Section 4439.10  Purpose

 

The purpose of this Part is to set forth the processes, procedures and requirements necessary for the dissolution of an inactive Article 3 police pension fund or an inactive Article 4 firefighters’ pension fund, and the processes, procedures and requirements for the reestablishment of a dissolved Article 3 police pension fund or a dissolved Article 4 firefighters' pension fund pursuant to Sections 3-144.6 and 4-106.1 of the Illinois Pension Code [40 ILCS 5/3-144.6 and 4-106.1].

 

Section 4439.20  Applicability

 

This Part shall apply to the pension funds established under either Article 3 or Article 4 of the Code for which Section 3-144.6 or 4-106.1 applies.

 

Section 4439.30  Definitions

 

"Active member" means a police officer or firefighter who is in active service and a participant of a pension fund established pursuant to Article 3 or Article 4 of the Code, respectively.

 

"Beneficiary" means a person eligible for or receiving benefits from a pension fund as provided in the Article of the Code under which the pension fund is established.

 

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

 

"Creditable service" shall have the same meaning as in Section 3-110 or 4-108 of the Code.

 

"Current pension fund" means the pension fund currently being dissolved.

 

"Current value" means the fair market value, when available; otherwise, the fair value as determined in good faith by the municipality, assuming an orderly liquidation at the time of the determination.

 

"Date of refund" means the date the police officer or firefighter received a refund from the respective pension fund pursuant to Section 3-124 or 4-116 of the Code.

 

"Director" means the Director of the Illinois Department of Insurance.

 

"Firefighter" shall have the same meaning as in Section 4-106 of the Code.

 

"Former firefighter" means an individual who terminated service with the municipal fire department and requested and received a refund of employee contributions from the firefighters' pension fund.

 

"Former police officer" means an individual who terminated service with the municipal police department and requested and received a refund of employee contributions from the police pension fund.

 

"Independent auditor" means an independent certified public accountant or independent accounting firm in good standing with the American Institute of CPAs and all states in which the accountant is licensed to practice.

 

"Municipality" shall have the same meaning as in Section 3-103 of the Code for police pension funds and in Section 4-103 of the Code for firefighters' pension funds.

 

"Participant" means a police officer, firefighter, deferred pensioner or beneficiary of the respective pension fund. Participant also includes anyone who terminated service prior to being eligible to receive a benefit and has not requested and received a refund of contributions.

 

"Pension Division" means the Public Pension Division of the Illinois Department of Insurance.

 

"Police officer" or "Officer" shall have the same meaning as in Section 3-106 of the Code.

 

"Prior pension fund" means the pension fund in which the police officer or firefighter had accumulated creditable service time prior to becoming a member of the current pension fund.

 

"Refund" means the amount of contributions a police officer or firefighter received pursuant to Section 3-124 or 4-116 of the Code, respectively.

 

Section 4439.40  Dissolution of Pension Fund

 

a)         The corporate authorities of a municipality in which an Article 3 or Article 4 pension fund has been established may choose to dissolve the pension fund by resolution or ordinance if an independent auditor has certified to the authorities that the fund has no liabilities, no participants and no annuitants or beneficiaries entitled to benefits currently or in the future; the Pension Division performs a final examination of the pension fund; and all former police officers and firefighters are informed of the intent to dissolve the pension fund.

 

b)         The corporate authorities of a municipality shall not dissolve an Article 3 or Article 4 pension fund prior to the independent auditor certifying to the authorities that the fund has no liabilities, no participants and no annuitants or beneficiaries entitled to benefits currently or in the future, and the requirements of Sections 4439.50 and 4439.60 are complete.  The cost of this certification shall be borne by the municipality.

 

c)         The corporate authorities of a municipality shall not dissolve an Article 3 or Article 4 pension fund prior to the Pension Division performing a final examination of the pension fund that includes, but is not limited to, a review of independent auditor certification as required in Section 4439.50.  The corporate authorities of a municipality shall not dissolve the pension fund prior to the municipality receiving a certification from the Pension Division that the municipality has complied with the requirements set forth in this Section.

 

d)         The corporate authorities of a municipality shall notify all former police officers identified in the independent auditor certification of the intent to dissolve the Article 3 police pension fund and all former firefighters identified in the independent auditor certification of the intent to dissolve the Article 4 firefighters' pension fund by certified letter to the last known address and by public notice 60 days prior to the dissolution of the pension fund.

 

Section 4439.50  Requirements of Independent Auditor Certification

 

a)                  Prior to the corporate authorities of a municipality dissolving the pension fund by resolution or ordinance, an independent auditor must certify to the authorities that the pension fund has no liabilities, no participants and no beneficiaries, and no deferred pensioners entitled to benefits currently or in the future. A copy of the independent auditor certification shall be submitted to the Pension Division within 30 days after completion of the certification. The municipality shall include with the submission to the Pension Division, if not already included in the independent auditor certification, a copy of the independent auditor's report, including, but not limited to, the information required in subsection (b).

