Section 4435.10  Purpose

 

This Part sets forth the procedural requirements and penalty fee schedules for pension funds, governmental units or elected or appointed officials of a governmental unit that fail to comply with the requirements of the Illinois Pension Code and the Department of Insurance's administrative regulations implementing the Illinois Pension Code.

 

Section 4435.20  Applicability

 

This Part applies to any pension fund, governmental unit or elected or appointed officials of a governmental unit that is subject to any law establishing a pension fund or retirement system for the benefit of employees of the governmental unit [40 ILCS 5/1A-113(d)] (see P.A. 90-507, effective August 22, 1997).

 

Section 4435.30  Definitions

 

            Actuarial Statement means the informational filing as required by Section 1A-110 or 1A-111 of the Illinois Pension Code [40 ILCS 5/1A-110 and 1A-111] (see P.A. 90-507, effective August 22, 1997), which is filed in conjunction with the annual statement.

 

            Annual Statement means the information filed by pension funds pursuant to Section 1A-109 of the Illinois Pension Code [40 ILCS 5/1A-109] (see P.A. 90-507, effective August 22, 1997).

 

            Annual Compliance Fee means the fee paid to the Department by pension funds pursuant to Section 1A-112 of the Illinois Pension Code [40 ILCS 5/1A-112] (see P.A. 90-507, effective August 22, 1997).

 

            Code means the Illinois Pension Code [40 ILCS 5].

 

            Department means the Department of Insurance of the State of Illinois [40 ILCS 5/1A-102] (see P.A. 90-507, effective August 22, 1997).

 

            Division means the Public Pension Division of the Department of Insurance [40 ILCS 5/1A-102] (see P.A. 90-507, effective August 22, 1997).

 

            Governmental Unit means the State of Illinois, any instrumentality or agency thereof (except transit authorities or agencies operating within or within and without cities with a population over 3,000,000), and any political subdivision or municipal corporation that establishes and maintains a public pension fund [40 ILCS 5/1A-102] (see P.A. 90-507, effective August 22, 1997).

 

            Pension Fund means any public pension fund, annuity and benefit fund, or retirement system established under the Illinois Pension Code [40 ILCS 5/1A-102] (see P.A. 90-507, effective August 22, 1997).

 

Section 4435.40  Notification of Noncompliance

 

The Division shall provide written notification to each pension fund, governmental unit or elected or appointed official of a governmental unit of the specific provision(s) of the Code and/or the Department's regulation(s) with which the pension fund, governmental unit or elected or appointed official of a governmental unit has failed to comply [40 ILCS 5/1A-113(d)(1)] (see P.A. 90-507, effective August 22, 1997).  Each notification shall clearly state the Code provision(s) and/or regulation Section(s) violated, the basis for the Division's determination of noncompliance, the possible penalty amount associated with the noncompliance and, if applicable, the reasonable time, as determined by Section 4435.50 of this Part, by which the pension fund, governmental unit or elected or appointed official of a governmental unit may achieve compliance after receipt of this notification.

 

Section 4435.50  Reasonable Compliance Period for Notification

 

a)         Upon receipt of the noncompliance notification described in Section 4435.40, other than a notification for failure to timely file pursuant to Section 1A-113(a), (b) and (c) of the Code, the pension fund, governmental unit or elected or appointed official of a governmental unit notified shall take immediate steps to comply with the provisions of the Code and/or Department's regulation(s) specified in the notice [40 ILCS 5/1A-113(d)(2)] (see P.A. 90-507, effective August 22, 1997).

 

b)         If the pension fund, governmental unit or elected or appointed official of a governmental unit notified fails to comply with the provision(s) of the Code and/or Department's regulation(s) specified in the noncompliance notification within 30 days after receipt of such notification, the Director may hold a hearing pursuant to Section 4435.80 of this Part to determine if a penalty should be assessed in accordance with the procedures set forth in Section 4435.60 of this Part (see 40 ILCS 5/1A-113(d)(3), P.A. 90-507, effective August 22, 1997).

