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| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5495 Introduced 2/15/2012, by Rep. Elaine Nekritz SYNOPSIS AS INTRODUCED:
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| 30 ILCS 805/8.36 new | | 55 ILCS 5/Div. 6-35 heading new | | 55 ILCS 5/6-35000 new | | 65 ILCS 5/8-1-20 new | | 105 ILCS 5/10-20.55 new | |
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Amends the State Mandates Act. Provides that nothing in the amendatory Act shall override the process established under the provision of the School Code concerning the prohibition against unfunded mandates. Amends the Counties Code and Illinois Municipal Code to provide that beginning January 1, 2015, if a county or municipality offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then that county or municipality, and the persons acting under its authority, must act in accordance with the prudent investor rule when making plan-related decisions. Limits the concurrent exercise of home rule powers. Amends the School Code to provide that beginning January 1, 2015, if a school board other than the Chicago Board of Education offers a 403(b) or 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then that school board, and the persons acting under its authority, must act in accordance with the prudent investor rule when making plan-related decisions.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning local government.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 5. The State Mandates Act is amended by adding |
| 5 | | Section 8.36 as follows:
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| 6 | | (30 ILCS 805/8.36 new) |
| 7 | | Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8 |
| 8 | | of this Act, no reimbursement by the State is required for the |
| 9 | | implementation of any mandate created by this amendatory Act of |
| 10 | | the 97th General Assembly. Nothing in this amendatory Act of |
| 11 | | the 97th General Assembly shall override the process |
| 12 | | established under Section 22-60 of the School Code.
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| 13 | | Section 10. The Counties Code is amended by adding the |
| 14 | | heading of Div. 6-35 and Section 6-35000 as follows:
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| 15 | | (55 ILCS 5/Div. 6-35 heading new) |
| 16 | | Division 6-35. Application of the Prudent Investor Rule |
| 17 | | to Eligible Deferred Compensation Plans
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| 18 | | (55 ILCS 5/6-35000 new) |
| 19 | | Sec. 6-35000. Application of the prudent investor rule to |
| 20 | | 457(b) plans. |
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| 1 | | (a) Beginning January 1, 2015, if a county offers a 457(b) |
| 2 | | plan to its officers, employees, or both, or makes |
| 3 | | contributions to such a plan on behalf of its officers, |
| 4 | | employees, or both, then the plan sponsor must act in |
| 5 | | accordance with the prudent investor rule when making |
| 6 | | plan-related decisions. |
| 7 | | (b) For the purposes of this Section, a plan sponsor acts |
| 8 | | in accordance with the prudent investor rule if he or she acts |
| 9 | | in good faith and with the care, skill, prudence, diligence, |
| 10 | | and degree of judgment that an investor of prudence, |
| 11 | | discretion, and good judgment would exercise in the management |
| 12 | | of his or her own affairs, taking into account all aspects of |
| 13 | | plan design, including, but not limited to, total delivered |
| 14 | | fees and surrender charges. The intent of this legislation is |
| 15 | | for the plan sponsor to consolidate to a single provider. |
| 16 | | (c) A home rule unit may not regulate a county board's or |
| 17 | | its agents' plan-related fiduciary obligations in a manner that |
| 18 | | is less restrictive than the regulation by the State of those |
| 19 | | obligations under subsection (a). This subsection (c) is a |
| 20 | | limitation under subsection (i) of Section 6 of Article VII of |
| 21 | | the Illinois Constitution on the concurrent exercise by home |
| 22 | | rule units of powers and functions exercised by the State. |
| 23 | | (d) This Section does not apply to any plan authorized or |
| 24 | | created under the Illinois Pension Code.
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| 25 | | Section 15. The Illinois Municipal Code is amended by |
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| 1 | | adding Section 8-1-20 as follows:
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| 2 | | (65 ILCS 5/8-1-20 new) |
| 3 | | Sec. 8-1-20. Application of the prudent investor rule to |
| 4 | | 457(b) plans. |
| 5 | | (a) Beginning January 1, 2015, if a municipality offers a |
| 6 | | 457(b) plan to its officers, employees, or both, or makes |
| 7 | | contributions to such a plan on behalf of its officers, |
| 8 | | employees, or both, then the plan sponsor must act in |
| 9 | | accordance with the prudent investor rule when making |
| 10 | | plan-related decisions. |
| 11 | | (b) For the purposes of this Section, a plan sponsor acts |
| 12 | | in accordance with the prudent investor rule if he or she acts |
| 13 | | in good faith and with the care, skill, prudence, diligence, |
| 14 | | and degree of judgment that an investor of prudence, |
| 15 | | discretion, and sound judgment would exercise in the management |
| 16 | | of his or her own affairs, taking into account all aspects of |
| 17 | | plan design, including, but not limited to, total delivered |
| 18 | | fees and surrender charges. The intent of this legislation is |
| 19 | | for the plan sponsor to consolidate to a single provider. |
| 20 | | (c) A home rule unit may not regulate a municipal corporate |
| 21 | | authority's or its agents' plan-related fiduciary obligations |
| 22 | | in a manner that is less restrictive than the regulation by the |
| 23 | | State of those obligations under subsection (a). This |
| 24 | | subsection (c) is a limitation under subsection (i) of Section |
| 25 | | 6 of Article VII of the Illinois Constitution on the concurrent |
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| 1 | | exercise by home rule units of powers and functions exercised |
| 2 | | by the State. |
| 3 | | (d) This Section does not apply to any plan authorized or |
| 4 | | created under the Illinois Pension Code.
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| 5 | | Section 20. The School Code is amended by adding Section |
| 6 | | 10-20.55 as follows:
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| 7 | | (105 ILCS 5/10-20.55 new) |
| 8 | | Sec. 10-20.55. Application of the prudent investor rule to |
| 9 | | 403(b) and 457(b) plans. |
| 10 | | (a) Beginning January 1, 2015, if a school board other than |
| 11 | | the Chicago Board of Schools offers a 403(b) or 457(b) plan to |
| 12 | | its officers, employees, or both, or makes contributions to |
| 13 | | such a plan on behalf of its officers, employees, or both, then |
| 14 | | the plan sponsor must act in accordance with the prudent |
| 15 | | investor rule when making plan-related decisions. |
| 16 | | (b) For the purposes of this Section, a plan sponsor acts |
| 17 | | in accordance with the prudent investor rule if he or she acts |
| 18 | | in good faith and with the care, skill, prudence, diligence, |
| 19 | | and degree of judgment that an investor of prudence, |
| 20 | | discretion, and sound judgment would exercise in the management |
| 21 | | of his or her own affairs, taking into account all aspects of |
| 22 | | plan design, including, but not limited to, total delivered |
| 23 | | fees, surrender charges, and third-party administrator fees. |
| 24 | | The intent of this legislation is for the plan sponsor to |