SB2568sam006 103RD GENERAL ASSEMBLY

Sen. Karina Villa

Filed: 5/7/2024

10300SB2568sam006 LRB103 31865 RJT 73100 a

AMENDMENT TO SENATE BILL 2568

AMENDMENT NO. ______. Amend Senate Bill 2568, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. The School Code is amended by adding Section 22-100 as follows:

(105 ILCS 5/22-100 new)

Sec. 22-100. Retirement savings plans; requirements.

(a) This Section applies to contracts entered into or renewed on or after the effective date of this amendatory Act of the 103rd General Assembly.

(b) By July 1, 2026, the school board of each school district in the State that offers its employees a retirement savings plan established under Section 403(b) of the Internal Revenue Code of 1986 may enter into a contract with one or more vendors to provide participants with plan investments options.

Any vendor selected under this Section after the effective date of this amendatory Act of the 103rd General Assembly must be mutually agreed upon by the affected collective bargaining unit or units and the school board and must ensure that:

(1) neither it nor the plan investment options it provides impose an administrative asset-based fee in excess of 0.50%;

(2) neither it nor the plan investment options it provides impose front-end sales or advisory charges;

(3) neither it nor the plan investment options it provides impose surrender charges;

(4) the provided plan investment options offer access to all of the following types of funds:

(A) a target-date index fund with an expense ratio that is less than or equal to 0.25%;

(B) a broad-based domestic index fund with an expense ratio that is less than or equal to 0.10%;

(C) a broad-based bond index fund with an expense ratio that is less than or equal to 0.10%; and

(D) an international index fund with an expense ratio that is less than or equal to 0.10%.

(c) Any vendor offering a plan under this Section may charge an investment advisory representative fee not to exceed 0.50% annually.

(d) If any new vendor is chosen to administer a retirement savings plan that is offered by the school board of a school district under this Section, an employee of the school district may opt out of having the employee's individual 403(b) mutual fund custodial account or annuity contract transferred to that new vendor. This subsection does not apply to assets held by the employer in a group contract.

(e) A participant who is contributing to a 403(b) retirement savings plan account through a salary reduction agreement on or before the effective date of this amendatory Act of the 103rd General Assembly may continue to make contributions even if the account does not meet the requirements provided in this Section.

(f) If a participant stops contributing to a 403(b) retirement savings plan account that does not meet the requirements of this Section, then the participant is no longer eligible to make salary reduction contributions to the 403(b) retirement savings plan account that does not meet the requirements of this Section.

(g) A collective bargaining unit is not liable in the selection of a vendor under this Section.

(h) Nothing in this Section may cause or be used to support liability against a school board or any of a school board's employees under any theory of law or equity, including, but not limited to, contract law.

(i) Nothing in this Section may be interpreted to require a school board to violate any laws, the terms of an existing 403(b) plan document, or the terms of any collective bargaining agreement or contract.".