State of Illinois
90th General Assembly

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[ Introduced ]


      40 ILCS 5/17-115          from Ch. 108 1/2, par. 17-115
      40 ILCS 5/17-117          from Ch. 108 1/2, par. 17-117
      40 ILCS 5/17-117.1        from Ch. 108 1/2, par. 17-117.1
      40 ILCS 5/17-120          from Ch. 108 1/2, par. 17-120
      40 ILCS 5/17-122          from Ch. 108 1/2, par. 17-122
      40 ILCS 5/17-134          from Ch. 108 1/2, par. 17-134
      40 ILCS 5/17-146          from Ch. 108 1/2, par. 17-146
      40 ILCS 5/17-146.1        from Ch. 108 1/2, par. 17-146.1
      30 ILCS 805/8.21 new
          Amends  the  Chicago  Teacher  Article  of  the  Illinois
      Pension Code.  Deletes a limitation on investment  in  stocks
      and  convertible  debt.   Changes  provisions relating to the
      manner of determining the value of  the  Fund's  investments.
      Restores  full  payment of the retirement annuity for certain
      persons who elected reversionary annuities before January  1,
      1984,  where  the  beneficiary  has  predeceased the retiree.
      Requires filing of a claim  with  the  Industrial  Commission
      before  applying  for a duty disability benefit.  Makes other
      administrative  and  technical  changes.   Amends  the  State
      Mandates Act to require implementation without reimbursement.
      Effective immediately.
HB0372 Engrossed                               LRB9001754EGfg
 1        AN ACT to amend the Illinois  Pension  Code  by  changing
 2    Sections  17-115,  17-117,  17-117.1, 17-120, 17-122, 17-134,
 3    17-146, and 17-146.1 and to amend the State Mandates Act.
 4        Be it enacted by the People of  the  State  of  Illinois,
 5    represented in the General Assembly:
 6        Section  5.  The  Illinois  Pension  Code  is  amended by
 7    changing Sections 17-115, 17-117, 17-117.1,  17-120,  17-122,
 8    17-134, 17-146, and 17-146.1 as follows:
 9        (40 ILCS 5/17-115) (from Ch. 108 1/2, par. 17-115)
10        Sec. 17-115.  Eligibility for service retirement pension.
11        (a)  The  Board  shall  find  a  contributor eligible for
12    service retirement pension when he has:
13             (1)  1.  Left  the  employment  of  the   Board   of
14        Education  or  the board after completing 5 or more years
15        of service, or has been retired compulsorily as a regular
16        teacher because of age.
17             (2) 2.  Contributed  to  the  fund  the  total  sums
18        provided in this Article.
19             (3)  3.  Contributed  as  a  member  of the teaching
20        force in the public schools of the City or to  the  State
21        Universities   Retirement  System  or  to  the  Teachers'
22        Retirement System of the State  of  Illinois  during  the
23        last 5 years of his term of service.
24             (4) 4.  Filed a written application for pension.
25        (b)  In  computing the years of service for which annuity
26    is granted, the following conditions shall apply:
27             (1) 1.  No more than 10 years of teaching service in
28        public schools  of  the  several  states  or  in  schools
29        operated  by  or  under the auspices of the United States
30        shall be allowed. This maximum shall be  reduced  by  the
31        service  credit which is validated under paragraph (i) of
HB0372 Engrossed            -2-                LRB9001754EGfg
 1        Section 15-113 and paragraph (3)  of  Section  16-127  of
 2        this  Code. Three-fifths of the term of service for which
 3        an annuity is granted shall have  been  rendered  in  the
 4        public  schools  of  the  city.  No  portion  of any such
 5        service shall be included in the total period of  service
 6        for  which  a  pension  is  payable or paid by some other
 7        public retirement system; provided that  this  shall  not
 8        apply  to  any  benefit  payable only after the teacher's
 9        death or to any compensation or annuity paid by the Board
10        of Education after retirement from active service.
