97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3336

 

Introduced 2/24/2011, by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
55 ILCS 5/Div. 6-35 heading new
55 ILCS 5/6-35000 new
65 ILCS 5/8-1-20 new
105 ILCS 5/10-20.53 new
30 ILCS 805/8.35 new

    Amends the Counties Code and Illinois Municipal Code to provide that if a county or municipality offers a 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then that county or municipality, and the persons acting under its authority, must act in accordance with the prudent investor rule when making plan-related decisions. Limits the concurrent exercise of home rule powers. Amends the School Code to provide that if a school board other than the Chicago Board of Education offers a 403(b) or 457(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then that school board, and the persons acting under its authority, must act in accordance with the prudent investor rule when making plan-related decisions. Amends the State Mandates Act to require implementation without reimbursement.


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FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY

 

 

A BILL FOR

 

HB3336LRB097 06673 KMW 46759 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Counties Code is amended by adding the
5heading of Div. 6-35 and Section 6-35000 as follows:
 
6    (55 ILCS 5/Div. 6-35 heading new)
7
Division 6-35. Application of the Prudent Investor Rule
8
to Eligible Deferred Compensation Plans

 
9    (55 ILCS 5/6-35000 new)
10    Sec. 6-35000. Application of the prudent investor rule to
11457(b) plans.
12    (a) If a county offers a 457(b) plan to its officers,
13employees, or both, or makes contributions to such a plan on
14behalf of its officers, employees, or both, then the county
15board and those persons acting under its authority must act in
16accordance with the prudent investor rule when making
17plan-related decisions.
18    (b) For the purposes of this Section, a person acts in
19accordance with the prudent investor rule if he or she acts in
20good faith and with the care, skill, prudence, diligence, and
21degree of judgment that an investor of prudence, discretion,
22and good judgment would exercise in the management of his or

 

 

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1her own affairs, taking into account the probable safety of the
2plan capital as well as the probable investment return to be
3derived from the invested assets.
4    (c) A home rule unit may not regulate a county board's or
5its agents' plan-related fiduciary obligations in a manner that
6is less restrictive than the regulation by the State of those
7obligations under subsection (a). This subsection (c) is a
8limitation under subsection (i) of Section 6 of Article VII of
9the Illinois Constitution on the concurrent exercise by home
10rule units of powers and functions exercised by the State.
11    (d) This Section does not apply to any plan authorized or
12created under the Illinois Pension Code.
 
13    Section 10. The Illinois Municipal Code is amended by
14adding Section 8-1-20 as follows:
 
15    (65 ILCS 5/8-1-20 new)
16    Sec. 8-1-20. Application of the prudent investor rule to
17457(b) plans.
18    (a) If a municipality offers a 457(b) plan to its officers,
19employees, or both, or makes contributions to such a plan on
20behalf of its officers, employees, or both, then the corporate
21authorities of the municipality and those persons acting under
22their authority must act in accordance with the prudent
23investor rule when making plan-related decisions.
24    (b) For the purposes of this Section, a person acts in

 

 

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1accordance with the prudent investor rule if he or she acts in
2good faith and with the care, skill, prudence, diligence, and
3degree of judgment that an investor of prudence, discretion,
4and sound judgment would exercise in the management of his or
5her own affairs, taking into account the probable safety of the
6plan capital as well as the probable investment return to be
7derived from the invested assets.
8    (c) A home rule unit may not regulate a municipal corporate
9authority's or its agents' plan-related fiduciary obligations
10in a manner that is less restrictive than the regulation by the
11State of those obligations under subsection (a). This
12subsection (c) is a limitation under subsection (i) of Section
136 of Article VII of the Illinois Constitution on the concurrent
14exercise by home rule units of powers and functions exercised
15by the State.
16    (d) This Section does not apply to any plan authorized or
17created under the Illinois Pension Code.
 
18    Section 15. The School Code is amended by adding Section
1910-20.53 as follows:
 
20    (105 ILCS 5/10-20.53 new)
21    Sec. 10-20.53. Application of the prudent investor rule to
22403(b) and 457(b) plans.
23    (a) If a school board other than the Chicago Board of
24Schools offers a 403(b) or 457(b) plan to its officers,

 

 

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1employees, or both, or makes contributions to such a plan on
2behalf of its officers, employees, or both, then the board and
3those persons acting under its authority must act in accordance
4with the prudent investor rule when making plan-related
5decisions.
6    (b) For the purposes of this Section, a person acts in
7accordance with the prudent investor rule if he or she acts in
8good faith and with the care, skill, prudence, diligence, and
9degree of judgment that an investor of prudence, discretion,
10and sound judgment would exercise in the management of his or
11her own affairs, taking into account the probable safety of the
12plan capital as well as the probable investment return to be
13derived from the invested assets.
14    (c) This Section does not apply to any plan authorized or
15created under the Illinois Pension Code.
 
16    Section 90. The State Mandates Act is amended by adding
17Section 8.35 as follows:
 
18    (30 ILCS 805/8.35 new)
19    Sec. 8.35. Exempt mandate. Notwithstanding Sections 6 and 8
20of this Act, no reimbursement by the State is required for the
21implementation of any mandate created by this amendatory Act of
22the 97th General Assembly.