On December 18, 2019, Governor Pritzker signed into law SB 1300 (Public Act 101-610) amending the Illinois Pension Code. Public Act 101-610 amends the Pension Code by, among other things, combining the assets of more than 650 suburban and downstate police and fire pension funds into two consolidated investment funds known as the "Police Officers' Pension Investment Fund" and the "Firefighters' Pension Investment Fund." Public Act 101-610 is effective January 1, 2020.
The Act provides a timeline and process for the mandatory consolidation of the assets of the existing local police and firefighter pension funds, which are known in the Act as "transferor pension funds." While each transferor pension fund will maintain individual accounts in the new scheme, and will maintain their separate assets and liabilities, the Act consolidates all investing, auditing and actuarial services into the two investment funds and provides for the selection process for the boards that will manage the new police and firefighter investment funds. The Act further ensures that the new police and firefighter investment funds are held outside the State Treasury and are not subject to the State's financial situation. Further, by keeping all of the accounts of the transferor pension funds separate, the Act is designed to ensure that the financial condition of one transferor pension fund will have no effect on the financial condition of any other transferor pension fund. The Act provides that returns on the consolidated investments of the police and firefighter investment funds will be credited to each transferor pension fund in proportion to the amount each transferor pension fund has invested in the combined funds.
Please direct any questions regarding this Law Alert to your Robbins Schwartz attorney.