Illinois

Major public employee retirement systems in Illinois include the Illinois Municipal Retirement Fund, Illinois State Employees Retirement System, Illinois Teachers Retirement System, and Illinois State Universities Retirement System.

Authorizing Statutes

State Employees

(40 ILCS 5/) is referred to as the Illinois Pension Code.

Sec. 14§101. Creation of system. A retirement and benefit system is created to provide retirement annuities and other benefits for employees of the State of Illinois. The system shall be known as the "State Employees' Retirement System of Illinois". By such name all its business shall be transacted and its cash and other property held in trust for the purposes of this Article. (40 ILCS 5/14§102) (from Ch. 108 1/2, par. 14§102) Sec. 14§102. Purpose. The purpose of the system is to provide an orderly means whereby aged or disabled employees may be retired from active service, without prejudice or hardship, and to enable the employees to accumulate reserves for themselves and their dependents for old age, disability, death and termination of employment, thus effecting economy and efficiency in the administration of the State Government.

Teachers

Sec. 16-101. Creation of system. Effective July 1, 1939, there is created the "Teachers' Retirement System of the State of Illinois" for the purpose of providing retirement annuities and other benefits for teachers, annuitants and beneficiaries. All of its business shall be transacted, its funds invested, and its assets held in such name.

Higher Education

(40 ILCS 5/15§101) (from Ch. 108 1/2, par. 15§101) Sec. 15§101. Creation of system. A retirement system is created to provide retirement annuities and other benefits for employees, as defined in this Article, and their dependents. The system shall be known and may be cited as State Universities Retirement System. All the business of the system shall be transacted in that name.

Local Government

Teachers' retirement systems in local jurisdictions

Sec. 17§101. Creation of fund. In each city with a population over 500,000, there is created a Public School Teachers' Pension and Retirement Fund to be maintained and administered in the manner prescribed in this Article and to be known as the Public School Teachers' Pension and Retirement Fund of ....(city).

Illinois Municipal Retirement Fund

Sec. 7§101. Creation of fund. A retirement and benefit fund to be known as the "Illinois Municipal Retirement Fund" is hereby created. (Source: Laws 1963, p. 161.) (40 ILCS 5/7§102) (from Ch. 108 1/2, par. 7§102) Sec. 7§102. Purpose. The purpose of this fund is to provide a sound and efficient system for the payment of annuities and other benefits, in addition to the annuities and benefits available, as herein provided, under the Federal Social Security Act, to certain officers and employees, and to their beneficiaries, of municipalities, as herein defined. It is the mission of this Fund to efficiently and impartially develop, implement and administer programs that provide income protection to members and their beneficiaries on behalf of participating employers in a prudent manner.

Sec. 9§101 covers county employees. Creation of fund. In each county of more than 3,000,000 inhabitants a County Employees' and Officers' Annuity and Benefit Fund shall be created, set apart, maintained and administered, in the manner prescribed in this Article, for the benefit of the employees and officers herein designated and their beneficiaries.

Board Composition

Legal Protections

Article XIII, Section 5 of the Illinois State Constitution states: 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.

• A Detailed Analysis of the Illinois Constitution's Pension Clause, Illinois State Senate Democratic Caucus Staff

Contributions

Per the U.S. Census, in FY 2015, employer contributions to Illinois state and local government pension plans were 8.71 percent of all state and local government direct general spending.

Constitutional Protections

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