State of Illinois
91st General Assembly
Legislation

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91_HB1412

 
                                               LRB9101698EGfg

 1        AN  ACT  to  amend  the Illinois Pension Code by changing
 2    Section 1-110.

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

 5        Section  5.   The  Illinois  Pension  Code  is amended by
 6    changing Section 1-110 as follows:

 7        (40 ILCS 5/1-110) (from Ch. 108 1/2, par. 1-110)
 8        Sec. 1-110.  Prohibited transactions.
 9        (a)  A fiduciary with respect to a retirement  system  or
10    pension fund shall not cause the retirement system or pension
11    fund  to engage in a transaction if he or she knows or should
12    know that such transaction constitutes a direct or indirect:
13             (1)  Sale or exchange, or leasing  of  any  property
14        from  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
19        from  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
22        to a retirement system or pension fund with the provision
23        of excessive security  or an unreasonably  high  rate  of
24        interest.
25             (3)  Furnishing  of  goods,  services  or facilities
26        from the retirement system or pension fund to a party  in
27        interest  for less than adequate consideration, or from a
28        party in interest to a retirement system or pension  fund
29        for more than adequate consideration.
30             (4)  Transfer to, or use by or for the benefit of, a
31        party in interest of any assets of a retirement system or
 
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 1        pension fund for less than adequate consideration.
 2        (b)  A  fiduciary  with respect to a retirement system or
 3    pension fund established under this Code shall not:
 4             (1)  deal with the assets of the  retirement  system
 5        or  pension  fund  in  his  own  interest  or for his own
 6        account;
 7             (2)  in his individual or any other capacity act  in
 8        any   transaction  involving  the  retirement  system  or
 9        pension fund on behalf of a  party  whose  interests  are
10        adverse  to  the  interests  of  the retirement system or
11        pension fund or the  interests  of  its  participants  or
12        beneficiaries; or
13             (3)  receive  any consideration for his own personal
14        account from any party dealing with the retirement system
15        or  pension  fund  in  connection  with   a   transaction
16        involving  the assets of the retirement system or pension
17        fund; or
18             (4)  invest any assets of the retirement  system  or
19        pension fund in tobacco company securities after December
20        31, 1999.  This item (4) does not require the liquidation
21        of  any  investment  in  existence  on that date, but the
22        fiduciary is encouraged to  review  the  advisability  of
23        continuing  any  existing  investment  in tobacco company
24        securities in light of the public policy of this item (4)
25        discouraging  such  investments  and  to   consider   the
26        advantages   of   liquidating   the   investment   at  an
27        appropriate time.  For the purposes  of  this  item  (4),
28        "tobacco company securities" means securities issued by a
29        company   or  other  business  entity  that  manufactures
30        tobacco or tobacco products for human use.
31        (c)  Nothing  in  this  Section  shall  be  construed  to
32    prohibit any trustee from:
33             (1)  Receiving  any  benefit  to  which  he  may  be
34        entitled  as  a  participant  or   beneficiary   in   the
 
                            -3-                LRB9101698EGfg
 1        retirement system or pension fund.
 2             (2)  Receiving   any   reimbursement   of   expenses
 3        properly  and actually incurred in the performance of his
 4        duties with 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
 7        party in interest.
 8    (Source: P.A. 88-535.)

 9        Section 99. Effective date.  This Act takes  effect  upon
10    becoming law.

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