Full Text of SB2103 102nd General Assembly
SB2103sam003 102ND GENERAL ASSEMBLY | Sen. Robert F. Martwick Filed: 4/16/2021
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| 1 | | AMENDMENT TO SENATE BILL 2103
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2103 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Pension Code is amended by | 5 | | changing Sections 15-202, 16-204, and 24-104 as follows: | 6 | | (40 ILCS 5/15-202) | 7 | | Sec. 15-202. Optional deferred compensation plan defined | 8 | | contribution benefit . | 9 | | (a) As soon as practicable after August 10, 2018 ( the | 10 | | effective date of Public Act 100-769) this amendatory Act of | 11 | | the 100th General Assembly , the System shall offer a deferred | 12 | | compensation plan that is eligible under Section 457(b) of the | 13 | | Internal Revenue Code of 1986, as amended, defined | 14 | | contribution benefit to participating employees active members | 15 | | of the System employed by employers described in Section | 16 | | 15-106 of this Code that qualify as eligible employers under |
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| 1 | | Section 457(e)(1)(A) of the Internal Revenue Code of 1986, as | 2 | | amended . Such eligible employers shall adopt the plan with an | 3 | | effective date no later than September 1, 2021. Participating | 4 | | employees may voluntarily elect to make elective deferrals to | 5 | | the eligible deferred compensation plan. Eligible employers | 6 | | may make optional employer contributions to the plan on behalf | 7 | | of participating employees, which contributions may be | 8 | | maintained, increased, reduced, or eliminated at the | 9 | | discretion of the employer from plan year to plan year. The | 10 | | defined contribution benefit shall be an optional benefit to | 11 | | any member who chooses to participate. The plan defined | 12 | | contribution benefit shall collect voluntary optional employee | 13 | | and optional employer contributions into an account for each | 14 | | participant and shall offer investment options to the | 15 | | participant. The plan benefit under this Section shall be | 16 | | operated in full compliance with any applicable State and | 17 | | federal laws, and the System shall utilize generally accepted | 18 | | practices in creating and maintaining the plan benefit for the | 19 | | best interest of the participants. The System may use funds | 20 | | from the employee and employer contributions to defray any and | 21 | | all costs of creating and maintaining the plan benefit . The | 22 | | System shall produce an annual report on the participation in | 23 | | the plan benefit and shall make the report public.
| 24 | | (b) The System shall automatically enroll in the eligible | 25 | | deferred compensation plan any employee of an eligible | 26 | | employer who first becomes a participating employee of the |
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| 1 | | System on or after July 1, 2022 under an eligible automatic | 2 | | contribution arrangement that is subject to Section 414(w) of | 3 | | the Internal Revenue Code of 1986, as amended, and the United | 4 | | States Department of Treasury regulations promulgated | 5 | | thereunder. An employee who is automatically enrolled under | 6 | | this subsection (b) shall have 3% of his or her compensation, | 7 | | as defined by the plan, for each pay period deferred on a | 8 | | pre-tax basis into his or her account, subject to any | 9 | | contribution limits applicable to the plan. The Board may | 10 | | increase the default percentage of compensation deferred under | 11 | | this subsection (b). | 12 | | An employee shall have 30 days from the date on which the | 13 | | System provides the notice required under Section 414(w) of | 14 | | the Internal Revenue Code of 1986, as amended, to elect to not | 15 | | participate in the eligible deferred compensation plan or to | 16 | | elect to increase or reduce the initial amount of elective | 17 | | deferrals made to the plan. In the absence of such affirmative | 18 | | election, the employee shall be automatically enrolled in the | 19 | | plan on the first day of the calendar month, or as soon as | 20 | | administratively practicable thereafter, following the 30th | 21 | | day from the date on which the System provides the required | 22 | | notice. An employee who has been automatically enrolled in the | 23 | | plan under this subsection (b) may elect, within 90 days of | 24 | | enrollment, to withdraw from the plan and receive a refund of | 25 | | amounts deferred, adjusted by applicable earnings and fees. An | 26 | | employee making such an election shall forfeit all employer |
