(40 ILCS 5/1‑101)(from Ch. 108 1/2, par. 1‑101) Sec. 1‑101. Short title. This Code shall be known and may be cited as the Illinois Pension Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑101.1)(from Ch. 108 1/2, par. 1‑101.1) Sec. 1‑101.1. Definitions. For purposes of this Article, unless the context otherwise requires, the words defined in the Sections following this Section and preceding Section 1‑102 shall have meanings given in those Sections. (Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.2) Sec. 1‑101.2. Fiduciary. A person is a "fiduciary" with respect to a pension fund or retirement system established under this Code to the extent that the person: (1) exercises any discretionary authority or
discretionary control respecting management of the pension fund or retirement system, or exercises any authority or control respecting management or disposition of its assets;
(2) renders investment advice or renders advice on
the selection of fiduciaries for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the pension fund or retirement system, or has any authority or responsibility to do so; or
(3) has any discretionary authority or discretionary
responsibility in the administration of the pension fund or retirement system.
(Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑101.3) Sec. 1‑101.3. Party in interest. A person is a "party in interest" with respect to a pension fund or retirement system established under this Code if the person is: (1) a fiduciary, counsel, or employee of the pension
fund or retirement system, or a relative of such a person;
(2) a person providing services to the pension fund
or retirement system, or a relative of such a person;
(3) an employer, any of whose employees are covered
by the pension fund or retirement system;
(4) an employee organization, any members of which
are covered by the pension fund or retirement system; or
(5) an employee, officer, or director (or an
individual having powers or responsibilities similar to those of an officer or director) of the pension fund or retirement system or of a person described under item (2), (3), or (4) of this Section.
(Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.4) Sec. 1‑101.4. Investment adviser. A person is an "investment adviser", "investment advisor", or "investment manager" with respect to a pension fund or retirement system established under this Code if the person: (1) is a fiduciary appointed by the board of
trustees of the pension fund or retirement system in accordance with Section 1‑109.1;
(2) has the power to manage, acquire, or dispose of
any asset of the retirement system or pension fund;
(3) has acknowledged in writing that he or she is a
fiduciary with respect to the pension fund or retirement system; and
(4) is at least one of the following: (i) registered
as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b‑1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.
(Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.5) Sec. 1‑101.5. Consultant. "Consultant" means any person or entity retained or employed
by the board of a retirement system, pension fund, or investment board to make recommendations in developing an investment strategy, assist with finding appropriate investment advisers, or monitor the board's investments. "Consultant" does not include non‑investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy‑voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships. "Investment adviser" has the meaning ascribed to it in Section 1‑101.4.
(Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑102)(from Ch. 108 1/2, par. 1‑102) Sec. 1‑102. Continuation of prior statutes. The provisions of this Code insofar as they are the same or substantially the same as those of any prior statute, shall be construed as a continuation of such prior statute and not as a new enactment. If in any other statute reference is made to an Act of the General Assembly, or a Section of such an Act, which is continued in this Code, such reference shall be held to refer to the Act or Section thereof so continued in this Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑103)(from Ch. 108 1/2, par. 1‑103) Sec. 1‑103. Effect of headings. Article, Division and Section headings contained herein shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions of any Article, Division or Section hereof. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑103.1)(from Ch. 108 1/2, par. 1‑103.1) Sec. 1‑103.1. Application of amendments. Amendments to this Code which have been or may be enacted shall be applicable only to persons who, on or after the effective date thereof, are in service as an employee under the retirement system or pension fund covered by the Article which is amended, unless the amendatory Act specifies otherwise. (Source: P. A. 77‑1415.)
(40 ILCS 5/1‑103.2)(from Ch. 108 1/2, par. 1‑103.2) Sec. 1‑103.2. The amendatory provisions of this amendatory Act of 1987 which provide for benefit increases effective July 1, 1987 or January 1, 1988 are intended to be retroactive to the dates specified therein, notwithstanding the provisions of Section 1‑103.1. (Source: P.A. 85‑941.)
(40 ILCS 5/1‑103.3) Sec. 1‑103.3. Application of 1994 amendment; funding standard. (a) The provisions of this amendatory Act of 1994 that change the method of calculating, certifying, and paying the required State contributions to the retirement systems established under Articles 2, 14, 15, 16, and 18 shall first apply to the State contributions required for State fiscal year 1996. (b) The General Assembly declares that a funding ratio (the ratio of a retirement system's total assets to its total actuarial liabilities) of 90% is an appropriate goal for State‑funded retirement systems in Illinois, and it finds that a funding ratio of 90% is now the generally‑recognized norm throughout the nation for public employee retirement systems that are considered to be financially secure and funded in an appropriate and responsible manner. (c) Every 5 years, beginning in 1999, the Commission on Government Forecasting and Accountability, in consultation with the affected retirement systems and the Governor's Office of Management and Budget (formerly Bureau of the Budget), shall consider and determine whether the 90% funding ratio adopted in subsection (b) continues to represent an appropriate goal for State‑funded retirement systems in Illinois, and it shall report its findings and recommendations on this subject to the Governor and the General Assembly. (Source: P.A. 93‑1067, eff. 1‑15‑05.)
(40 ILCS 5/1‑104)(from Ch. 108 1/2, par. 1‑104) Sec. 1‑104. Cross references. Where, in this Code, reference is made to a Section, Division or Article by its number and no Act is specified, the reference is to the correspondingly numbered Section, Division or Article of this Code. Where reference is made to "this Article" or "this Division" or "this Section" and no Act is specified, the reference is to the Article, Division or Section of this Code in which the reference appears. If any Section, Division or Article of this Code is hereafter amended, the reference shall thereafter be treated and considered as a reference to the Section, Division or Article as so amended. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑104.1)(from Ch. 108 1/2, par. 1‑104.1) Sec. 1‑104.1. Gender. Words or phrases as used in this Code that import the masculine gender shall be construed to import also the feminine gender, unless such construction would be inconsistent with the manifest intention of the context. (Source: P. A. 78‑1129.)
(40 ILCS 5/1‑104.2)(from Ch. 108 1/2, par. 1‑104.2) Sec. 1‑104.2. Beginning January 1, 1986, children not conceived in lawful wedlock shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because of the fact that the child was born out of wedlock; however, in cases where the father is the employee parent, paternity must first be established. Paternity may be established by any one of the following means: (1) acknowledgment by the father, or (2) adjudication before or after the death of the father, or (3) any other means acceptable to the board of trustees of the pension fund or retirement system. (Source: P.A. 94‑229, eff. 1‑1‑06.)
