102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4622

 

Introduced 1/21/2022, by Rep. Michael Halpin

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/22B-120

    Amends the Police Officers' Pension Investment Fund Article of the Illinois Pension Code. Provides that the transition period shall end no later than June 30, 2023 (instead of 30 months after January 1, 2020). Effective immediately.


LRB102 22290 RPS 31423 b

 

 

A BILL FOR

 

HB4622LRB102 22290 RPS 31423 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 22B-120 as follows:
 
6    (40 ILCS 5/22B-120)
7    Sec. 22B-120. Transition period; transfer of securities,
8assets, and investment functions.
9    (a) The transition period shall commence on January 1,
102020 (the effective date of Public Act 101-610) this
11amendatory Act of the 101st General Assembly and shall end as
12determined by the board, consistent with and in the
13application of its fiduciary responsibilities, but in no event
14later than June 30, 2023 30 months thereafter.
15    (b) The board may retain the services of custodians,
16investment consultants, and other professional services it
17deems prudent to implement the transition of assets described
18in this Section. The permanent board of trustees shall not be
19bound by any contract or agreement regarding such custodians,
20investment consultants, or other professional services entered
21into by the transition board of trustees.
22    (c) As soon as practicable after January 1, 2020 (the
23effective date of Public Act 101-610) this amendatory Act of

 

 

HB4622- 2 -LRB102 22290 RPS 31423 b

1the 101st General Assembly, the board, in cooperation with the
2Department of Insurance, shall audit the investment assets of
3each transferor pension fund to determine a certified
4investment asset list for each transferor pension fund. The
5audit shall be performed by a certified public accountant
6engaged by the board, and the board shall be responsible for
7payment of the costs and expenses associated with the audit.
8Upon completion of the audit for any transferor pension fund,
9the board and the Department of Insurance shall provide the
10certified investment asset list to that transferor pension
11fund. Upon determination of the certified investment asset
12list for any transferor pension fund, the board shall, within
1310 business days or as soon thereafter as may be practicable as
14determined by the board, initiate the transfer of assets from
15that transferor pension fund. Further and to maintain accuracy
16of the certified investment asset list, upon determination of
17the certified investment asset list for a transferor pension
18fund, that fund shall not purchase or sell any of its pension
19fund assets.
20    (d) When the Fund is prepared to receive pension fund
21assets from any transferor pension fund, the executive
22director shall notify in writing the board of trustees of that
23transferor pension fund of the Fund's intent to assume
24fiduciary control of those pension fund assets, and the date
25at which it will assume such control and that the transferor
26pension fund will cease to exercise fiduciary responsibility.

 

 

HB4622- 3 -LRB102 22290 RPS 31423 b

1This letter shall be transmitted no less than 30 days prior to
2the transfer date. A copy of the letter shall be transmitted to
3the Department of Insurance. Upon receipt of the letter, the
4transferor pension fund shall promptly notify its custodian,
5as well as any and all entities with fiduciary control of any
6portion of the pension assets. Each transferor pension fund
7shall have sole fiduciary and statutory responsibility for the
8management of its pension assets until the start of business
9on the transfer date. At the start of business on the transfer
10date, statutory and fiduciary responsibility for the
11investment of pension fund assets shall shift exclusively to
12the Fund and the Fund shall promptly and prudently transfer
13all such pension fund assets to the board and terminate the
14relationship with the local custodian of that transferor
15pension fund. The Fund shall provide a receipt for the
16transfer to the transferor pension fund within 30 days of the
17transfer date.
18    As used in this subsection, "transfer date" means the date
19at which the Fund will assume fiduciary control of the
20transferor pension fund's assets and the transferor pension
21fund will cease to exercise fiduciary responsibility.
22    (e) Within 90 days after the end of the transition period
23or as soon thereafter as may be practicable as determined by
24the board, the Fund and the Department of Insurance shall
25cooperate in transferring to the Fund all pension fund assets
26remaining in the custody of the transferor pension funds.

 

 

HB4622- 4 -LRB102 22290 RPS 31423 b

1    (f) The board shall adopt such rules as in its judgment are
2desirable to implement the transition process, including,
3without limitation, the transfer of the pension fund assets of
4the transferor pension funds, the assumption of fiduciary
5control of such assets by the Fund, and the termination of
6relationships with local custodians. The adoption and
7effectiveness of such rules and regulations shall not be
8subject to Article 5 of the Illinois Administrative Procedure
9Act.
10    (g) Within 6 months after the end of the transition period
11or as soon thereafter as may be practicable as determined by
12the board, the books, records, accounts, and securities of the
13Fund shall be audited by a certified public accountant
14selected by the board. This audit shall include, but not be
15limited to, the following: (1) a full description of the
16investments acquired, showing average costs; (2) a full
17description of the securities sold or exchanged, showing
18average proceeds or other conditions of an exchange; (3) gains
19or losses realized during the period; (4) income from
20investments; and (5) administrative expenses incurred by the
21board. This audit report shall be published on the Fund's
22official website and filed with the Department of Insurance.
23    (h) To provide funds for payment of the ordinary and
24regular costs associated with the implementation of this
25transition process, the Illinois Finance Authority is
26authorized to loan to the Fund up to $7,500,000 of any of the

 

 

HB4622- 5 -LRB102 22290 RPS 31423 b

1Authority's funds, including, but not limited to, funds in its
2Illinois Housing Partnership Program Fund, its Industrial
3Project Insurance Fund, or its Illinois Venture Investment
4Fund, for such purpose. Such loan shall be repaid by the Fund
5with an interest rate tied to the Federal Funds Rate or an
6equivalent market established variable rate. The Fund and the
7Illinois Finance Authority shall enter into a loan or similar
8agreement that specifies the period of the loan, the payment
9interval, procedures for making periodic loans, the variable
10rate methodology to which the interest rate for loans should
11be tied, the funds of the Illinois Finance Authority that will
12be used to provide the loan, and such other terms that the Fund
13and the Illinois Finance Authority reasonably believe to be
14mutually beneficial. Such agreement shall be a public record
15and the Fund shall post the terms of the agreement on its
16official website.
17(Source: P.A. 101-610, eff. 1-1-20.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.