102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3463

 

Introduced 1/18/2022, by Sen. Robert F. Martwick

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/16-204

    Amends the Downstate Teacher Article of the Illinois Pension Code. Provides that beginning July 1, 2023, the System shall have the authority to enroll in the defined contribution benefit all employees who first became active members of the System before January 1, 2022 in accordance with specified automatic enrollment provisions. Provides that the System shall enroll all such employees as soon as practicable, but no later than January 1, 2025. Provides that the System: shall protect employers from liability and expenses arising out of investment loss claims by participants, except to the extent the claims are the fault of the employer; shall determine and resolve contribution limitations that arise out of a participant's participation in both the System's defined contribution benefit and an employer-offered plan; shall compensate employers for their administrative costs on a per participant basis at a rate reasonably determined by the System; and shall not require an employer to undertake any task or assume any responsibility that creates a fiduciary duty on the part of the employer to a participant. Effective immediately.


LRB102 25276 RPS 34549 b

 

 

A BILL FOR

 

SB3463LRB102 25276 RPS 34549 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by
5changing Section 16-204 as follows:
 
6    (40 ILCS 5/16-204)
7    Sec. 16-204. Optional defined contribution benefit. As
8soon as practicable after the effective date of this
9amendatory Act of the 100th General Assembly, the System shall
10offer a defined contribution benefit to active members of the
11System. The defined contribution benefit shall be an optional
12benefit to any member who chooses to participate. The defined
13contribution benefit shall collect optional employee and
14optional employer contributions into an account and shall
15offer investment options to the participant. The benefit under
16this Section shall be operated in full compliance with any
17applicable State and federal laws, and the System shall
18utilize generally accepted practices in creating and
19maintaining the benefit for the best interest of the
20participants. The System may use funds from the employee and
21employer contributions to defray any and all costs of creating
22and maintaining the benefit. In addition, the System may use
23funds provided under Section 16-158 of this Code to defray any

 

 

SB3463- 2 -LRB102 25276 RPS 34549 b

1and all costs of creating and maintaining the benefit and then
2shall reimburse those costs from funds received from the
3employee and employer contributions under this Section. All
4employers must comply with the reporting and administrative
5functions established by the System and are required to
6implement the benefits established under this Section. The
7System: (1) shall protect employers from liability and
8expenses arising out of investment loss claims by
9participants, except to the extent the claims are the fault of
10the employer; (2) shall determine and resolve contribution
11limitations that arise out of a participant's participation in
12both the System's defined contribution benefit and an
13employer-offered plan; (3) shall compensate employers for
14their administrative costs on a per participant basis at a
15rate reasonably determined by the System; and (4) shall not
16require an employer to undertake any task or assume any
17responsibility that creates a fiduciary duty on the part of
18the employer to a participant. The System shall produce an
19annual report on the participation in the benefit and shall
20make the report public.
21    As soon as is practicable on or after January 1, 2022, the
22System shall automatically enroll any employee who first
23becomes an active member or participant in the System. A
24member automatically enrolled under this Section shall have 3%
25of his or her pre-tax gross compensation for each compensation
26period deferred into his or her deferred compensation account,

 

 

SB3463- 3 -LRB102 25276 RPS 34549 b

1unless the member otherwise instructs the System on forms
2approved by the System. A member may elect, in a manner
3provided for by the System, to not participate in the defined
4contribution benefit or to increase or reduce the amount of
5pre-tax gross compensation contributed, consistent with State
6or federal law. A member shall be automatically enrolled in
7the benefit beginning the first day of the pay period
8following the member's 30th day of employment. A member who
9has been automatically enrolled in the benefit may elect,
10within 90 days of enrollment, to withdraw from the benefit and
11receive a refund of amounts deferred, plus or minus any
12applicable earnings, investment fees, and administrative fees.
13Any refunded amount shall be included in the member's gross
14income for the taxable year in which the refund is issued.
15    Beginning July 1, 2023, the System shall have the
16authority to enroll in the defined contribution benefit all
17employees who first became active members of the System before
18January 1, 2022 in accordance with the automatic enrollment
19provisions in this Section. The System shall enroll all such
20employees pursuant to the procedure established in this
21Section as soon as practicable, but no later than January 1,
222025.
23    On or after January 1, 2023, the System may elect to
24increase the automatic annual contributions under this
25Section. The increase in the rate of contribution, however,
26shall not exceed 2% of a member's pre-tax gross compensation

 

 

SB3463- 4 -LRB102 25276 RPS 34549 b

1per year, and at no time shall any total contribution exceed
2any contribution limits established by State or federal law.
3(Source: P.A. 102-540, eff. 8-20-21.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.