(40 ILCS 5/1‑104.3) Sec. 1‑104.3. Adopted children. Notwithstanding any other provision of this Code to the contrary, beginning on the effective date of this amendatory Act of the 95th General Assembly, legally adopted children shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because the child is an adopted child. The provisions of this Section apply without regard to whether the employee or member was in service on or after the date of the adoption of the child. (Source: P.A. 95‑279, eff. 1‑1‑08.)
(40 ILCS 5/1‑105)(from Ch. 108 1/2, par. 1‑105) Sec. 1‑105. Partial invalidity. The invalidity of any provision of this Code shall not affect the validity of the remainder of this Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑106)(from Ch. 108 1/2, par. 1‑106) Sec. 1‑106. Payment of distribution other than direct. (a) The board of trustees of any retirement fund or system operating under this Code may, at the written direction and request of any annuitant, solely as an accommodation to the annuitant, pay the annuity due the annuitant to a bank, savings and loan association, or any other financial institution insured by an agency of the federal government, for deposit to the account of the annuitant, or to a bank, savings and loan association, or trust company for deposit in a trust established by the annuitant for his or her benefit with that bank, savings and loan association, or trust company. The annuitant may withdraw the direction at any time. (b) Beginning January 1, 1993, each pension fund or retirement system operating under this Code may, and to the extent required by federal law shall, at the request of any person entitled to receive a refund, lump‑sum benefit, or other nonperiodic distribution from the pension fund or retirement system, pay the distribution directly to any entity that (1) is designated in writing by the person, (2) is qualified under federal law to accept an eligible rollover distribution from a qualified plan, and (3) has agreed to accept the distribution. (Source: P.A. 96‑586, eff. 8‑18‑09.)
(40 ILCS 5/1‑107)(from Ch. 108 1/2, par. 1‑107) Sec. 1‑107. Indemnification of trustees, consultants and employees of retirement systems and pension funds. Every retirement system, pension fund or other system or fund established under this Code may indemnify and protect the trustees, staff and consultants against all damage claims and suits, including defense thereof, when damages are sought for negligent or wrongful acts alleged to have been committed in the scope of employment or under the direction of the trustees. However, the trustees, staff and consultants shall not be indemnified for wilful misconduct and gross negligence. Each board is authorized to insure against loss or liability of the trustees, staff and consultants which may result from these damage claims. This insurance shall be carried in a company which is licensed to write such coverage in this State. (Source: P.A. 80‑1364.)
(40 ILCS 5/1‑108)(from Ch. 108 1/2, par. 1‑108) Sec. 1‑108. (a) In any proceeding commenced against an employee of a pension fund, alleging a civil wrong arising out of any act or omission occurring within the scope of the employee's pension fund employment, unless the court or the jury finds that the conduct which gave rise to the claim was intentional, wilful or wanton misconduct, the pension fund shall indemnify the employee for any damages awarded and court costs and attorneys' fees assessed as part of any final and unreversed judgment and any attorneys' fees, court costs and litigation expenses incurred by the employee in defending the claim. In any such proceeding if a majority of the board or trustees who are not a party to the action determine that the conduct which gave rise to the claim was not intentional, wilful or wanton misconduct, the board or trustees may agree to settlement of the proceeding and the pension fund shall indemnify the employee for any damages, court costs and attorneys' fees agreed to as part of the settlement and any attorneys' fees, court costs and litigation expenses incurred in defending the claim. (b) No employee of a pension fund shall be entitled to indemnification under this Section unless within 15 days after receipt by the employee of service of process, he shall give written notice of such proceeding to the pension fund. (c) Each pension fund may insure against loss or liability of employees which may arise as a result of these claims. This insurance shall be carried by a company authorized to provide such coverage in this State. (d) Nothing contained or implied in this Section shall operate, or be construed or applied, to deprive the State or a pension fund, or any other employee thereof, of any immunity or any defense heretofore available. (e) This Section shall apply regardless of whether the employee is sued in his or her individual or official capacity. (f) This Section shall not apply to claims for bodily injury or damage to property arising from motor vehicle accidents. (g) This Section shall apply to all proceedings filed on or after its effective date, and to any proceeding pending on its effective date, if the pension fund employee gives notice to the pension fund within 30 days of the Act's effective date. (Source: P.A. 80‑1078.)
(40 ILCS 5/1‑109)(from Ch. 108 1/2, par. 1‑109) Sec. 1‑109. Duties of Fiduciaries. A fiduciary with respect to a retirement system or pension fund established under this Code shall discharge his or her duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries and: (a) For the exclusive purpose of: (1) Providing benefits to participants and their beneficiaries; and (2) Defraying reasonable expenses of administering the retirement system or pension fund; (b) With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims; (c) By diversifying the investments of the retirement system or pension fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (d) In accordance with the provisions of the Article of the Pension Code governing the retirement system or pension fund. (Source: P.A. 82‑960.)
(40 ILCS 5/1‑109.1)(from Ch. 108 1/2, par. 1‑109.1) Sec. 1‑109.1. Allocation and Delegation of Fiduciary Duties. (1) Subject to the provisions of Section 22A‑113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may: (a) Appoint one or more investment managers as
fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and
(b) Allocate duties among themselves and designate
others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.
