96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB6369

 

Introduced 2/18/2010, by Rep. Michael J. Madigan - Barbara Flynn Currie

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-110   from Ch. 108 1/2, par. 1-110

    Amends the Illinois Pension Code. Makes a technical change in a Section concerning prohibited transactions.


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PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Pension Code is amended by changing
5 Section 1-110 as follows:
 
6     (40 ILCS 5/1-110)  (from Ch. 108 1/2, par. 1-110)
7     Sec. 1-110. Prohibited Transactions.
8     (a) A fiduciary with respect to a retirement system,
9 pension fund, or investment board shall not cause the the
10 retirement system or pension fund to engage in a transaction if
11 he or she knows or should know that such transaction
12 constitutes a direct or indirect:
13         (1) Sale or exchange, or leasing of any property from
14     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 from
19     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 to
22     a retirement system or pension fund with the provision of
23     excessive security or an unreasonably high rate of

 

 

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1     interest.
2         (3) Furnishing of goods, services or facilities from
3     the retirement system or pension fund to a party in
4     interest for less than adequate consideration, or from a
5     party in interest to a retirement system or pension fund
6     for more than adequate consideration.
7         (4) Transfer to, or use by or for the benefit of, a
8     party in interest of any assets of a retirement system or
9     pension fund for less than adequate consideration.
10     (b) A fiduciary with respect to a retirement system or
11 pension fund established under this Code shall not:
12         (1) Deal with the assets of the retirement system or
13     pension fund in his own interest or for his own account;
14         (2) In his individual or any other capacity act in any
15     transaction involving the retirement system or pension
16     fund on behalf of a party whose interests are adverse to
17     the interests of the retirement system or pension fund or
18     the interests of its participants or beneficiaries; or
19         (3) Receive any consideration for his own personal
20     account from any party dealing with the retirement system
21     or pension fund in connection with a transaction involving
22     the assets of the retirement system or pension fund.
23     (c) Nothing in this Section shall be construed to prohibit
24 any trustee from:
25         (1) Receiving any benefit to which he may be entitled
26     as a participant or beneficiary in the retirement system or

 

 

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1     pension fund.
2         (2) Receiving any reimbursement of expenses properly
3     and actually incurred in the performance of his duties with
4     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 party
7     in interest.
8     (d) A fiduciary of a pension fund established under Article
9 3 or 4 shall not knowingly cause or advise the pension fund to
10 engage in an investment transaction when the fiduciary (i) has
11 any direct interest in the income, gains, or profits of the
12 investment adviser through which the investment transaction is
13 made or (ii) has a business relationship with that investment
14 adviser that would result in a pecuniary benefit to the
15 fiduciary as a result of the investment transaction.
16     Violation of this subsection (d) is a Class 4 felony.
17     (e) A board member, employee, or consultant with respect to
18 a retirement system, pension fund, or investment board subject
19 to this Code, except those whose investments are restricted by
20 Section 1-113.2, shall not knowingly cause or advise the
21 retirement system, pension fund, or investment board to engage
22 in an investment transaction with an investment adviser when
23 the board member, employee, consultant, or their spouse (i) has
24 any direct interest in the income, gains, or profits of the
25 investment adviser through which the investment transaction is
26 made or (ii) has a relationship with that investment adviser

 

 

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1 that would result in a pecuniary benefit to the board member,
2 employee, or consultant or spouse of such board member,
3 employee, or consultant as a result of the investment
4 transaction. For purposes of this subsection (e), a consultant
5 includes an employee or agent of a consulting firm who has
6 greater than 7.5% ownership of the consulting firm.
7     Violation of this subsection (e) is a Class 4 felony.
8 (Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)