SB2046 94TH GENERAL ASSEMBLY

LRB094 11240 AMC 42360 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2046

Introduced 2/25/2005, by Sen. Iris Y. Martinez

SYNOPSIS AS INTRODUCED:

40 ILCS 5/1-109.3 new
40 ILCS 5/1-109.4 new
40 ILCS 5/1A-109.1 new
40 ILCS 5/1A-113
30 ILCS 805/8.29 new

Amends the Illinois Pension Code. Creates the General Assembly Task Force on Financial Asset Management and Investment to better enforce compliance with provisions concerning emerging investment managers, assist the General Assembly in the review and clarification of certain material, develop standardized reporting forms that all pension funds are required to complete, and provide recommendations and suggestions to the General Assembly for improvement in the reporting process of pension funds and recommendations for improving the opportunity of emerging Illinois-based firms to participate in the management of pension fund assets. Provides that the Senate Committee on Pensions and Investments may administer oaths and affirmations and summon and compel the attendance of and examine under oath any officer, trustee, agent, actuary, attorney, or employee connected either directly or indirectly with any pension fund, or any other person having information regarding the condition, affairs, management, and administration of a pension fund. Provides that the Committee may require any person having possession of any record, book, paper, contract, or other document pertaining to a pension fund to surrender it or to otherwise afford the Committee access to it. Provides enforcement procedures. Provides that pension funds shall publish minutes, agendas, requests for proposal, and requests for information concerning all efforts at encouraging the maximum participation of emerging Illinois-based firms and shall provide to the Governor and the General Assembly data regarding participation that sets forth the commissions and fees received by qualified firms, and any fee-sharing arrangements, rebates, or other agreements in which the firms share their compensation with other business entities. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning public employee benefits.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Pension Code is amended by adding Sections 1-109.3, 1-109.4, and 1A-109.1 and changing Section 1A-113 as follows:

(40 ILCS 5/1-109.3 new)

Sec. 1-109.3. General Assembly Task Force.

(a) There is created the General Assembly Task Force on Financial Asset Management and Investment to better enforce compliance with the provisions of Section 1-109.1(4) of this Code. The Task Force shall consist of the following members:

(1) One member of the General Assembly appointed by the Senate President.

(2) One member of the General Assembly appointed by the Senate Minority Leader.

(3) One member of the General Assembly appointed by the Speaker of the House.

(4) One member of the General Assembly appointed by the House Minority Leader.

(5) The following members appointed by the 4 legislative leaders and approved by the members of the Senate:

(A) One member representing the pension funds established under this Code.

(B) One member appointed from among the ranks of emerging Illinois-based asset management professionals.

(C) One member appointed from the ranks of emerging Illinois-based broker-dealers.

(b) The members of the Task Force shall have the authority to meet on a quarterly basis to assist the General Assembly in the review and clarification of the material provided under the provisions of this Code. The Task Force shall further develop, at the General Assembly's direction, standardized reporting forms that all pension funds are required to complete. The Task Force is directed to ensure that these forms present all information in a clear and concise manner, in terms that are readily understandable. These report formats shall, upon completion, also be employed by pension funds in the filing of the Emerging Manager Report already required under Section 1-109.1(4).

(c) The Task Force shall also provide, on a quarterly basis, recommendations and suggestions to the General Assembly for improvement in the reporting process of pension funds and recommendations for improving the opportunity of emerging Illinois-based firms to participate in the management of pension fund assets.

(d) For the purposes of this Section, "pension fund" means any public pension fund, annuity and benefit fund, or retirement system established under this Code.

(40 ILCS 5/1-109.4 new)

Sec. 1-109.4. Senate Committee on Pensions and Investments. The Senate Committee on Pensions and Investments may administer oaths and affirmations and summon and compel the attendance of and examine under oath any officer, trustee, agent, actuary, attorney, or employee connected either directly or indirectly with any pension fund, or any other person having information regarding the condition, affairs, management, or administration of a pension fund. The Committee may require any person having possession of any record, book, paper, contract, or other document pertaining to a pension fund to surrender it or to otherwise afford the Committee access to it.

If any person fails to obey the summons of the Committee or refuses to surrender or afford access to any such record, book, paper, contract, or other document, then the Committee may apply to the circuit court of the county in which the principal office of the pension fund involved is located, and the court, if it finds that the Committee has not exceeded its authority in the matter, may, by order duly entered, require the attendance of witnesses and the production of all relevant documents required by the Committee in carrying out its responsibilities under this Code. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt of court.