(2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code 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. (3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted. (4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $10,000,000,000 and is a "minority owned business", "female owned business" or "business owned by a person with a disability" as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use emerging investment managers in managing their system's assets, encompassing all asset classes, and increase the racial, ethnic, and gender diversity of its fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards. On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for utilization of emerging investment managers. This policy shall include quantifiable goals for the management of assets in specific asset classes by emerging investment managers. The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) emerging investment managers that are minority owned businesses; (ii) emerging investment managers that are female owned businesses; and (iii) emerging investment managers that are businesses owned by a person with a disability. The goals established shall be based on the percentage of total dollar amount of investment service contracts let to minority owned businesses, female owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection. If in any case an emerging investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that emerging investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple emerging investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board. The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section. (5) Each retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall establish a policy that sets forth goals for increasing the racial, ethnic, and gender diversity of its fiduciaries, including its consultants and senior staff. Each system, fund, and investment board shall annually review the goals established under this subsection. (6) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for utilization of businesses owned by minorities, females, and persons with disabilities for all contracts and services. The goals established shall be based on the percentage of total dollar amount of all contracts let to minority owned businesses, female owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection. (7) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority broker‑dealers. For the purposes of this Code, "minority broker‑dealer" means a qualified broker‑dealer who meets the definition of "minority owned business", "female owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this Section. (8) Each retirement system, pension fund, and investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall submit a report to the Governor and the General Assembly by January 1 of each year that includes the following: (i) the policy adopted under subsection (4) of this Section, including the names and addresses of the emerging investment managers used, percentage of the assets under the investment control of emerging investment managers for the 3 separate goals, and the actions it has undertaken to increase the use of emerging investment managers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises; (ii) the policy adopted under subsection (5) of this Section; (iii) the policy adopted under subsection (6) of this Section; and (iv) the policy adopted under subsection (7) of this Section, including specific actions undertaken to increase the use of minority broker‑dealers. (Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑109.2)(from Ch. 108 1/2, par. 1‑109.2) Sec. 1‑109.2. Extent of Cofiduciary Duties. (a) (1) Except to the extent otherwise required in subsection (b) of this Section, a fiduciary of a retirement system or pension fund to whom a specified duty has not been allocated shall not be responsible or liable for an act or omission, in connection with that duty, by the fiduciary to whom that duty has been allocated, except to the extent that the allocation, or the continuation thereof, is a violation of Section 1‑109 of this Code. Nothing in this paragraph (1) shall be construed to relieve a fiduciary from responsibility or liability for any act by that fiduciary. (2) Except to the extent otherwise required in subsection (b) of this Section a fiduciary shall not be responsible or liable for an act or omission, in connection with a specific fiduciary activity, by any other person who has been designated to carry out that fiduciary activity, except to the extent that the designation, or the continuation thereof at any time under the circumstances then prevailing, is a violation of Section 1‑109 of this Code. Nothing in this paragraph (2) shall be construed to relieve a fiduciary from responsibility for any act by that fiduciary. (b) With respect to any retirement system or pension fund established under this Code: (1) Each trustee shall use reasonable care to prevent any other trustee from committing a breach of duty; and (2) Subject to the provisions of Section 22A‑113 of this Code, all trustees shall jointly manage and control the assets of the retirement system or pension fund. Nothing in this subsection (b) shall be construed to attribute a duty to a trustee which would be inconsistent with the appointment of, and delegation of authority to, an investment manager in accordance with paragraph (a) of Section 1‑109.1 of this Code. (Source: P.A. 82‑960.)
(40 ILCS 5/1‑109.3) Sec. 1‑109.3. Training requirement for pension trustees. (a) All elected and appointed trustees under Article 3 and 4 of this Code must participate in a mandatory trustee certification training seminar that consists of at least 32 hours of initial trustee certification at a training facility that is accredited and affiliated with a State of Illinois certified college or university. This training must include without limitation all of the following: (1) Duties and liabilities of a fiduciary under
Article 1 of the Illinois Pension Code.
(2) Adjudication of pension claims. (3) Basic accounting and actuarial training.
(40 ILCS 5/1‑101)(from Ch. 108 1/2, par. 1‑101) Sec. 1‑101. Short title. This Code shall be known and may be cited as the Illinois Pension Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑101.1)(from Ch. 108 1/2, par. 1‑101.1) Sec. 1‑101.1. Definitions. For purposes of this Article, unless the context otherwise requires, the words defined in the Sections following this Section and preceding Section 1‑102 shall have meanings given in those Sections. (Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.2) Sec. 1‑101.2. Fiduciary. A person is a "fiduciary" with respect to a pension fund or retirement system established under this Code to the extent that the person: (1) exercises any discretionary authority or
discretionary control respecting management of the pension fund or retirement system, or exercises any authority or control respecting management or disposition of its assets;
(2) renders investment advice or renders advice on
the selection of fiduciaries for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the pension fund or retirement system, or has any authority or responsibility to do so; or
(3) has any discretionary authority or discretionary
responsibility in the administration of the pension fund or retirement system.
(Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑101.3) Sec. 1‑101.3. Party in interest. A person is a "party in interest" with respect to a pension fund or retirement system established under this Code if the person is: (1) a fiduciary, counsel, or employee of the pension
fund or retirement system, or a relative of such a person;
(2) a person providing services to the pension fund
or retirement system, or a relative of such a person;
(3) an employer, any of whose employees are covered
by the pension fund or retirement system;
(4) an employee organization, any members of which
are covered by the pension fund or retirement system; or
(5) an employee, officer, or director (or an
individual having powers or responsibilities similar to those of an officer or director) of the pension fund or retirement system or of a person described under item (2), (3), or (4) of this Section.
(Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.4) Sec. 1‑101.4. Investment adviser. A person is an "investment adviser", "investment advisor", or "investment manager" with respect to a pension fund or retirement system established under this Code if the person: (1) is a fiduciary appointed by the board of
trustees of the pension fund or retirement system in accordance with Section 1‑109.1;
(2) has the power to manage, acquire, or dispose of
any asset of the retirement system or pension fund;
(3) has acknowledged in writing that he or she is a
fiduciary with respect to the pension fund or retirement system; and
(4) is at least one of the following: (i) registered
as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b‑1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.
(Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.5) Sec. 1‑101.5. Consultant. "Consultant" means any person or entity retained or employed
by the board of a retirement system, pension fund, or investment board to make recommendations in developing an investment strategy, assist with finding appropriate investment advisers, or monitor the board's investments. "Consultant" does not include non‑investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy‑voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships. "Investment adviser" has the meaning ascribed to it in Section 1‑101.4.
(Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑102)(from Ch. 108 1/2, par. 1‑102) Sec. 1‑102. Continuation of prior statutes. The provisions of this Code insofar as they are the same or substantially the same as those of any prior statute, shall be construed as a continuation of such prior statute and not as a new enactment. If in any other statute reference is made to an Act of the General Assembly, or a Section of such an Act, which is continued in this Code, such reference shall be held to refer to the Act or Section thereof so continued in this Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑103)(from Ch. 108 1/2, par. 1‑103) Sec. 1‑103. Effect of headings. Article, Division and Section headings contained herein shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions of any Article, Division or Section hereof. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑103.1)(from Ch. 108 1/2, par. 1‑103.1) Sec. 1‑103.1. Application of amendments. Amendments to this Code which have been or may be enacted shall be applicable only to persons who, on or after the effective date thereof, are in service as an employee under the retirement system or pension fund covered by the Article which is amended, unless the amendatory Act specifies otherwise. (Source: P. A. 77‑1415.)
