HB1401 98TH GENERAL ASSEMBLY

LRB098 07619 OMW 37691 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1401

Introduced , by Rep. Elaine Nekritz

SYNOPSIS AS INTRODUCED:

30 ILCS 805/8.37 new
105 ILCS 5/10-20.55 new

Amends the State Mandates Act. Provides that no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act and that nothing in this amendatory Act overrides the process established under the School Code. Amends the School Code. Provides that if a school board other than the Chicago Board of Schools offers a 403(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the plan sponsor must act in accordance with the prudent investor rule when making plan-related decisions. Sets forth the prudent investor rule and provides that this amendatory Act does not apply to any plan under the Illinois Pension Code. Effective immediately.

A BILL FOR

AN ACT concerning finance.

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

Section 5. The State Mandates Act is amended by adding Section 8.37 as follows:

(30 ILCS 805/8.37 new)

Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 98th General Assembly. Nothing in this amendatory Act of the 98th General Assembly shall override the process established under Section 22-60 of the School Code.

Section 10. The School Code is amended by adding Section 10-20.55 as follows:

(105 ILCS 5/10-20.55 new)

Sec. 10-20.55. Application of the prudent investor rule to 403(b) plans.

(a) Beginning January 1, 2015, if a school board other than the Chicago Board of Schools offers a 403(b) plan to its officers, employees, or both, or makes contributions to such a plan on behalf of its officers, employees, or both, then the plan sponsor must act in accordance with the prudent investor rule when making plan-related decisions.

(b) For the purposes of this Section, a plan sponsor acts in accordance with the prudent investor rule if he or she acts in good faith and with the care, skill, prudence, diligence, and degree of judgment that an investor of prudence, discretion, and sound judgment would exercise in the management of his or her own affairs, taking into account all aspects of plan design, including, but not limited to, total delivered fees, surrender charges, and third-party administrator fees.

(c) This Section does not apply to any plan authorized or created under the Illinois Pension Code.

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