State of Illinois
91st General Assembly
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91_SB1103eng

 
SB1103 Engrossed                               LRB9102714EGfg

 1        AN  ACT  to  amend  the Illinois Pension Code by changing
 2    Section 1-113.5.

 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 1-113.5 as follows:

 7        (40 ILCS 5/1-113.5)
 8        Sec.  1-113.5.   Investment   advisers   and   investment
 9    services.
10        (a)  The  board of trustees of a pension fund may appoint
11    investment advisers as defined in Section 1-101.4.  The board
12    of any pension fund investing in common  or  preferred  stock
13    under  Section  1-113.4  shall  appoint an investment adviser
14    before making such investments.
15        The investment adviser shall be a fiduciary,  as  defined
16    in  Section  1-101.2,  with  respect  to the pension fund and
17    shall be one of the following:
18             (1)  an  investment  adviser  registered  under  the
19        federal Investment Advisers Act of  1940  who  meets  any
20        applicable requirements of the Illinois Securities Law of
21        1953  or  is registered under and the Illinois Securities
22        Law of 1953;
23             (2)  a bank or trust company authorized to conduct a
24        trust business in Illinois;
25             (3)  a life insurance company authorized to transact
26        business in Illinois; or
27             (4)  an investment company as defined and registered
28        under the federal Investment  Company  Act  of  1940  and
29        registered under the Illinois Securities Law of 1953.
30        (b)  All  investment  advice  and services provided by an
31    investment adviser appointed  under  this  Section  shall  be
 
SB1103 Engrossed            -2-                LRB9102714EGfg
 1    rendered   pursuant   to   a  written  contract  between  the
 2    investment adviser and the board, and in accordance with  the
 3    board's investment policy.
 4        The contract shall include all of the following:
 5             (1)  acknowledgement  in  writing  by the investment
 6        adviser that he or she is a fiduciary with respect to the
 7        pension fund;
 8             (2)  the board's investment policy;
 9             (3)  full disclosure of direct  and  indirect  fees,
10        commissions,  penalties,  and any other compensation that
11        may be received  by  the  investment  adviser,  including
12        reimbursement for expenses; and
13             (4)  a   requirement  that  the  investment  adviser
14        submit periodic written reports, on at least a  quarterly
15        basis,  for the board's review at its regularly scheduled
16        meetings.  All returns on investment shall be reported as
17        net returns after payment of all fees,  commissions,  and
18        any other compensation.
19        (c)  Within   30  days  after  appointing  an  investment
20    adviser, the board shall submit a copy of the contract to the
21    Department of Insurance.
22        (d)  Investment services provided by a person other  than
23    an investment adviser appointed under this Section, including
24    but  not limited to services provided by the kinds of persons
25    listed in items (1) through (4) of subsection (a),  shall  be
26    rendered  only  after  full  written disclosure of direct and
27    indirect  fees,  commissions,  penalties,   and   any   other
28    compensation  that  shall  or  may  be received by the person
29    rendering those services.
30        (e)  The board of trustees of  each  pension  fund  shall
31    retain  records of investment transactions in accordance with
32    the rules of the Department of Insurance.
33    (Source: P.A. 90-507, eff. 8-22-97.)
 
SB1103 Engrossed            -3-                LRB9102714EGfg
 1        Section 99. Effective date.  This Act takes  effect  upon
 2    becoming law.

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