section shall terminate on the date of transfer.
27 (b) An active member of the General Assembly Retirement
28 System (and until July 1, 2000 February 1, 1993, any former
29 member of that System who has not yet retired) who has
30 service credits and creditable service under the Fund may
31 establish additional service credits and creditable service
32 for periods during which he was an elected official and could
33 have elected to participate but did not so elect. Service
34 credits and creditable service may be established by payment
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1 to the fund of an amount equal to the contributions he would
2 have made if he had elected to participate, plus interest to
3 the date of payment. The limitations in subparagraph (c) of
4 Section 7-139 of this Article shall not apply to payments
5 made under this Section.
6 (c) An active member of the General Assembly Retirement
7 System (and until July 1, 2000 February 1, 1993, any former
8 member of that System who has not yet retired) may reinstate
9 service and service credits terminated upon receipt of a
10 separation benefit, by payment to the Fund of the amount of
11 the separation benefit plus interest thereon to the date of
12 payment.
13 (Source: P.A. 87-794.)
14 Section 99. Effective date. This Act takes effect upon
15 becoming law.".