99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB3071

 

Introduced 2/19/2016, by Sen. James F. Clayborne, Jr.

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/22A-109  from Ch. 108 1/2, par. 22A-109
40 ILCS 5/22A-111  from Ch. 108 1/2, par. 22A-111
40 ILCS 5/22A-113.1  from Ch. 108 1/2, par. 22A-113.1
40 ILCS 5/22A-113.2  from Ch. 108 1/2, par. 22A-113.2
40 ILCS 5/22A-113.3  from Ch. 108 1/2, par. 22A-113.3

    Amends the Illinois Pension Code. Provides that the Illinois State Board of Investment must appoint and retain a qualified custodian of the board (now, the State Treasurer serves as custodian). Makes conforming changes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3071LRB099 18394 EFG 42769 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 22A-109, 22A-111, 22A-113.1, 22A-113.2, and 22A-113.3
6as follows:
 
7    (40 ILCS 5/22A-109)  (from Ch. 108 1/2, par. 22A-109)
8    Sec. 22A-109. Membership of board. The board shall consist
9of the following members:
10        (1) Five trustees appointed by the Governor with the
11    advice and consent of the Senate who may not hold an
12    elective State office.
13        (2) The Treasurer.
14        (3) The Comptroller, who shall represent the State
15    Employees' Retirement System of Illinois.
16        (4) The Chairperson of the General Assembly Retirement
17    System.
18        (5) The Chairperson of the Judges Retirement System of
19    Illinois.
20The appointive members shall serve for terms of 4 years except
21that the terms of office of the original appointive members
22pursuant to this amendatory Act of the 96th General Assembly
23shall be as follows: One member for a term of 1 year; 1 member

 

 

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1for a term of 2 years; 1 member for a term of 3 years; and 2
2members for a term of 4 years. Vacancies among the appointive
3members shall be filled for unexpired terms by appointment in
4like manner as for original appointments, and appointive
5members shall continue in office until their successors have
6been appointed and have qualified.
7    Notwithstanding any provision of this Section to the
8contrary, the term of office of each trustee of the Board
9appointed by the Governor who is sitting on the Board on the
10effective date of this amendatory Act of the 96th General
11Assembly is terminated on that effective date. A trustee
12sitting on the board on the effective date of this amendatory
13Act of the 96th General Assembly may not hold over in office
14for more than 60 days after the effective date of this
15amendatory Act of the 96th General Assembly. Nothing in this
16Section shall prevent the Governor from making a temporary
17appointment or nominating a trustee holding office on the day
18before the effective date of this amendatory Act of the 96th
19General Assembly.
20    Each person appointed to membership shall qualify by taking
21an oath of office before the Secretary of State stating that he
22will diligently and honestly administer the affairs of the
23board and will not violate or knowingly permit the violation of
24any provisions of this Article.
25    Members of the board shall receive no salary for service on
26the board but shall be reimbursed for travel expenses incurred

 

 

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1while on business for the board according to the standards in
2effect for members of the Illinois Legislative Research Unit.
3    A majority of the members of the board shall constitute a
4quorum. The board shall elect from its membership, biennially,
5a Chairman, Vice Chairman and a Recording Secretary. These
6officers, together with one other member elected by the board,
7shall constitute the executive committee. During the interim
8between regular meetings of the board, the executive committee
9shall have authority to conduct all business of the board and
10shall report such business conducted at the next following
11meeting of the board for ratification.
12    No member of the board shall have any interest in any
13brokerage fee, commission or other profit or gain arising out
14of any investment made by the board. This paragraph does not
15preclude ownership by any member of any minority interest in
16any common stock or any corporate obligation in which
17investment is made by the board.
18    The board shall contract for a blanket fidelity bond in the
19penal sum of not less than $1,000,000.00 to cover members of
20the board, the director and all other employees of the board
21conditioned for the faithful performance of the duties of their
22respective offices, the premium on which shall be paid by the
23board. The bond shall be filed with the State Treasurer for
24safekeeping.
25(Source: P.A. 96-6, eff. 4-3-09.)
 

