Chapter 40 — PENSIONS

(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. (…

(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 pe…

(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 o…

(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 tru…

(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 investme…

(40 ILCS 5/1-101.6) Sec. 1-101.6. Transferor pension fund. "Transferor pension fund" means any pension fund established pursuant to Article 3 or 4 of this Code. (Source: P.A. 101-610, eff. 1-1-20.)

(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 n…

(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…

(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 retirem…

(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…

(40 ILCS 5/1-103.3) (Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional) Sec. 1-103.3. Application of 1994 amendment; funding standard. (a) The provisions of Public Act 88-593 that change the method of calculating, certifying, and paying th…

(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 Cod…

(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 t…

(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 c…

(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 chil…

(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 t…

(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 shall indemnify and protect the…

(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 …

(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 in…

(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 fun…

(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 s…

(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 16 hours of initial trustee cert…

(40 ILCS 5/1-109.5) Sec. 1-109.5. Prohibition on employment for board members. Except as otherwise provided in this Section and in accordance with Section 5-45 of the State Officials and Employees Ethics Act, no individual who is a board member of a pension fund, investment board…

(40 ILCS 5/1-110) (from Ch. 108 1/2, par. 1-110) Sec. 1-110. Prohibited Transactions. (a) A fiduciary with respect to a retirement system, pension fund, or investment board shall not cause the retirement system or pension fund to engage in a transaction if he or she knows or shou…

(40 ILCS 5/1-110.10) Sec. 1-110.10. Servicer certification. (a) For the purposes of this Section: "Illinois finance entity" means any entity chartered under the Illinois Banking Act, the Savings Bank Act, the Illinois Credit Union Act, or the Illinois Savings and Loan Act of 1985…

(40 ILCS 5/1-110.15) Sec. 1-110.15. Transactions prohibited by retirement systems; Iran. (a) As used in this Section: "Active business operations" means all business operations that are not inactive business operations. "Business operations" means engaging in commerce in any form…

(40 ILCS 5/1-110.16) Sec. 1-110.16. Transactions prohibited by retirement systems; companies that boycott Israel, for-profit companies that contract to shelter migrant children, Iran-restricted companies, Sudan-restricted companies, expatriated entities, companies that are domici…

(40 ILCS 5/1-110.17) Sec. 1-110.17. Expiration of prohibited transactions. If, at least 4 years after the effective date of an amendatory Act that initially establishes a prohibited transaction under this Article, the Illinois Investment Policy Board concludes that divestment is …

(40 ILCS 5/1-110.5) Sec. 1-110.5. (Repealed). (Source: P.A. 94-79, eff. 1-27-06. Repealed by P.A. 95-521, eff. 8-28-07.)

(40 ILCS 5/1-110.6) Sec. 1-110.6. Transactions prohibited by retirement systems; Republic of the Sudan. (a) The Government of the United States has determined that Sudan is a nation that sponsors terrorism and genocide. The General Assembly finds that acts of terrorism have cause…

(40 ILCS 5/1-111) (from Ch. 108 1/2, par. 1-111) Sec. 1-111. Ten Per Cent Limitation of Employer Securities. A plan may not acquire a security issued by an employer of employees covered by the retirement system or pension fund, if immediately after such acquisition, the aggregate…

(40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113) Sec. 1-113. Investment authority of certain pension funds, not including those established under Article 3 or 4. The investment authority of a board of trustees of a retirement system or pension fund established under this Code sha…

(40 ILCS 5/1-113.1) Sec. 1-113.1. Investment authority of pension funds established under Article 3 or 4. The board of trustees of a police pension fund established under Article 3 of this Code or firefighter pension fund established under Article 4 of this Code shall draw pensio…

(40 ILCS 5/1-113.10) Sec. 1-113.10. Legality at time of investment. The investment limitations set forth in this Article are applicable only at the time of investment and do not require the liquidation of any investment at any time. However, no additional pension funds may be inv…

(40 ILCS 5/1-113.11) Sec. 1-113.11. Rules. The Department of Insurance is authorized to promulgate rules that are necessary or useful for the administration and enforcement of Sections 1-113.1 through 1-113.10 of this Article. (Source: P.A. 90-507, eff. 8-22-97.)

(40 ILCS 5/1-113.12) Sec. 1-113.12. Application. (a) Except as provided in subsection (b) of this Section, Sections 1-113.1 through 1-113.10 apply only to pension funds established under Article 3 or 4 of this Code. (b) Upon the transfer of the securities, funds, assets, and mone…

(40 ILCS 5/1-113.14) Sec. 1-113.14. Investment services for retirement systems, pension funds, and investment boards, except those funds established under Articles 3 and 4. (a) For the purposes of this Section, "investment services" means services provided by an investment advise…

(40 ILCS 5/1-113.15) Sec. 1-113.15. Qualified fund-of-fund management services. (a) As used in this Section: "Qualified fund-of-fund management services" means either (i) the services of an investment adviser acting in its capacity as an investment manager of a fund-of-funds or (…

(40 ILCS 5/1-113.16) Sec. 1-113.16. Investment transparency. (a) The purpose of this Section is to provide for transparency in the investment of retirement or pension funds and require the reporting of full and complete information regarding the investments by pension funds, reti…

(40 ILCS 5/1-113.17) Sec. 1-113.17. Investment sustainability. Every retirement system, pension fund, or investment board subject to this Code shall adopt a written investment policy and file a copy of that policy with the Department of Insurance within 30 days after its adoption…

(40 ILCS 5/1-113.18) Sec. 1-113.18. Ethics training. All board members of a retirement system, pension fund, or investment board created under this Code must attend ethics training of at least 8 hours per year. The training required under this Section shall include training on et…

(40 ILCS 5/1-113.2) Sec. 1-113.2. List of permitted investments for all Article 3 or 4 pension funds. Any pension fund established under Article 3 or 4 may invest in the following items: (1) Interest bearing direct obligations of the United States of America. (2) Interest bearing…

(40 ILCS 5/1-113.20) Sec. 1-113.20. Investment strategies; explicit and implicit costs. Every pension fund, retirement system, and investment board created under this Code, except those whose investments are restricted by Section 1-113.2 of this Code, shall instruct the fund's, s…

(40 ILCS 5/1-113.21) Sec. 1-113.21. Contracts for services. (a) Beginning January 1, 2015, no contract, oral or written, for investment services, consulting services, or commitment to a private market fund shall be awarded by a retirement system, pension fund, or investment board…

(40 ILCS 5/1-113.22) Sec. 1-113.22. Required disclosures from consultants; minority-owned businesses, women-owned businesses, and businesses owned by persons with a disability. (a) No later than January 1, 2018 and each January 1 thereafter, each consultant retained by the board …

(40 ILCS 5/1-113.23) Sec. 1-113.23. Required disclosures from consultants; compensation and economic opportunity received. (a) As used in this Section: "Compensation" means any money, thing of value, or economic benefit conferred on, or received by, a consultant in return for ser…

(40 ILCS 5/1-113.24) Sec. 1-113.24. Contracts for investment services with emerging investment managers through a qualified manager of emerging investment managers services. (a) As used in this Section: "Emerging investment manager" has the meaning given to that term in subsectio…

(40 ILCS 5/1-113.3) Sec. 1-113.3. List of additional permitted investments for pension funds with net assets of $2,500,000 or more. (a) In addition to the items in Section 3-113.2, a pension fund established under Article 3 or 4 that has net assets of at least $2,500,000 may inve…