(40 ILCS 5/1‑103.2)(from Ch. 108 1/2, par. 1‑103.2) Sec. 1‑103.2. The amendatory provisions of this amendatory Act of 1987 which provide for benefit increases effective July 1, 1987 or January 1, 1988 are intended to be retroactive to the dates specified therein, notwithstanding the provisions of Section 1‑103.1. (Source: P.A. 85‑941.)
(40 ILCS 5/1‑103.3) Sec. 1‑103.3. Application of 1994 amendment; funding standard. (a) The provisions of this amendatory Act of 1994 that change the method of calculating, certifying, and paying the required State contributions to the retirement systems established under Articles 2, 14, 15, 16, and 18 shall first apply to the State contributions required for State fiscal year 1996. (b) The General Assembly declares that a funding ratio (the ratio of a retirement system's total assets to its total actuarial liabilities) of 90% is an appropriate goal for State‑funded retirement systems in Illinois, and it finds that a funding ratio of 90% is now the generally‑recognized norm throughout the nation for public employee retirement systems that are considered to be financially secure and funded in an appropriate and responsible manner. (c) Every 5 years, beginning in 1999, the Commission on Government Forecasting and Accountability, in consultation with the affected retirement systems and the Governor's Office of Management and Budget (formerly Bureau of the Budget), shall consider and determine whether the 90% funding ratio adopted in subsection (b) continues to represent an appropriate goal for State‑funded retirement systems in Illinois, and it shall report its findings and recommendations on this subject to the Governor and the General Assembly. (Source: P.A. 93‑1067, eff. 1‑15‑05.)
(40 ILCS 5/1‑104)(from Ch. 108 1/2, par. 1‑104) Sec. 1‑104. Cross references. Where, in this Code, reference is made to a Section, Division or Article by its number and no Act is specified, the reference is to the correspondingly numbered Section, Division or Article of this Code. Where reference is made to "this Article" or "this Division" or "this Section" and no Act is specified, the reference is to the Article, Division or Section of this Code in which the reference appears. If any Section, Division or Article of this Code is hereafter amended, the reference shall thereafter be treated and considered as a reference to the Section, Division or Article as so amended. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑104.1)(from Ch. 108 1/2, par. 1‑104.1) Sec. 1‑104.1. Gender. Words or phrases as used in this Code that import the masculine gender shall be construed to import also the feminine gender, unless such construction would be inconsistent with the manifest intention of the context. (Source: P. A. 78‑1129.)
(40 ILCS 5/1‑104.2)(from Ch. 108 1/2, par. 1‑104.2) Sec. 1‑104.2. Beginning January 1, 1986, children not conceived in lawful wedlock shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because of the fact that the child was born out of wedlock; however, in cases where the father is the employee parent, paternity must first be established. Paternity may be established by any one of the following means: (1) acknowledgment by the father, or (2) adjudication before or after the death of the father, or (3) any other means acceptable to the board of trustees of the pension fund or retirement system. (Source: P.A. 94‑229, eff. 1‑1‑06.)
(40 ILCS 5/1‑104.3) Sec. 1‑104.3. Adopted children. Notwithstanding any other provision of this Code to the contrary, beginning on the effective date of this amendatory Act of the 95th General Assembly, legally adopted children shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because the child is an adopted child. The provisions of this Section apply without regard to whether the employee or member was in service on or after the date of the adoption of the child. (Source: P.A. 95‑279, eff. 1‑1‑08.)
(40 ILCS 5/1‑105)(from Ch. 108 1/2, par. 1‑105) Sec. 1‑105. Partial invalidity. The invalidity of any provision of this Code shall not affect the validity of the remainder of this Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑106)(from Ch. 108 1/2, par. 1‑106) Sec. 1‑106. Payment of distribution other than direct. (a) The board of trustees of any retirement fund or system operating under this Code may, at the written direction and request of any annuitant, solely as an accommodation to the annuitant, pay the annuity due the annuitant to a bank, savings and loan association, or any other financial institution insured by an agency of the federal government, for deposit to the account of the annuitant, or to a bank, savings and loan association, or trust company for deposit in a trust established by the annuitant for his or her benefit with that bank, savings and loan association, or trust company. The annuitant may withdraw the direction at any time. (b) Beginning January 1, 1993, each pension fund or retirement system operating under this Code may, and to the extent required by federal law shall, at the request of any person entitled to receive a refund, lump‑sum benefit, or other nonperiodic distribution from the pension fund or retirement system, pay the distribution directly to any entity that (1) is designated in writing by the person, (2) is qualified under federal law to accept an eligible rollover distribution from a qualified plan, and (3) has agreed to accept the distribution. (Source: P.A. 96‑586, eff. 8‑18‑09.)
(40 ILCS 5/1‑107)(from Ch. 108 1/2, par. 1‑107) Sec. 1‑107. Indemnification of trustees, consultants and employees of retirement systems and pension funds. Every retirement system, pension fund or other system or fund established under this Code may indemnify and protect the trustees, staff and consultants against all damage claims and suits, including defense thereof, when damages are sought for negligent or wrongful acts alleged to have been committed in the scope of employment or under the direction of the trustees. However, the trustees, staff and consultants shall not be indemnified for wilful misconduct and gross negligence. Each board is authorized to insure against loss or liability of the trustees, staff and consultants which may result from these damage claims. This insurance shall be carried in a company which is licensed to write such coverage in this State. (Source: P.A. 80‑1364.)
