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SB 3403

PEN CD-BD OF INVESTMENT AUDIT

104th Regular Session Introduced by Laura Faver Dias and 2 co-sponsors

ISBI must provide detailed quarterly and annual investment reporting to funds, and late audit opinions won’t count against six-month report deadlines.

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Bill Summary · SB 3403

Summary of SB3403 (104th General Assembly, Illinois)

Title

PEN CD-BD OF INVESTMENT AUDIT

Purpose and Intent

SB3403 amends the Illinois Pension Code to adjust the timing for penalty/violation determinations related to late audit opinions and to reinforce the annual reporting requirements of the Illinois State Board of Investment (ISBI). Specifically, it provides that if ISBI has not received a required audit opinion by December 15, ISBI shall not be considered to be in violation of a provision requiring an annual report to each pension fund, six months after the close of each fiscal year.

  • Effective date: This act takes effect immediately upon becoming law.

Key Provisions and Changes

Audits and Reports (40 ILCS 5/22A-115)

  • Annual audit

    • The books, records, accounts, and securities of the Illinois State Board of Investment must be audited at least annually by a certified public accountant designated by the Auditor General of the State.
    • The audit opinion must be published as part of the ISBI’s annual report.

  • Quarterly reporting to funds

    • For the quarterly periods ending September 30, December 31, and March 31, ISBI must submit to each pension fund, retirement system, or education fund under its jurisdiction:
    • A full description of investments acquired, with average costs.
    • A full description of securities sold or exchanged, with average proceeds or exchange conditions.
    • Gains or losses realized during the period.
    • Income from investments.
    • Administrative expenses of the board.
    • The proportion of administrative expenses allocable to each funded entity.

  • Annual report to funds (within six months after fiscal year-end)

    • ISBI must prepare and submit an annual report to each pension fund, retirement system, or education fund under its jurisdiction within six months after the close of each fiscal year.
    • The fiscal year is defined as July 1 to June 30. The annual report must include:
    • Full information on investment results for the year, including the quarterly items above.
    • A listing of investments held at year-end with book values, market values, and income yields on market values.
    • Amounts from the year-end listing allocable to each fund managed by ISBI.
    • Comments on factors affecting ISBI’s operations for the year.
    • A review of the board’s policies and any changes during the year.
    • A copy of the audited financial statements for the year.
    • Recommendations for possible changes in the law governing ISBI operations.
    • A listing of securities brokers and dealers dealt with during the year, showing total commissions received by each in transactions with ISBI.

  • Non-violation contingency

    • If ISBI has not received the required audit opinion by December 15, ISBI shall not be considered in violation of the six-month reporting requirement.

Who Is Affected

  • Illinois State Board of Investment (ISBI): Primary entity affected; the bill changes reporting timelines, adds certain disclosure requirements, and clarifies consequences regarding late audit opinions.
  • Pension funds, retirement systems, and education funds under ISBI’s jurisdiction: These funds will receive more detailed quarterly and annual investment information, including costs, gains/losses, and commissions.
  • Illinois Auditor General and Certified Public Accountants: Responsible for audits and designation of the auditing CPA.

Procedural and Timeline Considerations

  • Effective date: Immediate upon enactment.
  • Fiscal year defined as July 1 – June 30.
  • Quarterly reporting deadlines correspond to fiscal quarters ending 9/30, 12/31, and 3/31.
  • Annual report deadline: Within six months after year-end (i.e., by December 31 for a June 30 year-end, though the statute specifies the six-month window to accommodate ISBI’s fiscal year).
  • If the audit opinion is not received by December 15, ISBI is not in violation of the annual reporting requirement.

Practical Implications

  • Improves clarity on handling late audit opinions and ensures continued information flow to pension funds even if an audit opinion is delayed.
  • Increases transparency by expanding the content of quarterly and annual reports, including detailed investment descriptions, costs, gains/losses, expenses, and broker commissions.
  • Creates a more formalized framework for policy review and potential legislative recommendations based on annual operations.

Status and Sponsorship

  • Introduced: February 4, 2026
  • Sponsor: Sen. Robert F. Martwick (Co-sponsor: Rob Martwick)
  • Latest actions: Passed Third Reading in April 2026 with vote 57-0-0 (House status not applicable; this is Senate text as introduced; check the latest chamber actions for final passage).

Compiled from official sources — confirm details with the bill’s official record.

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