As detailed in the Illinois Pension Code, trustees of public pension funds in the State of Illinois have a fiduciary duty to act solely in the best interest of participants and beneficiaries. An audit of the pension fund helps trustees fulfill these fiduciary duties. The following is Part 4 of our Public Pension Plan Trustee series.
Part 4 – Compliance
Public pension funds established under Articles 3 and 4 of the Illinois Pension Code must comply with various provisions of the Code. These requirements include, but are not limited to:
- Determination of creditable service
- Transfer of creditable service to/from other public pension funds
- Determination of pension benefits
- Determination of survivor/beneficiary benefits
- Determination of disability benefits
- Determination of refunds of contributions
- Making the proper deduction of required group health plan contributions
- Calculation of the employer contributions due to the pension fund from the municipality
- Establishing and maintaining a reserve to insure payment of all pension fund obligations
- Establishing a Board of Trustees through both appointment and election
- Holding regular quarterly meetings and special meetings as called by the Board President
- Control and management of pension fund investments
- Ordering payments for pension fund obligations
- Submitting an annual list of fund payments to the municipality
- Investing pension fund assets in accordance with the Illinois Pension Code
- Keeping a public record of all pension fund proceedings
- Making an annual report regarding the condition of the pension fund to the municipality
The independent certified public accountant (CPA) performs numerous procedures throughout the course of an audit and provides written communication to the Board of Trustees at its conclusion. This communication includes deficiencies in internal control and other recommendations noted during the course of the audit.
For a fund trustee, an audit typically provides written communication to the Board of Trustees with recommendations on improving internal control and other matters. Implementing these recommendations will assist the pension fund in complying with the Illinois Pension Code, its governing document.
Click here for the rest of this series.