 

Section 4435.60 Director's Determination of Noncompliance

 

a)         If the Director, upon hearing held pursuant to Section 4435.80 of this Part, determines that good and sufficient cause for noncompliance has not been shown, the Director may order the pension fund, governmental unit or elected or appointed official of a governmental unit to submit evidence of compliance within a specified period of not less than 30 days [40 ILCS 5/1A-113(d)(4)](see P.A. 90-507, effective August 22, 1997).

 

b)         If evidence of compliance is submitted within the specified period as set forth by order of the Director in subsection (a) of this Section, the Director shall issue a notification of compliance to the pension fund, governmental unit or elected or appointed official of a governmental unit.

 

c)         If evidence of compliance has not been submitted to the Director within the period of time prescribed in the order pursuant to subsection (a) of this Section and no administrative appeal from the order has been initiated, the Director may assess a civil penalty of up to $2,000 against the pension fund, governmental unit or elected or appointed official of a governmental unit for each noncompliance with an order of the Director [40 ILCS 5/1A-113(d)(5)] (see P.A. 90-507, effective August 22, 1997).

 

Section 4435.70 Director's Determination of Failure to Timely File

 

a)         If the Director determines that any pension fund has failed, without good and sufficient cause, to file its annual statement within the time prescribed by Section 1A-109 of the Code, the Director may order the pension fund to pay a penalty, which shall not exceed $100 for each day's delay [40 ILCS 5/1A-113(a)].

 

b)         If the Director determines that any pension fund has failed, without good and sufficient cause, to file its actuarial statement within the time prescribed by Section 1A-110 or 1A-111 of the Code, the Director may order the pension fund to pay a penalty, which shall not exceed $100 for each day's delay [40 ILCS 5/1A-113(b)].

 

c)         If the Director determines that any pension fund has failed to pay a fee within the time prescribed by Section 1A-112 of the Code, the Director may order the pension fund to pay a penalty of 5% of the amount of the annual compliance fee for each month, or part of a month, that the annual compliance fee is late.  The fee shall not exceed 25% of the total amount of the fee due.

 

(Source:  Amended at 43 Ill. Reg. 417, effective December 21, 2018)

 

Section 4435.80 Hearing to Show Good and Sufficient Cause

 

a)         If the Director determines that a hearing should be held to allow a demonstration of good and sufficient cause pursuant to either Section 4435.50 or Section 4435.70, or if a pension fund subject to penalties under Section 4435.70 requests a hearing, the hearing shall be conducted pursuant to the procedures set forth in 50 Ill. Adm. Code 2402, except that, if more specific procedures are set forth in this Part, then the more specific procedures apply.

 

b)         At the hearing, the burden of proof to show good and sufficient cause for failure to comply with the requirements of the Code and/or Department regulations shall be on the pension fund, governmental unit, or elected or appointed officials of a governmental unit notified pursuant to Section 4435.40.

 

c)         In determining whether the pension fund, governmental unit, or elected or appointed official of a governmental unit has met the burden of proof as required by subsection (b), the Director may consider, but is not limited to, the following:

 

1)         Evidence that, due to no fault of the pension fund, governmental unit, or elected or appointed official of a governmental unit, there was an unforeseeable or unexpected delay or occurrence;

 

2)         Evidence of an uncontrollable circumstance; and

 

3)         Evidence pertaining to Acts of God.

 

d)         The Director, in determining that the pension fund, governmental unit, or elected or appointed official of a governmental unit has failed to meet the burden of proof required by subsection (b), will consider, but is not limited to, the following:

 

1)         Evidence or claims of ignorance of the requirements of the Code and/or Department regulations; and

 

2)         Evidence of irresponsibility and/or mismanagement on the part of the pension fund, governmental unit, or elected or appointed official of a governmental unit notified.

 

(Source:  Amended at 43 Ill. Reg. 417, effective December 21, 2018)