11             (2) 2.  Up to No  more  than  5  years  of  military
12        active service, if preceded by service as a teacher under
13        this  fund  or under Article 16, shall be included in the
14        total period of service even though it can  otherwise  be
15        used  in  the  computation  of a pension or other benefit
16        provided for service in any branch of the armed forces of
17        the United States.
18    (Source: P.A. 83-803.)
19        (40 ILCS 5/17-117) (from Ch. 108 1/2, par. 17-117)
20        Sec. 17-117. Disability retirement pension.
21        (a)  The conditions  prescribed  in  items  1  and  2  in
22    Section  17-116  for  computing  service  retirement pensions
23    shall apply  in  the  computation  of  disability  retirement
24    pensions.
25             (1)  1.  Each  teacher  retired or retiring after 10
26        years of service and with less than 20 years  of  service
27        because   of  permanent  disability  not  incurred  as  a
28        proximate result of the performance of duty shall receive
29        a disability  retirement  pension  equal  to  1  2/3%  of
30        average salary for each year of service.
31             (2)  2.  If  the  total service is 20 years and less
32        than 25 years and the teacher's  age  is  under  55,  the
33        disability  retirement  pension  shall  equal  a  service
HB0372 Engrossed            -3-                LRB9001754EGfg
 1        retirement  pension  discounted  1/2 of 1% for each month
 2        the age of the contributor is less  than  55  down  to  a
 3        minimum   age   of  50  years,  provided  the  disability
 4        retirement pension so computed shall not be less than the
 5        amount payable under paragraph 1.
 6             (3) 3.  If the total service is 20 years or more and
 7        the teacher has attained age 55, and is under age  60,  a
 8        disability  retirement  pension  shall  equal  a  service
 9        retirement pension without discount.
10             (4)  4.  If  the  total  service is 25 years or more
11        regardless of age, a disability  pension  shall  equal  a
12        service retirement pension without discount.
13             (5) 5.  If the total service is 20 years or more and
14        the  teacher  is  age  60  or  over, a service retirement
15        pension shall be payable.
16        (b)  For disability retirement  pensions,  the  following
17    further conditions shall apply:
18             (1)   1.  Written  application  shall  be  submitted
19        within 3 years from the date of separation.
20             (2) 2.  The applicant shall submit to examination by
21        physicians appointed by the board within  one  year  from
22        the date of their appointment.
23             (3)  3.  Two  physicians,  appointed  by  the board,
24        shall declare  the  applicant  to  be  suffering  from  a
25        disability   which   wholly  and  presumably  permanently
26        incapacitates him for  teaching  or  for  service  as  an
27        employee  of  the board.  In the event of disagreement by
28        the physicians,  a  third  physician,  appointed  by  the
29        board,  shall declare the applicant wholly and presumably
30        permanently incapacitated.
31        (c)  Disability retirement pensions shall  begin  on  the
32    effective  date of resignation or the day following the close
33    of  the  payroll  period  for  which  credit  was  validated,
34    whichever is later.
HB0372 Engrossed            -4-                LRB9001754EGfg
 1    (Source: P.A. 86-1488.)
 2        (40 ILCS 5/17-117.1) (from Ch. 108 1/2, par. 17-117.1)
 3        Sec. 17-117.1. Duty disability.  A  teacher  who  becomes
 4    wholly  and  presumably permanently totally incapacitated for
 5    duty while under age 65 as the proximate result  of  injuries
 6    sustained   or  a  hazardous  condition  encountered  in  the
 7    performance and within the  scope  of  his  duties,  if  such
 8    injury  or  hazard  was not the result of his own negligence,
 9    shall be entitled to a duty disability benefit, provided:
10             (1)  application for the  benefit  is  made  to  the
11        Board  not more than 6 months after a final settlement or
12        an award from  the  Industrial  Commission  or  within  6
13        months  of the manifestation of an injury or illness that
14        can be traced directly to an injury or illness for  which
15        a  claim  was  filed  with  the Industrial Commission the
16        occurrence of an injury disability or 6 months after  the
17        occurrence of disablement if an occupational disease;
18             (2)  certification   is  received  from  2  or  more
19        physicians designated by the board that  the  teacher  is
20        physically incapacitated for teaching service; and
21             (3)  the  teacher  provides the Board with a copy of
22        the notice of the occurrence  that  was  filed  with  the
23        Board  of  Education  within  the  time  provided  by law
24        resulting in disability is filed with the board within 90
25        days of the date thereof.