(40 ILCS 5/1‑108)(from Ch. 108 1/2, par. 1‑108) Sec. 1‑108. (a) In any proceeding commenced against an employee of a pension fund, alleging a civil wrong arising out of any act or omission occurring within the scope of the employee's pension fund employment, unless the court or the jury finds that the conduct which gave rise to the claim was intentional, wilful or wanton misconduct, the pension fund shall indemnify the employee for any damages awarded and court costs and attorneys' fees assessed as part of any final and unreversed judgment and any attorneys' fees, court costs and litigation expenses incurred by the employee in defending the claim. In any such proceeding if a majority of the board or trustees who are not a party to the action determine that the conduct which gave rise to the claim was not intentional, wilful or wanton misconduct, the board or trustees may agree to settlement of the proceeding and the pension fund shall indemnify the employee for any damages, court costs and attorneys' fees agreed to as part of the settlement and any attorneys' fees, court costs and litigation expenses incurred in defending the claim. (b) No employee of a pension fund shall be entitled to indemnification under this Section unless within 15 days after receipt by the employee of service of process, he shall give written notice of such proceeding to the pension fund. (c) Each pension fund may insure against loss or liability of employees which may arise as a result of these claims. This insurance shall be carried by a company authorized to provide such coverage in this State. (d) Nothing contained or implied in this Section shall operate, or be construed or applied, to deprive the State or a pension fund, or any other employee thereof, of any immunity or any defense heretofore available. (e) This Section shall apply regardless of whether the employee is sued in his or her individual or official capacity. (f) This Section shall not apply to claims for bodily injury or damage to property arising from motor vehicle accidents. (g) This Section shall apply to all proceedings filed on or after its effective date, and to any proceeding pending on its effective date, if the pension fund employee gives notice to the pension fund within 30 days of the Act's effective date. (Source: P.A. 80‑1078.)
(40 ILCS 5/1‑109)(from Ch. 108 1/2, par. 1‑109) Sec. 1‑109. Duties of Fiduciaries. A fiduciary with respect to a retirement system or pension fund established under this Code shall discharge his or her duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries and: (a) For the exclusive purpose of: (1) Providing benefits to participants and their beneficiaries; and (2) Defraying reasonable expenses of administering the retirement system or pension fund; (b) With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims; (c) By diversifying the investments of the retirement system or pension fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (d) In accordance with the provisions of the Article of the Pension Code governing the retirement system or pension fund. (Source: P.A. 82‑960.)
(40 ILCS 5/1‑109.1)(from Ch. 108 1/2, par. 1‑109.1) Sec. 1‑109.1. Allocation and Delegation of Fiduciary Duties. (1) Subject to the provisions of Section 22A‑113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may: (a) Appoint one or more investment managers as
fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and
(b) Allocate duties among themselves and designate
others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.
(2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code 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. (3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted. (4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $10,000,000,000 and is a "minority owned business", "female owned business" or "business owned by a person with a disability" as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use emerging investment managers in managing their system's assets, encompassing all asset classes, and increase the racial, ethnic, and gender diversity of its fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards. On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for utilization of emerging investment managers. This policy shall include quantifiable goals for the management of assets in specific asset classes by emerging investment managers. The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) emerging investment managers that are minority owned businesses; (ii) emerging investment managers that are female owned businesses; and (iii) emerging investment managers that are businesses owned by a person with a disability. The goals established shall be based on the percentage of total dollar amount of investment service contracts let to minority owned businesses, female owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection. If in any case an emerging investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that emerging investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple emerging investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board. The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section. (5) Each retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall establish a policy that sets forth goals for increasing the racial, ethnic, and gender diversity of its fiduciaries, including its consultants and senior staff. Each system, fund, and investment board shall annually review the goals established under this subsection. (6) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for utilization of businesses owned by minorities, females, and persons with disabilities for all contracts and services. The goals established shall be based on the percentage of total dollar amount of all contracts let to minority owned businesses, female owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection. (7) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority broker‑dealers. For the purposes of this Code, "minority broker‑dealer" means a qualified broker‑dealer who meets the definition of "minority owned business", "female owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this Section. (8) Each retirement system, pension fund, and investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall submit a report to the Governor and the General Assembly by January 1 of each year that includes the following: (i) the policy adopted under subsection (4) of this Section, including the names and addresses of the emerging investment managers used, percentage of the assets under the investment control of emerging investment managers for the 3 separate goals, and the actions it has undertaken to increase the use of emerging investment managers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises; (ii) the policy adopted under subsection (5) of this Section; (iii) the policy adopted under subsection (6) of this Section; and (iv) the policy adopted under subsection (7) of this Section, including specific actions undertaken to increase the use of minority broker‑dealers. (Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑109.2)(from Ch. 108 1/2, par. 1‑109.2) Sec. 1‑109.2. Extent of Cofiduciary Duties. (a) (1) Except to the extent otherwise required in subsection (b) of this Section, a fiduciary of a retirement system or pension fund to whom a specified duty has not been allocated shall not be responsible or liable for an act or omission, in connection with that duty, by the fiduciary to whom that duty has been allocated, except to the extent that the allocation, or the continuation thereof, is a violation of Section 1‑109 of this Code. Nothing in this paragraph (1) shall be construed to relieve a fiduciary from responsibility or liability for any act by that fiduciary. (2) Except to the extent otherwise required in subsection (b) of this Section a fiduciary shall not be responsible or liable for an act or omission, in connection with a specific fiduciary activity, by any other person who has been designated to carry out that fiduciary activity, except to the extent that the designation, or the continuation thereof at any time under the circumstances then prevailing, is a violation of Section 1‑109 of this Code. Nothing in this paragraph (2) shall be construed to relieve a fiduciary from responsibility for any act by that fiduciary. (b) With respect to any retirement system or pension fund established under this Code: (1) Each trustee shall use reasonable care to prevent any other trustee from committing a breach of duty; and (2) Subject to the provisions of Section 22A‑113 of this Code, all trustees shall jointly manage and control the assets of the retirement system or pension fund. Nothing in this subsection (b) shall be construed to attribute a duty to a trustee which would be inconsistent with the appointment of, and delegation of authority to, an investment manager in accordance with paragraph (a) of Section 1‑109.1 of this Code. (Source: P.A. 82‑960.)
(40 ILCS 5/1‑109.3) Sec. 1‑109.3. Training requirement for pension trustees. (a) All elected and appointed trustees under Article 3 and 4 of this Code must participate in a mandatory trustee certification training seminar that consists of at least 32 hours of initial trustee certification at a training facility that is accredited and affiliated with a State of Illinois certified college or university. This training must include without limitation all of the following: (1) Duties and liabilities of a fiduciary under
Article 1 of the Illinois Pension Code.
