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Public Act 100-0006


 

Public Act 0006 100TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 100-0006
 
HB2360 EnrolledLRB100 09674 JLS 19843 b

    AN ACT concerning employment.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Secure Choice Savings Program Act
is amended by changing Sections 15, 30, 55, and 60 as follows:
 
    (820 ILCS 80/15)
    Sec. 15. Illinois Secure Choice Savings Program Fund.
    (a) The Illinois Secure Choice Savings Program Fund is
hereby established as a trust outside of the State treasury,
with the Board created in Section 20 as its trustee. The Fund
shall include the individual retirement accounts of enrollees,
which shall be accounted for as individual accounts. Moneys in
the Fund shall consist of moneys received from enrollees and
participating employers pursuant to automatic payroll
deductions and contributions to savings made under this Act.
The Fund shall be operated in a manner determined by the Board,
provided that the Fund is operated so that the accounts of
enrollees established under the Program meet the requirements
for IRAs under the Internal Revenue Code.
    (b) The amounts deposited in the Fund shall not constitute
property of the State and the Fund shall not be construed to be
a department, institution, or agency of the State. Amounts on
deposit in the Fund shall not be commingled with State funds
and the State shall have no claim to or against, or interest
in, such funds.
    (c) The Illinois Secure Choice Savings Program Fund is an
instrumentality of the State, and as such, is exempt from
Sections 2a, 5, 6 and 7 of the Illinois Securities Law of 1953.
(Source: P.A. 98-1150, eff. 6-1-15.)
 
    (820 ILCS 80/30)
    Sec. 30. Duties of the Board. In addition to the other
duties and responsibilities stated in this Act, the Board
shall:
    (a) Cause the Program to be designed, established and
operated in a manner that:
        (1) accords with best practices for retirement savings
    vehicles;
        (2) maximizes participation, savings, and sound
    investment practices;
        (3) maximizes simplicity, including ease of
    administration for participating employers and enrollees;
        (4) provides an efficient product to enrollees by
    pooling investment funds;
        (5) ensures the portability of benefits; and
        (6) provides for the deaccumulation of enrollee assets
    in a manner that maximizes financial security in
    retirement.
    (b) Appoint a trustee to the IRA Fund in compliance with
Section 408 of the Internal Revenue Code.
    (c) Explore and establish investment options, subject to
Section 45 of this Act, that offer employees returns on
contributions and the conversion of individual retirement
savings account balances to secure retirement income without
incurring debt or liabilities to the State.
    (d) Establish the process by which interest, investment
earnings, and investment losses are allocated to individual
program accounts on a pro rata basis and are computed at the
interest rate on the balance of an individual's account.
    (e) Make and enter into contracts necessary for the
administration of the Program and Fund, including, but not
limited to, retaining and contracting with investment
managers, private financial institutions, other financial and
service providers, consultants, actuaries, counsel, auditors,
third-party administrators, and other professionals as
necessary.
    (e-5) Conduct a review of the performance of any investment
vendors every 4 years, including, but not limited to, a review
of returns, fees, and customer service. A copy of reviews
conducted under this subsection (e-5) shall be posted to the
Board's Internet website.
    (f) Determine the number and duties of staff members needed
to administer the Program and assemble such a staff, including,
as needed, employing staff, appointing a Program
administrator, and entering into contracts with the State
Treasurer to make employees of the State Treasurer's Office
available to administer the Program.
    (g) Cause moneys in the Fund to be held and invested as
pooled investments described in Section 45 of this Act, with a
view to achieving cost savings through efficiencies and
economies of scale.
    (h) Evaluate and establish the process by which an enrollee
is able to contribute a portion of his or her wages to the
Program for automatic deposit of those contributions and the
process by which the participating employer provides a payroll
deposit retirement savings arrangement to forward those
contributions and related information to the Program,
including, but not limited to, contracting with financial
service companies and third-party administrators with the
capability to receive and process employee information and
contributions for payroll deposit retirement savings
arrangements or similar arrangements.
    (i) Design and establish the process for enrollment under
Section 60 of this Act, including the process by which an
employee can opt not to participate in the Program, select a
contribution level, select an investment option, and terminate
participation in the Program.
    (j) Evaluate and establish the process by which an
individual may voluntarily enroll in and make contributions to
the Program.
    (k) Accept any grants, appropriations, or other moneys from
the State, any unit of federal, State, or local government, or
any other person, firm, partnership, or corporation solely for
deposit into the Fund, whether for investment or administrative
purposes.
    (l) Evaluate the need for, and procure as needed, insurance
against any and all loss in connection with the property,
assets, or activities of the Program, and indemnify as needed
each member of the Board from personal loss or liability
resulting from a member's action or inaction as a member of the
Board.
    (m) Make provisions for the payment of administrative costs
and expenses for the creation, management, and operation of the
Program, including the costs associated with subsection (b) of
Section 20 of this Act, subsections (e), (f), (h), and (l) of
this Section, subsection (b) of Section 45 of this Act,
subsection (a) of Section 80 of this Act, and subsection (n) of
Section 85 of this Act. Subject to appropriation, the State may
pay administrative costs associated with the creation and
management of the Program until sufficient assets are available
in the Fund for that purpose. Thereafter, all administrative
costs of the Fund, including repayment of any start-up funds
provided by the State, shall be paid only out of moneys on
deposit therein. However, private funds or federal funding
received under subsection (k) of Section 30 of this Act in
order to implement the Program until the Fund is
self-sustaining shall not be repaid unless those funds were
offered contingent upon the promise of such repayment. The
Board shall keep total annual expenses as low as possible, but
in no event shall they exceed 0.75% of the total trust balance.
    (n) Allocate administrative fees to individual retirement
accounts in the Program on a pro rata basis.
    (o) Set minimum and maximum contribution levels in
accordance with limits established for IRAs by the Internal
Revenue Code.
    (o-5) Select a default contribution rate for Program
participants within the range of 3% to 6% of an enrollee's
wages.
    (p) Facilitate education and outreach to employers and
employees.
    (q) Facilitate compliance by the Program with all
applicable requirements for the Program under the Internal
Revenue Code, including tax qualification requirements or any
other applicable law and accounting requirements.
    (r) Carry out the duties and obligations of the Program in
an effective, efficient, and low-cost manner.
    (s) Exercise any and all other powers reasonably necessary
for the effectuation of the purposes, objectives, and
provisions of this Act pertaining to the Program.
    (t) Deposit into the Illinois Secure Choice Administrative
Fund all grants, gifts, donations, fees, and earnings from
investments from the Illinois Secure Choice Savings Program
Fund that are used to recover administrative costs. All
expenses of the Board shall be paid from the Illinois Secure
Choice Administrative Fund.
(Source: P.A. 98-1150, eff. 6-1-15; 99-571, eff. 7-15-16.)
 