26        The benefit shall be payable during disability and  shall
27    be 75% of the salary in effect at date of disability, payable
28    until  the  teacher's  attainment  of age 65. At such time if
29    disability still exists, the teacher shall become entitled to
30    a service retirement pension. Creditable service shall accrue
31    during the period the disability benefit is payable.
32        Before any action is taken by the board on an application
33    for a duty disability benefit, the teacher shall file a claim
HB0372 Engrossed            -5-                LRB9001754EGfg
 1    with  the  Industrial  Commission  to  establish   that   the
 2    disability  was  incurred while the teacher was acting within
 3    the scope of and in the course of his duties under the  terms
 4    of  the  Workers' Compensation or Occupational Diseases Acts,
 5    whichever may be applicable. The  benefit  shall  be  payable
 6    after  a  finding  by  the  Commission  that  the  claim  was
 7    compensable  under  either of the aforesaid Acts; but if such
 8    finding is appealed the benefit shall be  payable  only  upon
 9    affirmance of the Commission's finding. After the teacher has
10    made   timely  application  for  a  duty  disability  benefit
11    supported by the certificate of two or  more  physicians,  he
12    shall be entitled to a disability retirement pension provided
13    in  Section  17-117  of  this  Act  until  such  time  as the
14    Industrial Commission award finding that  his  disability  is
15    duty-connected as provided in this Section becomes final.
16        Any  amounts  provided  for  the  teacher under such Acts
17    shall be applied as an offset to the duty disability  benefit
18    payable  hereunder in such manner as may be prescribed by the
19    rules of the board.
20    (Source: P.A. 81-992.)
21        (40 ILCS 5/17-120) (from Ch. 108 1/2, par. 17-120)
22        Sec. 17-120.  Reversionary pension.  Any contributor,  at
23    any time prior to retirement on a service retirement pension,
24    may  exercise  an option of taking a lesser amount of service
25    retirement pension and providing with the  remainder  of  his
26    equity,  determined  on  an  actuarial  equivalent  basis,  a
27    reversionary  pension  benefit  for  any  person  named  in a
28    written designation filed by the contributor with the  board,
29    provided that the pension resulting from such election is not
30    less  than  $40  per  month, or more than the reduced pension
31    payable after the exercise of the  option.   If  the  reduced
32    pension to the retired teacher is less than that provided for
33    a beneficiary, whether or not the aforesaid minimum amount is
HB0372 Engrossed            -6-                LRB9001754EGfg
 1    payable, the election shall be void.
 2        The pension to a beneficiary shall begin on the first day
 3    of  the  month  next following the month in which the retired
 4    teacher dies.
 5        If the beneficiary survives the date of retirement of the
 6    teacher,  but  does  not  survive  the  retired  teacher,  no
 7    reversionary pensions shall be payable, and no  change  shall
 8    be  made  in  the  rate  of pension granted previously to the
 9    retired teacher if the reversionary annuity was elected prior
10    to January 1, 1984.  If the reversionary annuity was  elected
11    on  or after January 1, 1984 and the beneficiary survives the
12    date of retirement of the teacher, but does not  survive  the
13    retired  teacher,  the  teacher's  service  pension  shall be
14    restored to the full service pension amount beginning on  the
15    first  day of the month next following the month in which the
16    beneficiary dies or on the effective date of this  amendatory
17    Act  of 1997, whichever occurs later, provided that the Board
18    adopts  actuarial  factors  that  take   into   account   the
19    additional cost involved.
