HB3361ham002 97TH GENERAL ASSEMBLY

Rep. Kevin A. McCarthy

Filed: 3/16/2011

09700HB3361ham002 LRB097 08382 RLJ 53052 a

AMENDMENT TO HOUSE BILL 3361

AMENDMENT NO. ______. Amend House Bill 3361 by replacing everything after the enacting clause with the following:

"Section 5. The Department of Central Management Services Law of the Civil Administrative Code of Illinois is amended by adding Section 405-520 as follows:

(20 ILCS 405/405-520 new)

Sec. 405-520. Supplemental employee deferral plan. The Department may establish, administer, manage, and operate a supplemental employee deferral plan to supplement and enhance the retirement income of employees of public school districts and community colleges. As used in this Section, "supplemental employee deferral plan" means a tax deferred annuity described in Section 403(b) of the Internal Revenue Code, including a custodial account described in Section 403(b)(7) of the Internal Revenue Code. The supplemental employee deferral plan shall comply with all applicable provisions of Section 403(b) of the Internal Revenue Code. If a school district or community college district elects to participate in the supplemental employee deferral plan, any employee of the school district or community college district who meets the eligibility requirements prescribed by the Department may participate in the plan.

Notwithstanding any law to the contrary, participation in the supplemental employee deferral plan authorizes the participant's employer to make salary reductions from the participant's compensation and contribute the salary reductions to the plan. An employer may make employer contributions to the supplemental employee deferral plan if the plan permits. Any compensation deferred under a supplemental employee deferral plan shall continue to be included as regular compensation for the purpose of computing the retirement and pension benefits earned by an employee. As used in this Section, "compensation" includes compensation received in a lump sum for accumulated unused vacation time, personal leave, or sick leave. Employee contributions and earnings on employee contributions are immediately vested. Employer contributions, if any, and the earnings on employer contributions shall vest according to the schedule established in the plan.

The supplemental employee deferral plan shall provide for the recovery of any administrative expenses against the earnings from investments or by charging fees equitably prorated among the participants or by any other appropriate and equitable method as the Department shall determine. Different methods for recovery of administrative expenses may be provided in relation to the different types of investment programs and the Department may provide for the allocation of administration expenses among varying types of programs for this purpose.

The Department may employ services that the Department deems necessary for the operation and administration of the plan and may administer the plan through a third-party vendor. The supplemental employee deferral plan may be invested in any investments as are deemed acceptable by the Department including, but not limited to, life insurance or annuity contracts or mutual funds. All insurance, annuities, mutual funds, or other investments used under this plan must be reviewed and selected by the Department based on a competitive bidding process as established by such specifications and considerations as are deemed appropriate by the Department.

The Director shall discharge his or her duties with respect to the supplemental employee deferral plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims.

Upon the creation of the supplemental employee deferral plan, the Director shall give bond with 2 or more sufficient sureties, payable to and for the benefit of the participants in the supplemental employee deferral plan, in the penal sum of $1,000,000, conditioned upon the faithful discharge of his or her duties in relation to the supplemental employee deferral plan.".