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| 1 | | matching contributions, if any, made with respect to such | 2 | | refunded elective deferrals and such forfeited amounts shall | 3 | | be used to defray plan expenses. Any refunded elective | 4 | | deferrals shall be included in the employee's gross income for | 5 | | the taxable year in which the refund is issued. | 6 | | (c) The System may provide for one or more automatic | 7 | | contribution arrangements, which shall comply with all | 8 | | applicable Internal Revenue Service rules and regulations, in | 9 | | conjunction with or in lieu of the eligible automatic | 10 | | contribution arrangement under subsection (b), for | 11 | | participating employees of eligible employers whose annual | 12 | | earnings are limited by application of subsection (b) of | 13 | | Section 15-111 of this Code. The amount of elective deferrals | 14 | | made for the employee each pay period under an automatic | 15 | | contribution arrangement shall equal the default percentage | 16 | | specified by resolution of the Board multiplied by the | 17 | | employee's compensation as defined by the plan, subject to any | 18 | | contribution limits applicable to the plan, and shall be made | 19 | | on a pre-tax basis. An employee subject to this subsection (c) | 20 | | shall have 30 days from the date on which the System provides | 21 | | written notice to the employee to elect to not participate in | 22 | | the eligible deferred compensation plan or to elect to | 23 | | increase or reduce the amount of initial elective deferrals | 24 | | made to the plan. In the absence of such affirmative election, | 25 | | the employee shall be automatically enrolled in the plan | 26 | | beginning the first day of the calendar month, or as soon as |
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| 1 | | administratively practicable thereafter, following the 30th | 2 | | day from the date on which the System provides the required | 3 | | notice. | 4 | | (d) The System may provide that the default percentage for | 5 | | any employee automatically enrolled in the eligible deferred | 6 | | compensation plan under subsection (b) or (c) be increased by | 7 | | a specified percentage each plan year after the plan year in | 8 | | which the employee is automatically enrolled in the plan. The | 9 | | amount of automatic annual increases in any plan year shall | 10 | | not exceed 1% of compensation as defined by the plan. | 11 | | (e) The changes made to this Section by this amendatory | 12 | | Act of the 102nd General Assembly are corrections of existing | 13 | | law and are intended to be retroactive to the effective date of | 14 | | Public Act 100-769, notwithstanding Section 1-103.1 of this | 15 | | Code. | 16 | | (Source: P.A. 100-769, eff. 8-10-18.) | 17 | | (40 ILCS 5/16-204) | 18 | | Sec. 16-204. Optional defined contribution benefit. As | 19 | | soon as practicable after the effective date of this | 20 | | amendatory Act of the 100th General Assembly, the System shall | 21 | | offer a defined contribution benefit to active members of the | 22 | | System. The defined contribution benefit shall be an optional | 23 | | benefit to any member who chooses to participate. The defined | 24 | | contribution benefit shall collect optional employee and | 25 | | optional employer contributions into an account and shall |
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| 1 | | offer investment options to the participant. The benefit under | 2 | | this Section shall be operated in full compliance with any | 3 | | applicable State and federal laws, and the System shall | 4 | | utilize generally accepted practices in creating and | 5 | | maintaining the benefit for the best interest of the | 6 | | participants. The System may use funds from the employee and | 7 | | employer contributions to defray any and all costs of creating | 8 | | and maintaining the benefit. In addition, the System may use | 9 | | funds provided under Section 16-158 of this Code to defray any | 10 | | and all costs of creating and maintaining the benefit and then | 11 | | shall reimburse those costs from funds received from the | 12 | | employee and employer contributions under this Section. All | 13 | | employers must comply with the reporting and administrative | 14 | | functions established by the System and are required to | 15 | | implement the benefits established under this Section. The | 16 | | System shall produce an annual report on the participation in | 17 | | the benefit and shall make the report public.
