Illinois General Assembly - Full Text of SB2016

LRB104 09468 LNS 19529 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB2016

Introduced 2/6/2025, by Sen. Karina Villa

SYNOPSIS AS INTRODUCED:

105 ILCS 5/22-101 new

Amends the School Code. Provides that, by July 1, 2027, the school board of each school district in the State that offers its employees a retirement savings plan established under Section 403(b) of the Internal Revenue Code of 1986 may enter into a contract with one or more vendors to provide participants with plan investments options. Provides that a vendor selected under after the effective date of the Act must be mutually agreed upon by the affected collective bargaining unit or units and the school board must ensure that the vendor follows the specified investment guidelines. Permits a specified vendor offering a plan to charge an investment advisory representative fee not to exceed 0.50% annually. Provides that, if a new vendor is chosen to administer a retirement saving plan that is offered by the specified school board of a school district, an employee of the school district may opt out of having the employee's individual 403(b) assets transferred to that new vendor. Limits applicability of the provisions to contracts entered into, extended, or renewed on or after the effective date of the Act.

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The School Code is amended by adding Sections 22-101 and 22-102 as follows:

(105 ILCS 5/22-101 new)

Sec. 22-101. Retirement savings plans; requirements.

(a) This Section applies to contracts entered into, extended, or renewed on or after the effective date of this amendatory Act of the 104th General Assembly.

(b) By July 1, 2027, the school board of each school district in the State that offers its employees a retirement savings plan established under Section 403(b) of the Internal Revenue Code of 1986 may enter into a contract with one or more vendors to provide participants with plan investments options.

A vendor selected under this Section after the effective date of this amendatory Act of the 104th General Assembly must be mutually agreed upon by the affected collective bargaining unit or units and the school board and must ensure that:

(1) neither it nor the plan investment options it provides impose an administrative asset-based fee in excess of 0.50%;

(2) neither it nor the plan investment options it provides impose front-end sales or advisory charges;

(3) neither it nor the plan investment options it provides impose surrender charges;

(4) the provided plan investment options offer access to all of the following types of funds:

(A) a target-date index fund with an expense ratio that is less than or equal to 0.25%;

(B) a broad-based domestic index fund with an expense ratio that is less than or equal to 0.10%;

(C) a broad-based bond index fund with an expense ratio that is less than or equal to 0.10%; and

(D) an international index fund with an expense ratio that is less than or equal to 0.10%.

(c) A vendor offering a plan under this Section may charge an investment advisory representative fee not to exceed 0.50% annually.

(d) If a new vendor is chosen to administer a retirement saving plan that is offered by the school board of a school district under this Section, an employee of the school district may opt out of having the employee's individual 403(b) assets transferred to that new vendor.