Illinois

Overview

Major public employee retirement systems in Illinois include the Illinois Municipal Retirement Fund (IMRF), Illinois State Employees Retirement System (SERS), Illinois Teachers Retirement System (TRS), and Illinois State Universities Retirement System (SURS).

Plan Design

Defined benefit plans serve as the primary retirement benefit for substantially all public employees in Illinois.

According to the US Government Accountability Office, 36 percent of employees of state and local government in Illinois participate in Social Security.

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Authorizing Statutes and Board Structure

40 ILCS 5/7-101 creates the Illinois Municipal Retirement Fund. 40 ILCS 5/7-174 establishes the 8-member retirement board.

40 ILCS 5/16-101 creates the Illinois Teachers’ Retirement System. 40 ILCS 5/16-163 establishes the 15-member retirement board.

40 ILCS 5/14-101 creates the Illinois State Employees’ Retirement System. 40 ILCS 5/14-134 establishes the 7-member board of trustees.

40 ILCS 5/15-101 creates the Illinois State Universities’ Retirement System. 40 ILCS 5/15-159 establishes the 11-member board of trustees. 

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

40 ILCS 5/1-109 states:

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 interest of the participants and beneficiaries and:
        (a) for the exclusive purpose of:
            (1) providing benefits to participants and their beneficiaries; and
            (2) defraying reasonable expenses of administering the retirement system or pension fund;
        (b) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims;
        (c) by diversifying the investments of the retirement system or pension fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
        (d) in accordance with the provisions of the Article of this Code governing the retirement system or pension fund.

Legal Protections of Retirement Benefits

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. DiFalco v. Board of Trustees, 521 N.E.2d 923 (Ill. 1988)(contractual relationship is governed by terms of pension code at the time the employee becomes a member of the retirement system); People ex rei. Sklodowski v. State, 695 N.E.2d 374 (Ill. 1998)(underfunding claim alleging failure to make required contributions was not actionable since state constitutional provision was intended to create contractual right to benefits, without freezing politically sensitive area of pension financing); Bosco v. Chicago Transit Authority, 164 F.Supp.2d 1040 (N.D. Ill. 2001)(participant is entitled to public employee pension based on status of system when their rights in system vested, either at time of entering system or when clause became effective, whichever is later). (IL CONST., Article XIII, §5) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits

See also the following search tools:

More Data

• Public Fund Survey Summary of Findings
• Roll Call (NASRA members-only)