| 18 | | As soon as is practicable on or after January 1, 2022, the | 19 | | System shall automatically enroll any employee who first | 20 | | becomes an active member or participant in the System. A | 21 | | member automatically enrolled under this Section shall have 3% | 22 | | of his or her pre-tax gross compensation for each compensation | 23 | | period deferred into his or her deferred compensation account, | 24 | | unless the member otherwise instructs the System on forms | 25 | | approved by the System. A member may elect, in a manner | 26 | | provided for by the System, to not participate in the defined |
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| 1 | | contribution benefit or to increase or reduce the amount of | 2 | | pre-tax gross compensation contributed, consistent with State | 3 | | or federal law. A member shall be automatically enrolled in | 4 | | the benefit beginning the first day of the pay period | 5 | | following the member's 30th day of employment. A member who | 6 | | has been automatically enrolled in the benefit may elect, | 7 | | within 90 days of enrollment, to withdraw from the benefit and | 8 | | receive a refund of amounts deferred, plus or minus any | 9 | | applicable earnings, investment fees, and administrative fees. | 10 | | Any refunded amount shall be included in the member's gross | 11 | | income for the taxable year in which the refund is issued. | 12 | | On or after January 1, 2023, the System may elect to | 13 | | increase the automatic annual contributions under this | 14 | | Section. The increase in the rate of contribution, however, | 15 | | shall not exceed 2% of a member's pre-tax gross compensation | 16 | | per year, and at no time shall any total contribution exceed | 17 | | any contribution limits established by State or federal law. | 18 | | (Source: P.A. 100-769, eff. 8-10-18.)
| 19 | | (40 ILCS 5/24-104) (from Ch. 108 1/2, par. 24-104)
| 20 | | Sec. 24-104.
The Illinois State Board of Investment | 21 | | created under
Article 22A of this Act shall develop and | 22 | | establish a deferred
compensation plan for employees of the | 23 | | State which shall be known as the
State Employees Deferred | 24 | | Compensation Plan. The Plan shall provide for
the Board to | 25 | | review proposed investment offerings and shall require that
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| 1 | | only investments determined to be acceptable by the Board may | 2 | | be used
for investing compensation deferred.
| 3 | | The Plan shall include appropriate provisions pertaining | 4 | | to its day
to day operation providing for methods of electing | 5 | | to defer income,
methods of changing the amount of income to be | 6 | | deferred, methods of
selecting from among investment options | 7 | | available under the plan and
such other provisions as may be | 8 | | appropriate.
| 9 | | The Plan shall provide for the preparation, and | 10 | | distribution from
time to time to all eligible State | 11 | | employees, of pamphlets describing
the Plan and outlining the | 12 | | options and opportunities available to State
employees under | 13 | | the Plan. Such pamphlets, however, shall not be distributed to | 14 | | employees who are covered under Articles 7, 15, or 16 of this | 15 | | Code.
| 16 | | The Plan established under this Section shall not be | 17 | | implemented or amended
until the Board is satisfied that
| 18 | | compensation deferred under the Plan is not subject to income | 19 | | tax for
the year in which it is earned and that the taxation of | 20 | | such
compensation will be deferred until the time of its | 21 | | distribution to the
employee.
| 22 | | The Board shall also review and oversee the administration | 23 | | of the Plan.
| 24 | | (Source: P.A. 81-671.)
| 25 | | Section 90. The State Mandates Act is amended by adding |
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| 1 | | Section 8.45 as follows: | 2 | | (30 ILCS 805/8.45 new) | 3 | | Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and | 4 | | 8 of this Act, no reimbursement by the State is required for | 5 | | the implementation of any mandate created by this amendatory | 6 | | Act of the 102nd General Assembly.
| 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law.".
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