20        If  the  beneficiary  dies  after  the  such election but
21    before the retirement of the teacher, the election  shall  be
22    void.    No   change   shall  be  permitted  in  the  written
23    designation filed with the board.
24        In the case of a reversionary annuity elected on or after
25    January 1, 1984, no reversionary annuity shall be paid if the
26    teacher dies before the expiration of 730 days from the  date
27    that  a  written  designation  was filed with the board, even
28    though the teacher was receiving a reduced annuity.
29        Sections 1-103.1 and 17-157 do not apply to  the  changes
30    made to this Section by this amendatory Act of 1997.
31    (Source: P.A. 83-812.)
32        (40 ILCS 5/17-122) (from Ch. 108 1/2, par. 17-122)
33        Sec. 17-122. Survivor's and children's pensions - Amount.
HB0372 Engrossed            -7-                LRB9001754EGfg
 1    Upon  the death of a teacher who has completed at least 1 1/2
 2    years of contributing service with either this  Fund  or  the
 3    State   Universities   Retirement  System  or  the  Teachers'
 4    Retirement System of the  State  of  Illinois,  provided  his
 5    death  occurred  while  (a)  in active service covered by the
 6    fund or during his first 18 months of  continuous  employment
 7    without  a  break  in  service  under any other participating
 8    system  as  defined  in  the  Illinois   Retirement   Systems
 9    Reciprocal  Act  except  the  State  Universities  Retirement
10    System  and  the  Teachers' Retirement System of the State of
11    Illinois, (b) on a creditable leave  of  absence,  (c)  on  a
12    noncreditable  leave  of absence of no more than one year, or
13    (d) a pension was deferred or pending  provided  the  teacher
14    had  at  least  10 years of validated service credit, or upon
15    the  death  of  a  pensioner  otherwise  qualified  for  such
16    benefit, the surviving spouse and unmarried minor children of
17    the deceased teacher  under  age  18  shall  be  entitled  to
18    pensions,  under  the  conditions  stated  hereinafter.  Such
19    survivor's and children's pensions  shall  be  based  on  the
20    average  of  the 4 highest consecutive years of salary in the
21    last 10 years of service or on the average salary  for  total
22    service,  if  total  service  has  been  less  than  4 years,
23    according to the following percentages:
24        30% of average salary or 50% of  the  retirement  pension
25    earned  by  the  teacher, whichever is larger, subject to the
26    prescribed maximum monthly payment, for  a  surviving  spouse
27    alone on attainment of age 50;
28        60%   of  average  salary  for  a  surviving  spouse  and
29    eligible minor children of the deceased teacher.
30        If no eligible spouse survives, or the  surviving  spouse
31    remarries,  or  the  parent  of  the children of the deceased
32    member is otherwise ineligible for a  survivor's  pension,  a
33    children's  pension  for eligible minor children under age 18
34    shall be paid to their parent or  legal  guardian  for  their
HB0372 Engrossed            -8-                LRB9001754EGfg
 1    benefit according to the following percentages:
 2        30% of average salary for one child;
 3        60% of average salary for 2 or more children.
 4        On  January  1,  1981,  any  survivor  or  child  who was
 5    receiving a survivor's or children's  pension  on  or  before
 6    January  1,  1971,  shall  have  his survivor's or children's
 7    pension then being paid increased by 1% for  each  full  year
 8    which has elapsed from the date the pension began. On January
 9    1,  1982,  any  survivor  or  child whose pension began after
10    January 1, 1971, but before January 1, 1981, shall  have  his
11    survivor's or children's pension then being paid increased 1%
12    for  each  full  year  which  has  elapsed  from the date the
13    pension began. On January 1,  1987,  any  survivor  or  child
14    whose  pension began on or before January 1, 1977, shall have
15    the monthly survivor's or children's pension increased by  $1
16    for each full year which has elapsed since the pension began.