 

b)         The audit shall include, but not be limited to:

 

1)         a review of the most recent annual report filed with the Pension Division;

 

2)         a review of the assets held in the name of the pension fund, recording in the audit report the assets and the current value of the assets;

 

3)         a determination of whether the pension fund has any remaining participants or beneficiaries or former members who have not received a refund;

 

4)         a determination of whether the pension fund has any remaining liabilities, including a report of any remaining liabilities of the pension fund;

 

5)         a determination of whether the pension fund has any former members who have received a refund, recording the individual's:

 

A)        Name;

 

B)        Original date of hire;

 

C)        Date of termination;

 

D)        Dates of any disability or service breaks;

 

E)        Creditable service time in the pension fund;

 

F)         Date of refund; and

 

G)        Amount of refund.

 

Section 4439.60  Resolution or Ordinance to Dissolve the Pension Fund

 

a)         The corporate authorities of a municipality in which an Article 3 or Article 4 pension fund has been established may dissolve the pension fund by resolution or ordinance after completion of the requirements in Section 4439.40. 

 

b)         The corporate authorities of the municipality in which an Article 3 or Article 4 pension fund has been dissolved shall submit to the Pension Division a copy of the signed and dated resolution or ordinance dissolving the pension fund within 30 days after passage.

 

Section 4439.70  Re-establishment of Dissolved Pension Fund – New Hires

 

The corporate authorities of a municipality in which an Article 3 police pension fund or Article 4 firefighters' pension fund has been dissolved in accordance with Section 3-144.6 or 4-106.1 of the Code, respectively, shall re-establish the pension fund if a police officer, as defined in Section 3-106, or a firefighter, as defined in Section 4-106, is hired by the municipality subsequent to the pension fund's dissolution. The pension fund shall be re-established in the same manner as it was originally established under Section 3-101 or 4-101 of the Code.

 

Section 4439.80  Re-establishment of Dissolved Pension Fund – Reinstate Service in an Article 3 Police Pension Fund

 

a)         The corporate authorities of a municipality in which an Article 3 police pension fund has been dissolved in accordance with Section 3-144.6 shall temporarily

re-establish the pension fund if a former police officer's reinstatement of creditable service is required under Section 3-110.7(b) of the Code and 50 Ill. Adm. Code 4404.

 

b)         Upon receipt of notification by the municipality of the former police officer's intent to transfer creditable service under Section 3-110(d) of the Code, as required in 50 Ill. Adm. Code 4404.60, the municipality shall provide the former officer and the former officer's current pension fund with the information required of the prior fund in 50 Ill. Adm. Code 4404.70, as if the municipality was the prior pension fund.

 

c)         When the municipality receives a final authorization to transfer creditable service from the former officer's current pension fund, as required by 50 Ill. Adm. Code 4404.100, and the repayment of the refund with interest from the former officer as required in 50 Ill. Adm. Code 4404.90(a)(1), the municipality must transfer the designated creditable service time to the former police officer's current pension fund, along with all monies required to be transferred pursuant to 50 Ill. Adm. Code 4404.100(b). 

 

d)         Upon the municipality's payment of all monies prescribed to the former police officer's current pension fund, the temporarily re-established police pension fund shall be considered dissolved.

 

Section 4439.90  Re-establishment of Dissolved Pension Fund – Reinstate Service in an Article 4 Firefighters Pension Fund

 

a)         The corporate authorities of a municipality in which an Article 4 firefighters' pension fund has been dissolved in accordance with Section 4-106.1 of the Code shall re-establish the pension fund if a former firefighter's reinstatement of creditable service is required under Section 4-109.3(g) of the Code.

 

b)         Benefits under Section 4-109.3 of the Code

 

1)         A former firefighter who wants to receive benefits under Section 4-109.3 of the Code shall submit to the municipality:

 

A)        notification of the intent to receive benefits, as required by Section 4-109.3(h) of the Code;

 

B)        payment of the amount of refund received from the firefighter, with interest, as required by Section 4-109.3(g) of the Code; and

 

C)        the additional contribution, with interest, required under Section 4-109.3(i) of the Code.

 

2)         When the firefighter has adequately complied with the requirements of subsection (b)(1), the municipality shall re-establish the firefighters' pension fund in the same manner as it was originally established under Section 4-101 of the Code.

 

c)         The board of trustees for the re-established pension fund created under subsections (a) and (b) shall consist of the former firefighter and two members appointed by the mayor or president of the board of trustees of the municipality or fire protection district involved. If two or three former firefighters reinstate creditable service in the re-established pension fund, those former firefighters shall sit on the board of trustees with the two appointed members. If more than three former firefighters reinstate creditable service in the re-established pension fund, or the municipality hires a full time firefighter, the board of trustees shall be created in the manner prescribed in Section 4-121 of the Code.