(2) Adjudication of pension claims. (3) Basic accounting and actuarial training. {"@context":"https://schema.org","@graph":[{"@type":"WebPage","@id":"https://statutes.laws.com/test/","url":"https://statutes.laws.com/test/","name":"State Codes and Statutes - Statutes","isPartOf":{"@id":"https://statutes.laws.com/#website"},"datePublished":"2015-03-10T03:31:37+00:00","dateModified":"2019-12-27T23:25:16+00:00","breadcrumb":{"@id":"https://statutes.laws.com/test/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https://statutes.laws.com/test/"]}]},{"@type":"BreadcrumbList","@id":"https://statutes.laws.com/test/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://statutes.laws.com/"},{"@type":"ListItem","position":2,"name":"State Codes and Statutes"}]},{"@type":"WebSite","@id":"https://statutes.laws.com/#website","url":"https://statutes.laws.com/","name":"Statutes","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://statutes.laws.com/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"}]}
(40 ILCS 5/1‑101)(from Ch. 108 1/2, par. 1‑101) Sec. 1‑101. Short title. This Code shall be known and may be cited as the Illinois Pension Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑101.1)(from Ch. 108 1/2, par. 1‑101.1) Sec. 1‑101.1. Definitions. For purposes of this Article, unless the context otherwise requires, the words defined in the Sections following this Section and preceding Section 1‑102 shall have meanings given in those Sections. (Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.2) Sec. 1‑101.2. Fiduciary. A person is a "fiduciary" with respect to a pension fund or retirement system established under this Code to the extent that the person: (1) exercises any discretionary authority or
discretionary control respecting management of the pension fund or retirement system, or exercises any authority or control respecting management or disposition of its assets;
(2) renders investment advice or renders advice on
the selection of fiduciaries for a fee or other compensation, direct or indirect, with respect to any moneys or other property of the pension fund or retirement system, or has any authority or responsibility to do so; or
(3) has any discretionary authority or discretionary
responsibility in the administration of the pension fund or retirement system.
(Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑101.3) Sec. 1‑101.3. Party in interest. A person is a "party in interest" with respect to a pension fund or retirement system established under this Code if the person is: (1) a fiduciary, counsel, or employee of the pension
fund or retirement system, or a relative of such a person;
(2) a person providing services to the pension fund
or retirement system, or a relative of such a person;
(3) an employer, any of whose employees are covered
by the pension fund or retirement system;
(4) an employee organization, any members of which
are covered by the pension fund or retirement system; or
(5) an employee, officer, or director (or an
individual having powers or responsibilities similar to those of an officer or director) of the pension fund or retirement system or of a person described under item (2), (3), or (4) of this Section.
(Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.4) Sec. 1‑101.4. Investment adviser. A person is an "investment adviser", "investment advisor", or "investment manager" with respect to a pension fund or retirement system established under this Code if the person: (1) is a fiduciary appointed by the board of
trustees of the pension fund or retirement system in accordance with Section 1‑109.1;
(2) has the power to manage, acquire, or dispose of
any asset of the retirement system or pension fund;
(3) has acknowledged in writing that he or she is a
fiduciary with respect to the pension fund or retirement system; and
(4) is at least one of the following: (i) registered
as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b‑1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.
(Source: P.A. 90‑507, eff. 8‑22‑97.)
(40 ILCS 5/1‑101.5) Sec. 1‑101.5. Consultant. "Consultant" means any person or entity retained or employed
by the board of a retirement system, pension fund, or investment board to make recommendations in developing an investment strategy, assist with finding appropriate investment advisers, or monitor the board's investments. "Consultant" does not include non‑investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy‑voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships. "Investment adviser" has the meaning ascribed to it in Section 1‑101.4.
(Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑102)(from Ch. 108 1/2, par. 1‑102) Sec. 1‑102. Continuation of prior statutes. The provisions of this Code insofar as they are the same or substantially the same as those of any prior statute, shall be construed as a continuation of such prior statute and not as a new enactment. If in any other statute reference is made to an Act of the General Assembly, or a Section of such an Act, which is continued in this Code, such reference shall be held to refer to the Act or Section thereof so continued in this Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑103)(from Ch. 108 1/2, par. 1‑103) Sec. 1‑103. Effect of headings. Article, Division and Section headings contained herein shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions of any Article, Division or Section hereof. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑103.1)(from Ch. 108 1/2, par. 1‑103.1) Sec. 1‑103.1. Application of amendments. Amendments to this Code which have been or may be enacted shall be applicable only to persons who, on or after the effective date thereof, are in service as an employee under the retirement system or pension fund covered by the Article which is amended, unless the amendatory Act specifies otherwise. (Source: P. A. 77‑1415.)
(40 ILCS 5/1‑103.2)(from Ch. 108 1/2, par. 1‑103.2) Sec. 1‑103.2. The amendatory provisions of this amendatory Act of 1987 which provide for benefit increases effective July 1, 1987 or January 1, 1988 are intended to be retroactive to the dates specified therein, notwithstanding the provisions of Section 1‑103.1. (Source: P.A. 85‑941.)
(40 ILCS 5/1‑103.3) Sec. 1‑103.3. Application of 1994 amendment; funding standard. (a) The provisions of this amendatory Act of 1994 that change the method of calculating, certifying, and paying the required State contributions to the retirement systems established under Articles 2, 14, 15, 16, and 18 shall first apply to the State contributions required for State fiscal year 1996. (b) The General Assembly declares that a funding ratio (the ratio of a retirement system's total assets to its total actuarial liabilities) of 90% is an appropriate goal for State‑funded retirement systems in Illinois, and it finds that a funding ratio of 90% is now the generally‑recognized norm throughout the nation for public employee retirement systems that are considered to be financially secure and funded in an appropriate and responsible manner. (c) Every 5 years, beginning in 1999, the Commission on Government Forecasting and Accountability, in consultation with the affected retirement systems and the Governor's Office of Management and Budget (formerly Bureau of the Budget), shall consider and determine whether the 90% funding ratio adopted in subsection (b) continues to represent an appropriate goal for State‑funded retirement systems in Illinois, and it shall report its findings and recommendations on this subject to the Governor and the General Assembly. (Source: P.A. 93‑1067, eff. 1‑15‑05.)