17        Beginning   January   1,   1990,   every  survivor's  and
18    children's pension shall be increased (1) on each  January  1
19    occurring  on or after the commencement of the pension if the
20    deceased teacher died while receiving a  retirement  pension,
21    or  (2)  in  other  cases,  on each January 1 occurring on or
22    after the  first  anniversary  of  the  commencement  of  the
23    pension,  by  an  amount equal to 3% of the current amount of
24    the pension, including all increases previously granted under
25    this Article, notwithstanding Section 17-157.  Such increases
26    shall apply without regard to whether  the  deceased  teacher
27    was  in  service  on  or  after  the  effective  date of this
28    amendatory Act of 1991, but shall not accrue for  any  period
29    prior to January 1, 1990.
30        Subject  to  the  minimum  established below, the maximum
31    amount of pension for a surviving spouse alone or  one  minor
32    child  shall  be  $400  per  month,  and the maximum combined
33    pensions for a surviving spouse and children of the  deceased
34    teacher  shall  be  $600  per month, with individual pensions
HB0372 Engrossed            -9-                LRB9001754EGfg
 1    adjusted for all beneficiaries pro rata to conform with  this
 2    limitation.    If   proration   is  unnecessary  the  minimum
 3    survivor's and children's pensions shall be  $40  per  month.
 4    The  minimum  total survivor's and children's pension payable
 5    upon the death of a contributor  or  annuitant  which  occurs
 6    after   December  31,  1986,  shall  be  50%  of  the  earned
 7    retirement  pension  of  such   contributor   or   annuitant,
 8    calculated  without  early retirement discount in the case of
 9    death in service.
10        On death  after  retirement,  the  total  survivor's  and
11    children's  pensions  shall not exceed the monthly retirement
12    or  disability  pension  paid  to  the   deceased   retirant.
13    Survivor's  and children's benefits described in this Section
14    shall apply to all service and disability pensioners eligible
15    for a pension as of July 1, 1981.
16    (Source: P.A. 86-273; 86-1488.)
17        (40 ILCS 5/17-134) (from Ch. 108 1/2, par. 17-134)
18        Sec.  17-134.   Contributions  for  leaves  of   absence;
19    military  service;  computing  service.  In computing service
20    for pension purposes the following periods of  service  shall
21    stand  in  lieu of a like number of years of teaching service
22    upon payment therefor in the manner hereinafter provided: (a)
23    time spent on sabbatical leaves of absence,  sick  leaves  or
24    maternity  or  paternity  leaves; (b) service with teacher or
25    labor organizations based  upon  special  leaves  of  absence
26    therefor  granted by the Board of Education; (c) a maximum of
27    5 years spent in the military service of the  United  States,
28    of  which  up  to  2  years  may have been served outside the
29    pension period;  (d)  unused  sick  days  at  termination  of
30    service to a maximum of 244 days; (e) time lost due to layoff
31    and  curtailment  of the school term from June 6 through June
32    21, 1976; and (f) time spent after June 30, 1982 as a  member
33    of  the  Board  of  Education,  if required to resign from an
HB0372 Engrossed            -10-               LRB9001754EGfg
 1    administrative or teaching  position in order to qualify as a
 2    member of the Board of Education.
 3             (1) 1.  For time spent on or after September 6, 1948
 4        on sabbatical leaves of absence or sick leaves, for which
 5        salaries are paid, the  Board  of  Education  shall  make
 6        payroll  deductions  at  the  applicable  rates in effect
 7        during such periods.
