HB5495 EngrossedLRB097 18371 KMW 63597 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 State Mandates Act is amended by adding
5Section 8.36 as follows:
 
6    (30 ILCS 805/8.36 new)
7    Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8
8of this Act, no reimbursement by the State is required for the
9implementation of any mandate created by this amendatory Act of
10the 97th General Assembly. Nothing in this amendatory Act of
11the 97th General Assembly shall override the process
12established under Section 22-60 of the School Code.
 
13    Section 10. The Counties Code is amended by adding the
14heading of Div. 6-35 and Section 6-35000 as follows:
 
15    (55 ILCS 5/Div. 6-35 heading new)
16
Division 6-35. Application of the Prudent Investor Rule
17
to Eligible Deferred Compensation Plans

 
18    (55 ILCS 5/6-35000 new)
19    Sec. 6-35000. Application of the prudent investor rule to
20457(b) plans.

 

 

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1    (a) Beginning January 1, 2015, if a county offers a 457(b)
2plan to its officers, employees, or both, or makes
3contributions to such a plan on behalf of its officers,
4employees, or both, then the plan sponsor must act in
5accordance with the prudent investor rule when making
6plan-related decisions.
7    (b) For the purposes of this Section, a plan sponsor acts
8in accordance with the prudent investor rule if he or she acts
9in good faith and with the care, skill, prudence, diligence,
10and degree of judgment that an investor of prudence,
11discretion, and good judgment would exercise in the management
12of his or her own affairs, taking into account all aspects of
13plan design, including, but not limited to, total delivered
14fees and surrender charges. The intent of this legislation is
15for the plan sponsor to consolidate to a single provider.
16    (c) A home rule unit may not regulate a county board's or
17its agents' plan-related fiduciary obligations in a manner that
18is less restrictive than the regulation by the State of those
19obligations under subsection (a). This subsection (c) is a
20limitation under subsection (i) of Section 6 of Article VII of
21the Illinois Constitution on the concurrent exercise by home
22rule units of powers and functions exercised by the State.
23    (d) This Section does not apply to any plan authorized or
24created under the Illinois Pension Code.
 
25    Section 15. The Illinois Municipal Code is amended by

 

 

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1adding Section 8-1-20 as follows:
 
2    (65 ILCS 5/8-1-20 new)
3    Sec. 8-1-20. Application of the prudent investor rule to
4457(b) plans.
5    (a) Beginning January 1, 2015, if a municipality offers a
6457(b) plan to its officers, employees, or both, or makes
7contributions to such a plan on behalf of its officers,
8employees, or both, then the plan sponsor must act in
9accordance with the prudent investor rule when making
10plan-related decisions.
11    (b) For the purposes of this Section, a plan sponsor acts
12in accordance with the prudent investor rule if he or she acts
13in good faith and with the care, skill, prudence, diligence,
14and degree of judgment that an investor of prudence,
15discretion, and sound judgment would exercise in the management
16of his or her own affairs, taking into account all aspects of
17plan design, including, but not limited to, total delivered
18fees and surrender charges. The intent of this legislation is
19for the plan sponsor to consolidate to a single provider.
20    (c) A home rule unit may not regulate a municipal corporate
21authority's or its agents' plan-related fiduciary obligations
22in a manner that is less restrictive than the regulation by the
23State of those obligations under subsection (a). This
24subsection (c) is a limitation under subsection (i) of Section
256 of Article VII of the Illinois Constitution on the concurrent

 

 

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1exercise by home rule units of powers and functions exercised
2by the State.
3    (d) This Section does not apply to any plan authorized or
4created under the Illinois Pension Code.
 
5    Section 20. The School Code is amended by adding Section
610-20.55 as follows:
 
7    (105 ILCS 5/10-20.55 new)
8    Sec. 10-20.55. Application of the prudent investor rule to
9403(b) and 457(b) plans.
10    (a) Beginning January 1, 2015, if a school board other than
11the Chicago Board of Schools offers a 403(b) or 457(b) plan to
12its officers, employees, or both, or makes contributions to
13such a plan on behalf of its officers, employees, or both, then
14the plan sponsor must act in accordance with the prudent
15investor rule when making plan-related decisions.
16    (b) For the purposes of this Section, a plan sponsor acts
17in accordance with the prudent investor rule if he or she acts
18in good faith and with the care, skill, prudence, diligence,
19and degree of judgment that an investor of prudence,
20discretion, and sound judgment would exercise in the management
21of his or her own affairs, taking into account all aspects of
22plan design, including, but not limited to, total delivered
23fees, surrender charges, and third-party administrator fees.
24The intent of this legislation is for the plan sponsor to

 

 

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1consolidate to a single provider.
2    (c) The plan sponsor may comply with the requirements of
3this Section by joining a multiple employer plan that already
4complies with the prudent investor rule.
5    (d) This Section does not apply to any plan authorized or
6created under the Illinois Pension Code.