HB5495 EngrossedLRB097 18371 KMW 63597 b


  
1    AN ACT concerning local government.
  
 
2    Be it enacted by the People of the State of Illinois,
 
3represented in the General Assembly:
  


 
 
4    Section 5. The State Mandates Act is amended by adding 
5Section 8.36 as follows:
 
6    (30 ILCS 805/8.36 new)
7    Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8 
8of this Act, no reimbursement by the State is required for the 
9implementation of any mandate created by this amendatory Act of 
10the 97th General Assembly. Nothing in this amendatory Act of 
11the 97th General Assembly shall override the process 
12established under Section 22-60 of the School Code.
 
13    Section 10. The Counties Code is amended  by adding the 
14heading of Div. 6-35 and Section 6-35000 as follows:
 
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  

 
18    (55 ILCS 5/6-35000 new)
19    Sec. 6-35000. Application of the prudent investor rule to 
20457(b) plans. 
 
 
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1    (a) Beginning January 1, 2015, if a county offers a 457(b) 
2plan to its officers, employees, or both, or makes 
3contributions to such a plan on behalf of its officers, 
4employees, or both, then the plan sponsor must  act   in 
5accordance with the prudent investor rule when  making 
6plan-related decisions.
7    (b) For the purposes of this Section, a plan sponsor acts 
8in accordance with the prudent investor rule if he or she acts 
9in good faith and with the care, skill, prudence, diligence, 
10and degree of judgment that an  investor of prudence, 
11discretion, and good judgment would exercise in the management 
12of his or her own affairs, taking into account all aspects of 
13plan design, including, but not limited to, total delivered 
14fees and surrender charges.  The intent of this legislation is 
15for the plan sponsor to consolidate to a single provider.
16    (c) A home rule unit may not regulate a county board's or 
17its agents' plan-related fiduciary obligations in a manner that 
18is less restrictive than the regulation by the State of those 
19obligations under subsection (a). This subsection (c)  is a 
20limitation under subsection (i) of Section 6 of Article VII of 
21the Illinois Constitution on the concurrent exercise by home 
22rule units of powers and functions exercised by the State. 
23    (d) This Section does not apply to any plan authorized or 
24created  under the Illinois Pension Code. 
 
25    Section 15. The Illinois Municipal Code is amended  by 
 
 
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1adding Section 8-1-20 as follows:
 
2    (65 ILCS 5/8-1-20 new)
3    Sec. 8-1-20. Application of the prudent investor rule to 
4457(b) plans. 
5    (a) Beginning January 1, 2015, if a municipality offers a 
6457(b) plan to its officers, employees, or both, or makes 
7contributions to such a plan on behalf of its officers, 
8employees, or both, then the plan sponsor must  act   in 
9accordance with the prudent investor rule when  making 
10plan-related decisions.
11    (b) For the purposes of this Section, a plan sponsor acts 
12in accordance with the prudent investor rule if he or she acts 
13in good faith and with the care, skill, prudence, diligence, 
14and degree of judgment that an  investor of prudence, 
15discretion, and sound judgment would exercise in the management 
16of his or her own affairs, taking into account all aspects of 
17plan design, including, but not limited to, total delivered 
18fees and surrender charges.  The intent of this legislation is 
19for the plan sponsor to consolidate to a single provider.
20    (c) A home rule unit may not regulate a municipal corporate 
21authority's  or its agents' plan-related fiduciary obligations 
22in a manner that is less restrictive than the regulation by the 
23State of those obligations under subsection (a). This 
24subsection (c)  is a limitation under subsection (i) of Section 
256 of Article VII of the Illinois Constitution on the concurrent 
 
 
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1exercise by home rule units of powers and functions exercised 
2by the State. 
3    (d) This Section does not apply to any plan authorized or 
4created  under the Illinois Pension Code. 
 
5    Section 20. The School Code is amended by adding Section 
610-20.55 as follows:
 
7    (105 ILCS 5/10-20.55 new)
8    Sec. 10-20.55. Application of the prudent investor rule to  
9403(b) and 457(b) plans.
10    (a) Beginning January 1, 2015, if a school  board other than 
11the Chicago Board of Schools offers a 403(b) or 457(b) plan to 
12its officers, employees, or both, or makes contributions to 
13such a plan on behalf of its officers, employees, or both, then 
14the plan sponsor must   act   in accordance with the prudent 
15investor rule when  making plan-related decisions.
16    (b) For the purposes of this Section, a plan sponsor acts 
17in accordance with the prudent investor rule if he or she acts 
18in good faith and with the care, skill, prudence, diligence, 
19and degree of judgment that an  investor of prudence, 
20discretion, and sound judgment would exercise in the management 
21of his or her own affairs, taking into account all aspects of 
22plan design, including, but not limited to, total delivered 
23fees, surrender charges, and third-party administrator fees.  
24The intent of this legislation is for the plan sponsor to 
 
 
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1consolidate to a single provider.
2    (c) The plan sponsor may comply with the requirements of 
3this Section by joining a multiple employer plan that already 
4complies with the prudent investor rule. 
5    (d) This Section does not apply to any plan authorized or 
6created  under the Illinois Pension Code.