 8             (2) 2.  For time spent on sabbatical or sick  leaves
 9        commencing  on  or  after September 1, 1961, and for time
10        spent on maternity or  paternity  leaves,  for  which  no
11        salaries  are  paid,  teachers  desiring  credit therefor
12        shall pay the required  contributions  at  the  rates  in
13        effect  during  such  periods  as  though  they  were  in
14        teaching  service.  If the Board of Education pays salary
15        for vacations which occur during a teacher's  sick  leave
16        or  maternity or paternity leave without salary, vacation
17        pay for which the teacher would have qualified  while  in
18        active  service shall be considered part of the teacher's
19        total salary for pension purposes. No more than 12 months
20        of sick leave or maternity or paternity leave credit  may
21        be  allowed any person during the entire term of service.
22        Sabbatical leave credit shall be limited to the time  the
23        person  on  leave without salary under Board of Education
24        rules is allowed to engage in an activity  for  which  he
25        receives salary or compensation.
26             (3)  3.  For  time spent prior to September 6, 1948,
27        on sabbatical leaves of absence or sick leaves for  which
28        salaries  were  paid,  teachers  desiring  service credit
29        therefor shall pay  the  required  contributions  at  the
30        maximum applicable rates in effect during such periods.
31             (4)   4.  For   service   with   teacher   or  labor
32        organizations authorized by special  leaves  of  absence,
33        for  which no payroll deductions are made by the Board of
34        Education,  teachers  desiring  service  credit  therefor
HB0372 Engrossed            -11-               LRB9001754EGfg
 1        shall contribute to the fund upon the basis of the actual
 2        salary received from such organizations at the percentage
 3        rates  in  effect  during  such  periods  for   certified
 4        positions with the Board of Education.  To the extent the
 5        actual  salary exceeds the regular salary, which shall be
 6        defined as the salary rate, as calculated by the board of
 7        trustees, in effect for the teacher's regular position in
 8        teaching service on September 1, 1983 or on the effective
 9        date of the leave with  the  organization,  whichever  is
10        later,  the  organization  shall  pay  to  the  fund  the
11        employer's normal cost as set by the board of trustees on
12        the increment.
13             (5)  5.  For  time  spent  in  the military service,
14        teachers entitled to and desiring credit  therefor  shall
15        contribute  the  amount required for each year of service
16        or fraction thereof at the rates in force (a) at the date
17        of appointment, or (b) on return to teaching service as a
18        regularly certified teacher, as the case may be; provided
19        such rates shall not  be  less  than  $450  per  year  of
20        service.   These  conditions shall apply unless the Board
21        of Education elects to and does pay  into  the  fund  the
22        amount  which would have been due from such person had he
23        been employed as a teacher during such time.  In the case
24        of credit for military service  not  during  the  pension
25        period,  the  teacher must also pay to the Fund an amount
26        determined by the board to be  equal  to  the  employer's
27        normal  cost  of  the benefits accrued from such service,
28        plus  interest  thereon  at  5%  per   year,   compounded
29        annually,  from the date of appointment conclusion of the
30        military service to the date of payment.
31             The changes to  this  Section  made  by  Public  Act
32        87-795  this  amendatory Act of 1991 shall apply not only
33        to persons who on or after  its  effective  date  are  in
34        service  under the Fund, but also to persons whose status
HB0372 Engrossed            -12-               LRB9001754EGfg
 1        as a teacher terminated prior to that  date,  whether  or
 2        not the person is an annuitant on that date.  In the case
 3        of  an  annuitant  who applies for credit allowable under
 4        this Section for a period of military  service  that  did
 5        not  immediately  follow employment, and who has made the
 6        required contributions for such credit, the annuity shall
 7        be recalculated to include the additional service credit,
 8        with the increase taking effect  on  the  date  the  Fund
 9        received  written  notification of the annuitant's intent
10        to purchase the credit, if payment of  all  the  required
11        contributions  is  made within 60 days of such notice, or
12        else on the first annuity payment date following the date
13        of payment of the required contributions.  In calculating
14        the automatic annual increase for  an  annuity  that  has
15        been   recalculated  under  this  Section,  the  increase
16        attributable to the additional  service  allowable  under
17        this  amendatory  Act  of  1991  shall be included in the
18        calculation of automatic annual increases accruing  after
19        the effective date of the recalculation.
