HB3865sam001 97TH GENERAL ASSEMBLY

Sen. Susan Garrett

Filed: 4/27/2012

09700HB3865sam001 LRB097 14296 JDS 68989 a

AMENDMENT TO HOUSE BILL 3865

AMENDMENT NO. ______. Amend House Bill 3865 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Pension Code is amended by changing Section 24-107 as follows:

(40 ILCS 5/24-107) (from Ch. 108 1/2, par. 24-107)

Sec. 24-107. Local government plans.

(a) Any unit of local government or school district may establish for its employees a deferred compensation or tax sheltered annuity plan program. Participation shall be by written agreement between each employee and the legislative authority of the unit of local government or school district providing for the deferral of such compensation and the subsequent investment and administration of such funds.

(a-5) Beginning January 1, 2013, any investment provider to a deferred compensation or tax sheltered annuity plan offered by a unit of local government or school district to its employees shall disclose information in a summary form to plan participants for each investment product that the provider makes available to plan participants. The summary form shall:

(1) be in a format developed in conjunction with organizations representing employees of units of local government and employees of school districts;

(2) identify all services, including how those services will be provided and whether they will be provided by a licensed advisor or licensed agent;

(3) identify all fees that may be paid by a plan participant;

(4) provide the investment-related information that the U.S. Department of Labor requires to be disclosed in its model comparative chart for plans that are subject to the Employee Retirement Income Security Act of 1974 (ERISA), in the format specified by the U.S. Department of Labor for the disclosure of that information; and

(5) identify (i) all payments that are made to third parties, including all recipients of commissions, other payments, or both, and that are related to the purchase or deposit of the product, (ii) the types of payments those parties are eligible to receive, and (iii) all payments that have been promised to those parties for endorsements, marketing, or promoting the product and that have not been disclosed.

(b) Any unit of local government may establish an employer-funded money purchase retirement plan for those of its full time employees who are not eligible to participate in any pension fund or retirement system established under Articles 2 through 18 of this Code. Contributions to the plan shall be made by the unit of local government only from general purpose funds not derived from real property taxes imposed by the unit, at a rate to be determined from time to time by the unit of local government. However, the rate of employer contribution shall be (i) the same for all employees participating in the plan, and (ii) not more than 10% of the employee's salary.

Any benefits accruing to the participants in a retirement plan established under this subsection shall be protected from impairment in accordance with Article XIII, Section 5 of the Illinois Constitution. However, the unit of local government establishing such a plan may terminate it at any time, unless it has otherwise contractually agreed with its participating employees.

(c) The agency or department designated by the unit of local government or school district to establish and administer a plan or program authorized under subsection (a) or (b) of this Section may invest the assets of the plan in investments deemed appropriate by the agency or department, including but not limited to life insurance or annuity contracts, and share or share certificate accounts of State or federal credit unions, the accounts of which are insured as required by the Illinois Credit Union Act or the Federal Credit Union Act, whichever is applicable. The payment of employer contributions to a retirement plan established under subsection (b), and investment and payment to a participant of deferred compensation and income or gain thereon, if any, shall not be construed to be prohibited uses of the general assets of the unit of local government or school district.

This Section does not limit the power or authority of any unit of local government, school district or any institution supported in whole or in part by public funds to establish and administer any other deferred compensation plans that may be authorized by law and deemed appropriate by the officials of such subdivisions or institutions.

(Source: P.A. 87-794.)

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