    (820 ILCS 80/55)
    Sec. 55. Employer and employee information packets and
disclosure forms.
    (a) Prior to the opening of the Program for enrollment, the
Board shall design and disseminate to all employers an employer
information packet and an employee information packet, which
shall include background information on the Program,
appropriate disclosures for employees, and information
regarding the vendor Internet website described in subsection
(i) of Section 60 of this Act.
    (b) The Board shall provide for the contents of both the
employee information packet and the employer information
packet.
    (c) The employee information packet shall include a
disclosure form. The disclosure form shall explain, but not be
limited to, all of the following:
        (1) the benefits and risks associated with making
    contributions to the Program;
        (2) the mechanics of how to make contributions to the
    Program;
        (3) how to opt out of the Program;
        (4) how to participate in the Program with a level of
    employee contributions other than the default contribution
    rate 3%;
        (5) the process for withdrawal of retirement savings;
        (6) how to obtain additional information about the
    Program;
        (7) that employees seeking financial advice should
    contact financial advisors, that participating employers
    are not in a position to provide financial advice, and that
    participating employers are not liable for decisions
    employees make pursuant to this Act;
        (8) that the Program is not an employer-sponsored
    retirement plan; and
        (9) that the Program Fund is not guaranteed by the
    State.
    (d) The employee information packet shall also include a
form for an employee to note his or her decision to opt out of
participation in the Program or elect to participate with a
level of employee contributions other than the default
contribution rate 3%.
    (e) Participating employers shall supply the employee
information packet to employees upon launch of the Program.
Participating employers shall supply the employee information
packet to new employees at the time of hiring, and new
employees may opt out of participation in the Program or elect
to participate with a level of employee contributions other
than the default contribution rate 3% at that time.
(Source: P.A. 98-1150, eff. 6-1-15.)
 