20             The  total  credit  for  military  service shall not
21        exceed 5 years, except that any teacher who  on  July  1,
22        1963,  had  validated  credit  for  more  than 5 years of
23        military service shall be entitled to the total amount of
24        such credit.
25             (6) 6.  A maximum of 244 unused sick  days  credited
26        to  his  account by the Board of Education on the date of
27        termination of employment.  Members, upon verification of
28        unused sick days, may add  this  service  time  to  total
29        creditable service.
30             (7)  7.  In  all  cases where time spent on leave is
31        creditable and no payroll deductions therefor are made by
32        the Board of Education, persons desiring  service  credit
33        shall  make  the  required  contributions directly to the
34        fund.
HB0372 Engrossed            -13-               LRB9001754EGfg
 1             (8) 8.  For time lost without pay due to layoff  and
 2        curtailment  of  the school term from June 6 through June
 3        21, 1976, as provided in item (e) of the first  paragraph
 4        of  this  Section,  persons  who were contributors on the
 5        days immediately  preceding  such  layoff  shall  receive
 6        credit  upon  paying  to the Fund a contribution based on
 7        the rates of compensation and employee  contributions  in
 8        effect  at  the  time  of  such  layoff, together with an
 9        additional amount equal  to  12.2%  of  the  compensation
10        computed  for such period of layoff, plus interest on the
11        entire amount at 5% per annum from January 1, 1978 to the
12        date of payment.  If such contribution  is  paid,  salary
13        for  pension purposes for any year in which such a layoff
14        occurred shall include the  compensation  recognized  for
15        purposes of computing that contribution.
16             (9)  9.  For  time  spent  after June 30, 1982, as a
17        nonsalaried member of the Board of Education, if required
18        to resign from an administrative or teaching position  in
19        order  to  qualify as a member of the Board of Education,
20        an administrator  or  teacher  desiring  credit  therefor
21        shall  pay  the  required  contributions at the rates and
22        salaries in effect during  such  periods  as  though  the
23        member were in service.
24        Effective  September  1,  1974,  the interest charged for
25    validation of service described in paragraphs (2) through (5)
26    sub-paragraphs  2  through  5  of  this  Section   shall   be
27    compounded annually at a rate of 5% commencing one year after
28    the termination of the leave, or return to service.
29    (Source: P.A. 86-272; 86-1488; 87-794.)
30        (40 ILCS 5/17-146) (from Ch. 108 1/2, par. 17-146)
31        Sec.  17-146.  To make investments.  To invest the moneys
32    of the fund, subject to the requirements and restrictions set
33    forth  in  this  Article  and  in  Sections  1-109,  1-109.1,
HB0372 Engrossed            -14-               LRB9001754EGfg
 1    1-109.2, 1-110, 1-111, 1-114 and 1-115.  The total book value
 2    of all stocks and convertible debt owned by  the  fund  shall
 3    not exceed 50% of the aggregate book value of all investments
 4    of the fund, calculated on the basis of amortized cost.
 5        No  bank  or  savings  and loan association shall receive
 6    investment funds as permitted by this Section, unless it  has
 7    complied   with  the  requirements  established  pursuant  to
 8    Section  6  of  the  Public  Funds  Investment  Act.    Those
 9    requirements  shall  be  applicable  only  at  the  time   of
10    investment  and  shall  not  require  the  liquidation of any
11    investment at any time.
12        The board shall have the  authority  to  enter  into  any
13    agreements and to execute any documents that it determines to
14    be necessary to complete any investment transaction.
15        All  investments  shall be clearly held and accounted for
16    to indicate ownership by the fund.  The board may direct  the
17    registration  of  securities  or  the holding of interests in
18    real property in the name of the fund or in  the  name  of  a
19    nominee  created  for  the  express  purpose  of  registering
20    securities  or  holding  interests  in  real  property  by  a
21    national or state bank or trust company authorized to conduct
22    a  trust  business  in  the State of Illinois.  The board may
23    hold title to interests in real property in the name  of  the
24    fund  or  in  the name of a title holding corporation created
25    for the express purpose of holding title to interests in real
26    property.