(40 ILCS 5/1‑104)(from Ch. 108 1/2, par. 1‑104) Sec. 1‑104. Cross references. Where, in this Code, reference is made to a Section, Division or Article by its number and no Act is specified, the reference is to the correspondingly numbered Section, Division or Article of this Code. Where reference is made to "this Article" or "this Division" or "this Section" and no Act is specified, the reference is to the Article, Division or Section of this Code in which the reference appears. If any Section, Division or Article of this Code is hereafter amended, the reference shall thereafter be treated and considered as a reference to the Section, Division or Article as so amended. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑104.1)(from Ch. 108 1/2, par. 1‑104.1) Sec. 1‑104.1. Gender. Words or phrases as used in this Code that import the masculine gender shall be construed to import also the feminine gender, unless such construction would be inconsistent with the manifest intention of the context. (Source: P. A. 78‑1129.)
(40 ILCS 5/1‑104.2)(from Ch. 108 1/2, par. 1‑104.2) Sec. 1‑104.2. Beginning January 1, 1986, children not conceived in lawful wedlock shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because of the fact that the child was born out of wedlock; however, in cases where the father is the employee parent, paternity must first be established. Paternity may be established by any one of the following means: (1) acknowledgment by the father, or (2) adjudication before or after the death of the father, or (3) any other means acceptable to the board of trustees of the pension fund or retirement system. (Source: P.A. 94‑229, eff. 1‑1‑06.)
(40 ILCS 5/1‑104.3) Sec. 1‑104.3. Adopted children. Notwithstanding any other provision of this Code to the contrary, beginning on the effective date of this amendatory Act of the 95th General Assembly, legally adopted children shall be entitled to the same benefits as other children, and no child's or survivor's benefit shall be disallowed because the child is an adopted child. The provisions of this Section apply without regard to whether the employee or member was in service on or after the date of the adoption of the child. (Source: P.A. 95‑279, eff. 1‑1‑08.)
(40 ILCS 5/1‑105)(from Ch. 108 1/2, par. 1‑105) Sec. 1‑105. Partial invalidity. The invalidity of any provision of this Code shall not affect the validity of the remainder of this Code. (Source: Laws 1963, p. 161.)
(40 ILCS 5/1‑106)(from Ch. 108 1/2, par. 1‑106) Sec. 1‑106. Payment of distribution other than direct. (a) The board of trustees of any retirement fund or system operating under this Code may, at the written direction and request of any annuitant, solely as an accommodation to the annuitant, pay the annuity due the annuitant to a bank, savings and loan association, or any other financial institution insured by an agency of the federal government, for deposit to the account of the annuitant, or to a bank, savings and loan association, or trust company for deposit in a trust established by the annuitant for his or her benefit with that bank, savings and loan association, or trust company. The annuitant may withdraw the direction at any time. (b) Beginning January 1, 1993, each pension fund or retirement system operating under this Code may, and to the extent required by federal law shall, at the request of any person entitled to receive a refund, lump‑sum benefit, or other nonperiodic distribution from the pension fund or retirement system, pay the distribution directly to any entity that (1) is designated in writing by the person, (2) is qualified under federal law to accept an eligible rollover distribution from a qualified plan, and (3) has agreed to accept the distribution. (Source: P.A. 96‑586, eff. 8‑18‑09.)
(40 ILCS 5/1‑107)(from Ch. 108 1/2, par. 1‑107) Sec. 1‑107. Indemnification of trustees, consultants and employees of retirement systems and pension funds. Every retirement system, pension fund or other system or fund established under this Code may indemnify and protect the trustees, staff and consultants against all damage claims and suits, including defense thereof, when damages are sought for negligent or wrongful acts alleged to have been committed in the scope of employment or under the direction of the trustees. However, the trustees, staff and consultants shall not be indemnified for wilful misconduct and gross negligence. Each board is authorized to insure against loss or liability of the trustees, staff and consultants which may result from these damage claims. This insurance shall be carried in a company which is licensed to write such coverage in this State. (Source: P.A. 80‑1364.)
(40 ILCS 5/1‑108)(from Ch. 108 1/2, par. 1‑108) Sec. 1‑108. (a) In any proceeding commenced against an employee of a pension fund, alleging a civil wrong arising out of any act or omission occurring within the scope of the employee's pension fund employment, unless the court or the jury finds that the conduct which gave rise to the claim was intentional, wilful or wanton misconduct, the pension fund shall indemnify the employee for any damages awarded and court costs and attorneys' fees assessed as part of any final and unreversed judgment and any attorneys' fees, court costs and litigation expenses incurred by the employee in defending the claim. In any such proceeding if a majority of the board or trustees who are not a party to the action determine that the conduct which gave rise to the claim was not intentional, wilful or wanton misconduct, the board or trustees may agree to settlement of the proceeding and the pension fund shall indemnify the employee for any damages, court costs and attorneys' fees agreed to as part of the settlement and any attorneys' fees, court costs and litigation expenses incurred in defending the claim. (b) No employee of a pension fund shall be entitled to indemnification under this Section unless within 15 days after receipt by the employee of service of process, he shall give written notice of such proceeding to the pension fund. (c) Each pension fund may insure against loss or liability of employees which may arise as a result of these claims. This insurance shall be carried by a company authorized to provide such coverage in this State. (d) Nothing contained or implied in this Section shall operate, or be construed or applied, to deprive the State or a pension fund, or any other employee thereof, of any immunity or any defense heretofore available. (e) This Section shall apply regardless of whether the employee is sued in his or her individual or official capacity. (f) This Section shall not apply to claims for bodily injury or damage to property arising from motor vehicle accidents. (g) This Section shall apply to all proceedings filed on or after its effective date, and to any proceeding pending on its effective date, if the pension fund employee gives notice to the pension fund within 30 days of the Act's effective date. (Source: P.A. 80‑1078.)
(40 ILCS 5/1‑109)(from Ch. 108 1/2, par. 1‑109) Sec. 1‑109. Duties of Fiduciaries. A fiduciary with respect to a retirement system or pension fund established under this Code shall discharge his or her duties with respect to the retirement system or pension fund solely in the interest of the participants and beneficiaries and: (a) For the exclusive purpose of: (1) Providing benefits to participants and their beneficiaries; and (2) Defraying reasonable expenses of administering the retirement system or pension fund; (b) With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims; (c) By diversifying the investments of the retirement system or pension fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and (d) In accordance with the provisions of the Article of the Pension Code governing the retirement system or pension fund. (Source: P.A. 82‑960.)
