103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1644

 

Introduced 2/8/2023, by Sen. Robert F. Martwick

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/24-105.2
40 ILCS 5/24-105.3 new

    Amends the Deferred Compensation Article of the Illinois Pension Code. Provides that as soon as practicable, but no later than January 1, 2025, the Department of Central Management Services shall automatically enroll into the State Employees Deferred Compensation Plan all current State employees who are active members of a retirement system created under the General Assembly, State Employees, or Judges Article and who are not contributing to the Plan on the date of automatic enrollment. Provides that any agency with employees subject to automatic enrollment must systematically provide the employee data necessary for enrollment to the Department of Central Management Services or its designee. Provides that an employee who is automatically enrolled shall have 3% of his or her pretax gross compensation, or any other percentage determined by the Illinois State Board of Investment, for each compensation period deferred into his or her deferred compensation account. Provides that the Illinois State Board of Investment may increase the default percentage amount of compensation deferred into employee accounts. Contains provisions concerning opting out of automatic enrollment; increasing or reducing contributions; and withdrawing from the Plan. Makes other changes. Effective July 1, 2023.


LRB103 27809 RPS 54187 b

 

 

A BILL FOR

 

SB1644LRB103 27809 RPS 54187 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 24-105.2 and adding Section 24-105.3 as
6follows:
 
7    (40 ILCS 5/24-105.2)
8    Sec. 24-105.2. Automatic enrollment for certain employees.
9    The Department of Central Management Services shall
10automatically enroll in the State Employees Deferred
11Compensation Plan any employee who, on or after July 1, 2020,
12becomes an active member or participant of a retirement system
13created under Article 2, 14, or 18. Any agency with employees
14subject to automatic enrollment must systematically provide
15the employee data necessary for enrollment to the Department
16of Central Management Services or its designee. An employee
17automatically enrolled under this Section shall have 3% of his
18or her pre-tax gross compensation for each compensation period
19deferred into his or her deferred compensation account. The
20Board may increase the default percentage amount of
21compensation deferred into employee accounts.
22    An employee shall have 30 days from the start date of
23employment to elect to not participate in the deferred

 

 

SB1644- 2 -LRB103 27809 RPS 54187 b

1compensation plan or to elect to increase or reduce the amount
2of pre-tax gross compensation deferred. An employee shall be
3automatically enrolled in the Plan beginning the first day of
4the pay period following the employee's thirtieth day of
5employment. An employee who has been automatically enrolled in
6the Plan may elect, within 90 days of enrollment, to withdraw
7from the Plan and receive a refund of amounts deferred, plus or
8minus any applicable earnings, investment fees, and
9administrative fees. An employee making such an election shall
10forfeit all employer matching contributions, if any, made
11prior to the election. Any refunded amount shall be included
12in the employee's gross income for the taxable year in which
13the refund is issued.
14    As soon as practicable, the Board shall establish a plan
15for annual, automatic increases to employee contribution rates
16for employees who are automatically enrolled in the Plan
17pursuant to this Section. The amount of automatic annual
18increases in any 12-month period shall not exceed 1% of
19compensation. Employees may elect to not receive automatic
20annual increases in a manner described by the Board.
21(Source: P.A. 101-277, eff. 1-1-20; 102-219, eff. 7-30-21.)
 
22    (40 ILCS 5/24-105.3 new)
23    Sec. 24-105.3. One-time automatic enrollment for certain
24employees. As soon as practicable, but no later than January
251, 2025, the Department of Central Management Services shall

 

 

SB1644- 3 -LRB103 27809 RPS 54187 b

1automatically enroll into the State Employees Deferred
2Compensation Plan all current State employees who are active
3members of a retirement system created under Article 2, 14, or
418 and who are not contributing to the Plan on the date of
5automatic enrollment under this Section. Any agency with
6employees subject to automatic enrollment must systematically
7provide the employee data necessary for enrollment to the
8Department of Central Management Services or its designee. An
9employee automatically enrolled under this Section shall have
103%, or any other percentage determined by the Board pursuant
11to Section 24-105.2, of his or her pretax gross compensation
12for each compensation period deferred into his or her deferred
13compensation account.
14    An employee shall have a one-calendar-month opt-out period
15prior to being automatically enrolled in the Plan, during
16which the employee may elect to not participate in the Plan or
17elect to increase or reduce the amount of pretax gross
18compensation deferred. An employee who does not opt out during
19the one-calendar-month period shall be automatically enrolled
20in the Plan beginning the first day of the pay period of the
21month following the end of the opt-out period. An employee who
22has been automatically enrolled in the Plan may elect, within
2390 days after enrollment, to withdraw from the Plan and
24receive a refund of the amounts deferred, plus or minus any
25applicable earnings, investment fees, and administrative fees.
26An employee making such an election shall forfeit all employer

 

 

SB1644- 4 -LRB103 27809 RPS 54187 b

1matching contributions, if any, made prior to the election.
2Any refunded amount shall be included in the employee's gross
3income for the taxable year in which the refund is issued.
4    Beginning one year after the date of automatic enrollment
5under this Section, or as soon as practicable thereafter, the
6Board shall establish a plan for automatic increases to
7employee contribution rates for employees who are
8automatically enrolled in the Plan pursuant to this Section.
9The amount of automatic increases in any 12-month period shall
10not exceed 1% of compensation. Employees may elect to not
11receive automatic increases in a manner described by the
12Board.
 
13    Section 99. Effective date. This Act takes effect July 1,
142023.