    (820 ILCS 80/60)
    Sec. 60. Program implementation and enrollment. Except as
otherwise provided in Section 93 of this Act, the Program shall
be implemented, and enrollment of employees shall begin in
2018 , within 24 months after the effective date of this Act.
The Board shall establish an implementation timeline under
which employers shall enroll their employees into the Program.
The timeline shall include the date by which an employer must
begin enrollment of its employees into the Program and the date
by which enrollment must be complete. The Board shall adopt the
implementation timeline at a public meeting of the Board and
shall publicize the implementation timeline. The Board shall
provide advance notice to employers of their enrollment date
and the amount of time to complete enrollment. The Board's
implementation timeline shall ensure that all employees are
required to be enrolled into the Program by December 31, 2020.
The provisions of this Section shall be in force after the
Board opens the Program for enrollment.
    (a) Each employer shall establish a payroll deposit
retirement savings arrangement to allow each employee to
participate in the Program within the timeline set by at most
nine months after the Board after opens the Program opens for
enrollment.
    (b) Employers shall automatically enroll in the Program
each of their employees who has not opted out of participation
in the Program using the form described in subsection (c) of
Section 55 of this Act and shall provide payroll deduction
retirement savings arrangements for such employees and
deposit, on behalf of such employees, these funds into the
Program. Small employers may, but are not required to, provide
payroll deduction retirement savings arrangements for each
employee who elects to participate in the Program. Small
employers' use of automatic enrollment for employees is subject
to final rules from the United States Department of Labor.
Utilization of automatic enrollment by small employers may be
allowed only if it does not create employer liability under the
federal Employee Retirement Income Security Act.
    (c) Enrollees shall have the ability to select a
contribution level into the Fund. This level may be expressed
as a percentage of wages or as a dollar amount up to the
deductible amount for the enrollee's taxable year under Section
219(b)(1)(A) of the Internal Revenue Code. Enrollees may change
their contribution level at any time, subject to rules
promulgated by the Board. If an enrollee fails to select a
contribution level using the form described in subsection (c)
of Section 55 of this Act, then he or she shall contribute the
default contribution rate 3% of his or her wages to the
Program, provided that such contributions shall not cause the
enrollee's total contributions to IRAs for the year to exceed
the deductible amount for the enrollee's taxable year under
Section 219(b)(1)(A) of the Internal Revenue Code.
    (d) Enrollees may select an investment option from the
permitted investment options listed in Section 45 of this Act.
Enrollees may change their investment option at any time,
subject to rules promulgated by the Board. In the event that an
enrollee fails to select an investment option, that enrollee
shall be placed in the investment option selected by the Board
as the default under subsection (c) of Section 45 of this Act.
If the Board has not selected a default investment option under
subsection (c) of Section 45 of this Act, then an enrollee who
fails to select an investment option shall be placed in the
life-cycle fund investment option.
    (e) Following initial implementation of the Program
pursuant to this Section, at least once every year,
participating employers shall designate an open enrollment
period during which employees who previously opted out of the
Program may enroll in the Program.
    (f) An employee who opts out of the Program who
subsequently wants to participate through the participating
employer's payroll deposit retirement savings arrangement may
only enroll during the participating employer's designated
open enrollment period or if permitted by the participating
employer at an earlier time.
    (g) Employers shall retain the option at all times to set
up any type of employer-sponsored retirement plan, such as a
defined benefit plan or a 401(k), Simplified Employee Pension
(SEP) plan, or Savings Incentive Match Plan for Employees
(SIMPLE) plan, or to offer an automatic enrollment payroll
deduction IRA, instead of having a payroll deposit retirement
savings arrangement to allow employee participation in the
Program.
    (h) An employee may terminate his or her participation in
the Program at any time in a manner prescribed by the Board.
    (i) The Board shall establish and maintain an Internet
website designed to assist employers in identifying private
sector providers of retirement arrangements that can be set up
by the employer rather than allowing employee participation in
the Program under this Act; however, the Board shall only
establish and maintain an Internet website under this
subsection if there is sufficient interest in such an Internet
website by private sector providers and if the private sector
providers furnish the funding necessary to establish and
maintain the Internet website. The Board must provide public
notice of the availability of and the process for inclusion on
the Internet website before it becomes publicly available. This
Internet website must be available to the public before the
Board opens the Program for enrollment, and the Internet
website address must be included on any Internet website
posting or other materials regarding the Program offered to the
public by the Board.
(Source: P.A. 98-1150, eff. 6-1-15; 99-571, eff. 7-15-16.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 6/30/2017