SB3713 97TH GENERAL ASSEMBLY

LRB097 19733 JDS 64993 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3713

Introduced 2/10/2012, by Sen. Don Harmon - Heather A. Steans - Suzi Schmidt and Carole Pankau

SYNOPSIS AS INTRODUCED:

15 ILCS 405/26 new

Amends the State Comptroller Act. Authorizes the State Comptroller to create, administer, manage, and operate a supplemental employee deferral plan to supplement and enhance the retirement income of employees of public school districts and community colleges. Sets forth the requirements for a supplemental employee deferral plan.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning State government.

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

Section 5. The State Comptroller Act is amended by adding Section 26 as follows:

(15 ILCS 405/26 new)

Sec. 26. Supplemental Employee Deferral Plan. The Comptroller may establish, administer, manage, and operate a supplemental employee deferral plan to supplement and enhance the retirement income of employees of public school districts and community colleges. As used in this Section, "supplemental employee deferral plan" means a tax deferred annuity described in Section 403(b) of the Internal Revenue Code of 1986, as amended, including a custodial account described in Section 403(b)(7) of the Internal Revenue Code of 1986, as amended. The supplemental employee deferral plan shall comply with all applicable provisions of Section 403(b) of the Internal Revenue Code of 1986, as amended. If a school district or community college elects to participate in the supplemental employee deferral plan, any employee of the school district or community college who meets the eligibility requirements prescribed by the Comptroller may participate in the plan.

Notwithstanding any law to the contrary, participation in the supplemental employee deferral plan authorizes the participant's employer to make salary reductions from the participant's compensation and contribute the salary reductions to the plan. An employer may make employer contributions to the supplemental employee deferral plan if the plan permits. Any compensation deferred under a supplemental employee deferral plan shall continue to be included as regular compensation for the purpose of computing the retirement and pension benefits earned by an employee. As used in this Section, "compensation" includes compensation received in a lump sum for accumulated unused vacation time, personal leave, or sick leave. Employee contributions and earnings on employee contributions are immediately vested. Employer contributions, if any, and the earnings on employer contributions shall vest according to the schedule established in the plan.

The supplemental employee deferral plan shall provide for the recovery of any administrative expenses against the earnings from investments or by charging fees equitably prorated among the participants or by any other appropriate and equitable method as the Comptroller shall determine. Different methods for recovery of administrative expenses may be provided in relation to the different types of investment programs, and the Comptroller may provide for the allocation of administration expenses among varying types of programs for this purpose.

The Comptroller may employ services that he or she deems necessary for the operation and administration of the plan and may administer the plan thorough a third-party vendor. The supplemental employee deferral plan may be invested in any investments that are deemed acceptable by the Comptroller including, but not limited to, life insurance or annuity contracts or mutual funds. All insurance, annuities, mutual funds, or other investments used under the plan must be reviewed and selected by the Comptroller based on a competitive bidding process as established by such specifications and considerations as are deemed appropriate by the Comptroller.

However, the plan shall permit a school district or community college that elects to participate in the supplemental employee deferral plan to offer to its employees additional investments, as determined by the school district or community college, not selected by the Comptroller, provided that the additional investments contribute to the recovery of administrative expenses and satisfy fee disclosure requirements pursuant to terms no more onerous than those applicable to the investments selected by the Comptroller.

Upon creating the supplemental employee deferral plan, the Comptroller shall give bond with 2 or more sufficient sureties, payable to and for the benefit of the participants in the supplemental employee deferral plan, in the penal sum of $1,000,000, conditioned upon the faithful discharge of his or her duties in relation to the supplemental employee deferral plan.