(40 ILCS 5/1‑109.1)(from Ch. 108 1/2, par. 1‑109.1) Sec. 1‑109.1. Allocation and Delegation of Fiduciary Duties. (1) Subject to the provisions of Section 22A‑113 of this Code and subsections (2) and (3) of this Section, the board of trustees of a retirement system or pension fund established under this Code may: (a) Appoint one or more investment managers as
fiduciaries to manage (including the power to acquire and dispose of) any assets of the retirement system or pension fund; and
(b) Allocate duties among themselves and designate
others as fiduciaries to carry out specific fiduciary activities other than the management of the assets of the retirement system or pension fund.
(2) The board of trustees of a pension fund established under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code 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. (3) Pursuant to subsections (h) and (i) of Section 6 of Article VII of the Illinois Constitution, the investment authority of boards of trustees of retirement systems and pension funds established under this Code is declared to be a subject of exclusive State jurisdiction, and the concurrent exercise by a home rule unit of any power affecting such investment authority is hereby specifically denied and preempted. (4) For the purposes of this Code, "emerging investment manager" means a qualified investment adviser that manages an investment portfolio of at least $10,000,000 but less than $10,000,000,000 and is a "minority owned business", "female owned business" or "business owned by a person with a disability" as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. It is hereby declared to be the public policy of the State of Illinois to encourage the trustees of public employee retirement systems, pension funds, and investment boards to use emerging investment managers in managing their system's assets, encompassing all asset classes, and increase the racial, ethnic, and gender diversity of its fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence, and to take affirmative steps to remove any barriers to the full participation in investment opportunities afforded by those retirement systems, pension funds, and investment boards. On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for utilization of emerging investment managers. This policy shall include quantifiable goals for the management of assets in specific asset classes by emerging investment managers. The retirement system, pension fund, or investment board shall establish 3 separate goals for: (i) emerging investment managers that are minority owned businesses; (ii) emerging investment managers that are female owned businesses; and (iii) emerging investment managers that are businesses owned by a person with a disability. The goals established shall be based on the percentage of total dollar amount of investment service contracts let to minority owned businesses, female owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection. If in any case an emerging investment manager meets the criteria established by a board for a specific search and meets the criteria established by a consultant for that search, then that emerging investment manager shall receive an invitation by the board of trustees, or an investment committee of the board of trustees, to present his or her firm for final consideration of a contract. In the case where multiple emerging investment managers meet the criteria of this Section, the staff may choose the most qualified firm or firms to present to the board. The use of an emerging investment manager does not constitute a transfer of investment authority for the purposes of subsection (2) of this Section. (5) Each retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall establish a policy that sets forth goals for increasing the racial, ethnic, and gender diversity of its fiduciaries, including its consultants and senior staff. Each system, fund, and investment board shall annually review the goals established under this subsection. (6) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for utilization of businesses owned by minorities, females, and persons with disabilities for all contracts and services. The goals established shall be based on the percentage of total dollar amount of all contracts let to minority owned businesses, female owned businesses, and businesses owned by a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this subsection. (7) On or before January 1, 2010, a retirement system, pension fund, or investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall adopt a policy that sets forth goals for increasing the utilization of minority broker‑dealers. For the purposes of this Code, "minority broker‑dealer" means a qualified broker‑dealer who meets the definition of "minority owned business", "female owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The retirement system, pension fund, or investment board shall annually review the goals established under this Section. (8) Each retirement system, pension fund, and investment board subject to this Code, except those whose investments are restricted by Section 1‑113.2 of this Code, shall submit a report to the Governor and the General Assembly by January 1 of each year that includes the following: (i) the policy adopted under subsection (4) of this Section, including the names and addresses of the emerging investment managers used, percentage of the assets under the investment control of emerging investment managers for the 3 separate goals, and the actions it has undertaken to increase the use of emerging investment managers, including encouraging other investment managers to use emerging investment managers as subcontractors when the opportunity arises; (ii) the policy adopted under subsection (5) of this Section; (iii) the policy adopted under subsection (6) of this Section; and (iv) the policy adopted under subsection (7) of this Section, including specific actions undertaken to increase the use of minority broker‑dealers. (Source: P.A. 96‑6, eff. 4‑3‑09.)
(40 ILCS 5/1‑109.2)(from Ch. 108 1/2, par. 1‑109.2) Sec. 1‑109.2. Extent of Cofiduciary Duties. (a) (1) Except to the extent otherwise required in subsection (b) of this Section, a fiduciary of a retirement system or pension fund to whom a specified duty has not been allocated shall not be responsible or liable for an act or omission, in connection with that duty, by the fiduciary to whom that duty has been allocated, except to the extent that the allocation, or the continuation thereof, is a violation of Section 1‑109 of this Code. Nothing in this paragraph (1) shall be construed to relieve a fiduciary from responsibility or liability for any act by that fiduciary. (2) Except to the extent otherwise required in subsection (b) of this Section a fiduciary shall not be responsible or liable for an act or omission, in connection with a specific fiduciary activity, by any other person who has been designated to carry out that fiduciary activity, except to the extent that the designation, or the continuation thereof at any time under the circumstances then prevailing, is a violation of Section 1‑109 of this Code. Nothing in this paragraph (2) shall be construed to relieve a fiduciary from responsibility for any act by that fiduciary. (b) With respect to any retirement system or pension fund established under this Code: (1) Each trustee shall use reasonable care to prevent any other trustee from committing a breach of duty; and (2) Subject to the provisions of Section 22A‑113 of this Code, all trustees shall jointly manage and control the assets of the retirement system or pension fund. Nothing in this subsection (b) shall be construed to attribute a duty to a trustee which would be inconsistent with the appointment of, and delegation of authority to, an investment manager in accordance with paragraph (a) of Section 1‑109.1 of this Code. (Source: P.A. 82‑960.)
(40 ILCS 5/1‑109.3) Sec. 1‑109.3. Training requirement for pension trustees. (a) All elected and appointed trustees under Article 3 and 4 of this Code must participate in a mandatory trustee certification training seminar that consists of at least 32 hours of initial trustee certification at a training facility that is accredited and affiliated with a State of Illinois certified college or university. This training must include without limitation all of the following: (1) Duties and liabilities of a fiduciary under
Article 1 of the Illinois Pension Code.
(2) Adjudication of pension claims. (3) Basic accounting and actuarial training.
