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HB 5119

PEN CD-PENSION FUND REGULATION

104th Regular Session Introduced by Stephanie Kifowit and 1 co-sponsor

HB5119 shifts the Public Pension Division to a flexible advisory role, boosts independent audits and detailed reporting, and tightens penalties for late filings.

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Bill Summary · HB 5119

Overview

HB5119 (Illinois, 104th General Assembly) amends the Regulation of Public Pension Funds Article of the Illinois Pension Code. The bill primarily adjusts governance and reporting provisions for the Public Pension Division within the Department of Insurance, with specific changes to advisory role, reporting, penalties, and related administrative aspects. It also repeals the Advisory Commission on Pension Benefits.

Main purpose and intent

  • Clarify and recalibrate the Public Pension Division’s authority and procedures in relation to public pension funds.
  • Permit advisory services (rather than mandatory “shall” duties) and adjust where recommendations appear (examination reports and biennial General Assembly reports).
  • Enhance transparency and accountability regarding examinations and financial reporting, including independent audit inputs for certain funds.
  • Streamline penalties and enforcement related to late filings and noncompliance, and repeal an advisory body.

Key provisions and changes

  • Public Pension Division advisory role (Section 1A-106):

    • The Division “may render advisory services” to pension funds on operations (instead of “shall”).
    • Recommendations for corrective/clarifying legislation “may be” included in both:
    • the examination report for a specific pension fund, and
    • the biennial report to the General Assembly (Section 1A-108).
    • Recommendations can address a broad range of matters (payments, investments, books/records, etc.).

  • Independent CPA examinations (Section 1A-108):

    • Reports to the Governor and General Assembly shall include results of examinations performed by an independent CPA retained by the Police Officers’ Pension Investment Fund or the Firefighters’ Pension Investment Fund for downstate funds.

  • Downstate funds reporting on nontransferable assets (Section 1A-108):

    • Downstate police and firefighter pension funds must include in their annual report details on transactions involving nontransferable assets retained after transferring investments to the Police Officers’ Pension Investment Fund or Firefighters’ Pension Investment Fund.

  • Penalty timing and enforcement (Section 1A-113):

    • If a penalty is not paid within 30 days and there is no just cause, the Director of Insurance may (instead of “shall”) report the act of noncompliance to the Attorney General for enforcement.

  • Repeal of Advisory Commission (implicit in text):

    • Provisions establishing the Advisory Commission on Pension Benefits are repealed.

  • Automation and reporting framework (Sections 1A-107, 1A-108, 1A-109):

    • Maintain and emphasize automation of Division operations and data exchange with pension funds (agenda preexisting language retained).
    • Annual statements and financial reporting requirements continue, with Form/content to be designed by the Division.
    • Reporting to the Governor/General Assembly continues, with copies distributed as required.

  • Annual statements (Section 1A-109):

    • Pension funds must file annual statements detailing balance sheets, income/expenditures, actuarial balance sheets, participant demographics, disability/claims data, investment transactions (including nontransferable asset details for Article 3/4 funds), administrative expenses, and other data necessary for financial appraisal.
    • Direct data transfers from the Consolidated Fund to the Division for Article 3/4 funds after transition, plus continued cooperative responsibilities.

  • Penalty structure (Section 1A-113, detailed):

    • Late annual statements: up to $100 per day (no just cause).
    • Late actuarial statements: up to $100 per day.
    • Late fee payments: 5% per month late, up to 25% total.
    • Noncompliance penalties and enforcement procedures for governmental units, including potential court action with penalties up to $2,000 per act of noncompliance, and an established rulemaking process for penalties.

  • Offense and defect provisions:

    • False certificates or misstatements related to examinations or filings are punishable as Class A misdemeanor.
    • Subsections related to penalties apply to Article 3/4 funds before transition; not applicable to Consolidated Funds.

  • Section 1A-201 repealed:

    • Repeals the existing Section 1A-201, effect unspecified in excerpt but indicates consolidation of provisions.

Who and what is affected

  • Public Pension Division within the Illinois Department of Insurance (primary administrator and oversight body).
  • Illinois public pension funds governed under Article 3 (municipal police and related funds) and Article 4 (municipal firefighter funds) as well as downstate police and firefighter funds subject to related reporting and examinations.
  • Police Officers’ Pension Investment Fund and Firefighters’ Pension Investment Fund (in relation to independent CPA examinations and reporting).
  • State Governor, General Assembly, and potentially the Attorney General (for enforcement actions arising from penalties or noncompliance).
  • Governmental units (cities, towns, and municipalities with pension funds) subject to penalties and enforcement procedures.

Procedural and timeline aspects

  • Advisory and reporting: Recommendations may be included in examination reports and biennial General Assembly reports; independent CPA examination results to be included in governor/general assembly reports.
  • Annual reporting: Pension funds must file annual statements with the Division within six months after the close of the fiscal year; penalties apply for late filings.
  • Penalties: Structured per-day, per-month, and enforcement pathways, with potential court action if penalties remain unpaid.
  • Automation: Ongoing modernization of Division operations and data exchanges; specific milestones referenced (electronic exchange by FY 2000 in the original language) but current text emphasizes automation and data confidentiality.
  • Repeal of Advisory Commission on Pension Benefits: Removes that body from the governance structure (no specified replacement in the bill text).

Summary

HB5119 realigns the Illinois Public Pension Division to a more flexible advisory role, expands data-driven reporting including independent CPA findings for certain funds, and strengthens enforcement mechanisms while reducing mandatory directives. It emphasizes transparency through enhanced reporting (including downstate asset specifics) and leverages automation for pension fund data exchanges. The bill also removes the Advisory Commission on Pension Benefits and introduces a clarified penalty and enforcement framework for late filings and noncompliance.

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

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