For the purposes of this Section, "pension fund" means any public pension fund, annuity and benefit fund, or retirement system established under this Code.

(40 ILCS 5/1A-109.1 new)

Sec. 1A-109.1. Quarterly statements.

(a) For the purposes of this Section, "firm" means a business engaged in the active management of financial and other assets and includes, but is not limited to, securities traders and asset and investment managers.

(b) Pension funds shall publish quarterly minutes, agendas, requests for proposals, and requests for information concerning all efforts at encouraging the maximum participation of emerging Illinois-based firms. The minutes, agendas, requests for proposals, and requests for information shall also include data detailing the percentage increases in utilization and participation rates for such firms since the previous reporting period.

(c) Pension funds shall provide to the Governor and the General Assembly data regarding participation that, in a transparent and clear manner, sets forth the commissions and fees received by qualified firms, and any fee-sharing arrangements, rebates, or other agreements in which the firms share their compensation with other business entities.

(40 ILCS 5/1A-113)

Sec. 1A-113. Penalties.

(a) A pension fund that fails, without just cause, to file its annual statement within the time prescribed under Section 1A-109, or to file its quarterly statement as required under Section 1-109.4, shall pay to the Department a penalty to be determined by the Department, which shall not exceed $100 for each day's delay.

(b) A pension fund that fails, without just cause, to file its actuarial statement within the time prescribed under Section 1A-110 or 1A-111 shall pay to the Department a penalty to be determined by the Department, which shall not exceed $100 for each day's delay.

(c) A pension fund that fails to pay a fee within the time prescribed under Section 1A-112 shall pay to the Department a penalty of 5% of the amount of the fee for each month or part of a month that the fee is late. The entire penalty shall not exceed 25% of the fee due.

(d) This subsection applies to any governmental unit, as defined in Section 1A-102, that is subject to any law establishing a pension fund or retirement system for the benefit of employees of the governmental unit.

Whenever the Division determines by examination, investigation, or in any other manner that the governing body or any elected or appointed officer or official of a governmental unit has failed to comply with any provision of that law:

(1) The Director shall notify in writing the governing body, officer, or official of the specific provision or provisions of the law with which the person has failed to comply.

(2) Upon receipt of the notice, the person notified shall take immediate steps to comply with the provisions of law specified in the notice.

(3) If the person notified fails to comply within a reasonable time after receiving the notice, the Director may hold a hearing at which the person notified may show cause for noncompliance with the law.

(4) If upon hearing the Director determines that good and sufficient cause for noncompliance has not been shown, the Director may order the person to submit evidence of compliance within a specified period of not less than 30 days.

(5) If evidence of compliance has not been submitted to the Director within the period of time prescribed in the order and no administrative appeal from the order has been initiated, the Director may assess a civil penalty of up to $2,000 against the governing body, officer, or official for each noncompliance with an order of the Director.

The Director shall develop by rule, with as much specificity as practicable, the standards and criteria to be used in assessing penalties and their amounts. The standards and criteria shall include, but need not be limited to, consideration of evidence of efforts made in good faith to comply with applicable legal requirements. This rulemaking is subject to the provisions of the Illinois Administrative Procedure Act.

If a penalty is not paid within 30 days of the date of assessment, the Director without further notice shall report the act of noncompliance to the Attorney General of this State. It shall be the duty of the Attorney General or, if the Attorney General so designates, the State's Attorney of the county in which the governmental unit is located to apply promptly by complaint on relation of the Director of Insurance in the name of the people of the State of Illinois, as plaintiff, to the circuit court of the county in which the governmental unit is located for enforcement of the penalty prescribed in this subsection or for such additional relief as the nature of the case and the interest of the employees of the governmental unit or the public may require.

(e) Whoever knowingly makes a false certificate, entry, or memorandum upon any of the books or papers pertaining to any pension fund or upon any statement, report, or exhibit filed or offered for file with the Division or the Director of Insurance in the course of any examination, inquiry, or investigation, with intent to deceive the Director, the Division, or any of its employees is guilty of a Class A misdemeanor.

(Source: P.A. 90-507, eff. 8-22-97.)

Section 90. The State Mandates Act is amended by adding Section 8.29 as follows:

(30 ILCS 805/8.29 new)

Sec. 8.29. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 94th General Assembly.

Section 99. Effective date. This Act takes effect upon becoming law.