 

 

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1    (40 ILCS 5/22A-111)  (from Ch. 108 1/2, par. 22A-111)
2    Sec. 22A-111. The Board shall manage the investments of any
3pension fund, retirement system, or education fund for the
4purpose of obtaining a total return on investments for the long
5term. It also shall perform such other functions as may be
6assigned or directed by the General Assembly.
7    The authority of the board to manage pension fund
8investments and the liability shall begin when there has been a
9physical transfer of the pension fund investments to the board
10and placed in the custody of the board's custodian State
11Treasurer.
12    The authority of the board to manage monies from the
13education fund for investment and the liability of the board
14shall begin when there has been a physical transfer of
15education fund investments to the board and placed in the
16custody of the board's custodian State Treasurer.
17    The board may not delegate its management functions, but it
18may, but is not required to, arrange to compensate for
19personalized investment advisory service for any or all
20investments under its control with any national or state bank
21or trust company authorized to do a trust business and
22domiciled in Illinois, other financial institution organized
23under the laws of Illinois, or an investment advisor who is
24qualified under Federal Investment Advisors Act of 1940 and is
25registered under the Illinois Securities Law of 1953. Nothing
26contained herein shall prevent the Board from subscribing to

 

 

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1general investment research services available for purchase or
2use by others. The Board shall also have the authority to
3compensate for accounting services.
4    This Section shall not be construed to prohibit the
5Illinois State Board of Investment from directly investing
6pension assets in public market investments, private
7investments, real estate investments, or other investments
8authorized by this Code.
9(Source: P.A. 96-1554, eff. 3-18-11.)
 
10    (40 ILCS 5/22A-113.1)  (from Ch. 108 1/2, par. 22A-113.1)
11    Sec. 22A-113.1. Investable funds.
12    Each retirement system under the management of the Illinois
13State Board of Investment shall report to the board from time
14to time the amounts of funds available for investment. These
15amounts shall be transferred immediately to the board's
16custodian or the custodian's State Treasurer or his authorized
17agent for the account of the board to be applied for investment
18by the board. Notice to the Illinois State Board of Investment
19of each such transfer shall be given by the retirement system
20as the transfer occurs.
21(Source: P.A. 78-646.)
 
22    (40 ILCS 5/22A-113.2)  (from Ch. 108 1/2, par. 22A-113.2)
23    Sec. 22A-113.2. Custodian State Treasurer.
24    The securities, funds and other assets transferred to the

 

 

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1The Illinois State Board of Investment or otherwise acquired by
2the board shall be placed in the custody of the board's
3custodian. The custodian shall State Treasurer who shall serve
4as official custodian of the board, provide adequate safe
5deposit facilities therefor and hold all such securities, funds
6and other assets subject to the order of the board.
7    As soon as may be practicable, but in no event later than
8December 31, 2016, the board shall appoint and retain a
9qualified custodian. Until a custodian has been appointed by
10the board, the State Treasurer shall serve as official
11custodian of the board.
12    The custodian State Treasurer shall furnish a corporate
13surety bond of such amount as the board designates, which bond
14shall indemnify the board against any loss that may result from
15any action or failure to act by the custodian Treasurer or any
16of the custodian's his agents. All charges incidental to the
17procuring and giving of such bond shall be paid by the board.
18The bond shall be in the custody of the board.
19(Source: P.A. 77-611.)
 
20    (40 ILCS 5/22A-113.3)  (from Ch. 108 1/2, par. 22A-113.3)
21    Sec. 22A-113.3. Investable funds of education foundation.
22The Illinois Bank Examiners' Education Foundation shall report
23to the board from time to time the amounts of monies available
24for investment by the board. These amounts shall be transferred
25promptly to the board's custodian or the custodian's State

 

 

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1Treasurer or his authorized agent for the account of the board
2to be applied for investment by the board. Notice to the board
3of each such transfer shall be given by the Illinois Bank
4Examiners' Education Foundation after the transfer occurs.
5(Source: P.A. 84-1127.)
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.