27        Investments shall be carried at cost or at a  book  value
28    determined  in  accordance with generally accepted accounting
29    principles and accounting procedures approved by  the  board.
30    No  adjustments  shall  be made in investment carrying values
31    for ordinary current market price fluctuations, but  reserves
32    may  be provided to account for possible losses or unrealized
33    gains.
34        The book value of investments held by the fund in one  or
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 1    more  commingled  investment  accounts shall be determined in
 2    accordance with generally accepted accounting principles  the
 3    cost  of  its  units  of  participation  in  those commingled
 4    account or accounts.
 5        The board of trustees of any fund established under  this
 6    Article  may  not  transfer  its  investment  authority,  nor
 7    transfer the assets of the fund to any other person or entity
 8    for  the  purpose  of consolidating or merging its assets and
 9    management with any other pension fund or  public  investment
10    authority,  unless  the  board  resolution  authorizing  such
11    transfer  is  submitted  for approval to the contributors and
12    pensioners of the fund at elections held  not  less  than  30
13    days  after the adoption of such resolution by the board, and
14    such resolution is approved by a majority of the  votes  cast
15    on  the  question  in  both the contributors election and the
16    pensioners   election.      The   election   procedures   and
17    qualifications  governing  the  election  of  trustees  shall
18    govern the submission of resolutions for approval under  this
19    paragraph, insofar as they may be made applicable.
20    (Source: P.A. 89-636, eff. 8-9-96.)
21        (40 ILCS 5/17-146.1) (from Ch. 108 1/2, par. 17-146.1)
22        Sec.  17-146.1.  Participation  in  commingled investment
23    funds; transfer of investment functions and securities.
24        (a)  The retirement board may invest  in  any  commingled
25    investment  fund  or  funds established and maintained by the
26    Illinois State Board of Investment under  the  provisions  of
27    Article  22A  of this Code.  The book value of all commingled
28    equity participations plus the  book  value  of  other  stock
29    investments owned by this system shall not exceed the maximum
30    permissible percentage rate for equity investments prescribed
31    in  Section 17-146.  All commingled fund participations shall
32    be subject to the law governing the Illinois State  Board  of
33    Investment  and  the  rules,  policies and directives of that
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 1    Board.
 2        (b)  The retirement board may, by resolution duly adopted
 3    by a  majority  vote  of  its  membership,  transfer  to  the
 4    Illinois  State Board of Investment created by Article 22A of
 5    this Code, for management and administration, all investments
 6    owned  by  the  Fund  of  every  kind  and  character.   Upon
 7    completion of such transfer, the authority of the  retirement
 8    board  to  make  investments shall terminate. Thereafter, all
 9    investments of the reserves of the Fund shall be made by  the
10    Illinois  State  Board  of  Investment in accordance with the
11    provisions of Article 22A of this Code.
12        Such transfer shall be made not later than the first  day
13    of   the  fourth  month  next  following  the  date  of  such
14    resolution. Before such transfer an audit of such investments
15    shall be completed by a certified public accountant  selected
16    by the Illinois State Board of Investment and approved by the
17    Auditor General of the State of Illinois. The expense of such
18    audit shall be defrayed by the retirement board.
19    (Source: P. A. 78-645.)
20        Section  90.  The State Mandates Act is amended by adding
21    Section 8.21 as follows:
22        (30 ILCS 805/8.21 new)
23        Sec. 8.21. Exempt mandate.   Notwithstanding  Sections  6
24    and  8 of this Act, no reimbursement by the State is required
25    for  the  implementation  of  any  mandate  created  by  this
26    amendatory Act of 1997.
27        Section 99. Effective date.  This Act takes  effect  upon
28    becoming law.

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