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| 1 | AN ACT concerning public employee benefits. | ||||||
| 2 | Be it enacted by the People of the State of Illinois, | ||||||
| 3 | represented in the General Assembly: | ||||||
| 4 | Section 5. The Illinois Municipal Code is amended by | ||||||
| 5 | adding Section 10-4-3.5 as follows: | ||||||
| 6 | (65 ILCS 5/10-4-3.5 new) | ||||||
| 7 | Sec. 10-4-3.5. Automatic enrollment in deferred | ||||||
| 8 | compensation plan required. | ||||||
| 9 | (a) As used in this Section, "eligible deferred | ||||||
| 10 | compensation plan" has the meaning given in subsection (b) of | ||||||
| 11 | Section 457 of the federal Internal Revenue Code. | ||||||
| 12 | (b) Beginning January 1, 2027, a municipality with a | ||||||
| 13 | population of 500,000 or more shall automatically enroll all | ||||||
| 14 | employees of the municipality who first become employees of | ||||||
| 15 | the municipality on or after January 1, 2027 and who are | ||||||
| 16 | participants in a pension fund established under Article 5, 6, | ||||||
| 17 | or 8 of the Illinois Pension Code into an eligible deferred | ||||||
| 18 | compensation plan that the municipality has established for | ||||||
| 19 | its employees. If a municipality has not established an | ||||||
| 20 | eligible deferred compensation plan for its employees, then | ||||||
| 21 | the municipality shall establish an eligible deferred | ||||||
| 22 | compensation plan for its employees on or before January 1, | ||||||
| 23 | 2027. | ||||||
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| 1 | (c) An employee subject to automatic enrollment under this | ||||||
| 2 | Section shall have the option to opt out of the plan and shall | ||||||
| 3 | be informed of that option within 30 days after being hired. | ||||||
| 4 | (d) If another option is not chosen by the employee, then | ||||||
| 5 | the default employee contribution to the account shall be 3% | ||||||
| 6 | of the employee's salary. The plan administrator may | ||||||
| 7 | automatically increase employees' contributions by no more | ||||||
| 8 | than 1% per year, and an employee may choose to opt out of the | ||||||
| 9 | automatic increases. | ||||||
| 10 | (e) Municipalities, including home rule municipalities, | ||||||
| 11 | may not regulate deferred compensation programs in a manner | ||||||
| 12 | inconsistent with this Section. This Section is a denial and | ||||||
| 13 | limitation of home rule powers and functions under subsection | ||||||
| 14 | (i) of Section 6 of Article VII of the Illinois Constitution. | ||||||
| 15 | Section 90. The State Mandates Act is amended by adding | ||||||
| 16 | Section 8.50 as follows: | ||||||
| 17 | (30 ILCS 805/8.50 new) | ||||||
| 18 | Sec. 8.50. Exempt mandate. Notwithstanding Sections 6 and | ||||||
| 19 | 8 of this Act, no reimbursement by the State is required for | ||||||
| 20 | the implementation of any mandate created by this amendatory | ||||||
| 21 | Act of the 104th General Assembly. | ||||||
| 22 | Section 99. Effective date. This Act takes effect upon | ||||||
| 23 | becoming law. | ||||||