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90_HB0660 40 ILCS 5/1-110 from Ch. 108 1/2, par. 1-110 Amends the General Provisions Article of the Pension Code. Prohibits investment in securities of companies that manufacture tobacco or tobacco products; does not require liquidation of current investments. Effective immediately. LRB9003554EGfg LRB9003554EGfg 1 AN ACT to amend the Illinois Pension Code by changing 2 Section 1-110. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Pension Code is amended by 6 changing Section 1-110 as follows: 7 (40 ILCS 5/1-110) (from Ch. 108 1/2, par. 1-110) 8 Sec. 1-110. Prohibited transactions. 9 (a) A fiduciary with respect to a retirement system or 10 pension fund shall not cause the retirement system or pension 11 fund to engage in a transaction if he or she knows or should 12 know that such transaction constitutes a direct or indirect: 13 (1) Sale or exchange, or leasing of any property 14 from the retirement system or pension fund to a party in 15 interest for less than adequate consideration, or from a 16 party in interest to a retirement system or pension fund 17 for more than adequate consideration. 18 (2) Lending of money or other extension of credit 19 from the retirement system or pension fund to a party in 20 interest without the receipt of adequate security and a 21 reasonable rate of interest, or from a party in interest 22 to a retirement system or pension fund with the provision 23 of excessive security or an unreasonably high rate of 24 interest. 25 (3) Furnishing of goods, services or facilities 26 from the retirement system or pension fund to a party in 27 interest for less than adequate consideration, or from a 28 party in interest to a retirement system or pension fund 29 for more than adequate consideration. 30 (4) Transfer to, or use by or for the benefit of, a 31 party in interest of any assets of a retirement system or -2- LRB9003554EGfg 1 pension fund for less than adequate consideration. 2 (b) A fiduciary with respect to a retirement system or 3 pension fund established under this Code shall not: 4 (1) deal with the assets of the retirement system 5 or pension fund in his own interest or for his own 6 account; 7 (2) in his individual or any other capacity act in 8 any transaction involving the retirement system or 9 pension fund on behalf of a party whose interests are 10 adverse to the interests of the retirement system or 11 pension fund or the interests of its participants or 12 beneficiaries;
or13 (3) receive any consideration for his own personal 14 account from any party dealing with the retirement system 15 or pension fund in connection with a transaction 16 involving the assets of the retirement system or pension 17 fund; or 18 (4) invest any assets of the retirement system or 19 pension fund in tobacco company securities after December 20 31, 1997. This item (4) does not require the liquidation 21 of any investment in existence on that date, but the 22 fiduciary is encouraged to review the advisability of 23 continuing any existing investment in tobacco company 24 securities in light of the public policy of this item (4) 25 discouraging such investments and to consider the 26 advantages of liquidating the investment at an 27 appropriate time. For the purposes of this item (4), 28 "tobacco company securities" means securities issued by a 29 company or other business entity that manufactures 30 tobacco or tobacco products for human use. 31 (c) Nothing in this Section shall be construed to 32 prohibit any trustee from: 33 (1) Receiving any benefit to which he may be 34 entitled as a participant or beneficiary in the -3- LRB9003554EGfg 1 retirement system or pension fund. 2 (2) Receiving any reimbursement of expenses 3 properly and actually incurred in the performance of his 4 duties with the retirement system or pension fund. 5 (3) Serving as a trustee in addition to being an 6 officer, employee, agent or other representative of a 7 party in interest. 8 (Source: P.A. 88-535.) 9 Section 99. Effective date. This Act takes effect upon 10 becoming law.
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