96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5586


 
Introduced 2/9/2010, by Rep. Tom Cross - Mike Fortner
 
SYNOPSIS AS INTRODUCED:
 		








  



40 ILCS 5/1-110
  from Ch. 108 1/2, par. 1-110







    Amends the Illinois Pension Code. Makes a technical change in a Section concerning prohibited transactions.
















LRB096 19107 AMC 34498 b

















 


 


A BILL FOR









 











HB5586

LRB096 19107 AMC 34498 b






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    AN ACT concerning public employee benefits.

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

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



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    (40 ILCS 5/1-110)  (from Ch. 108 1/2, par. 1-110)



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    Sec. 1-110. Prohibited Transactions. 

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    (a) A fiduciary with respect to a retirement system, 
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pension fund, or investment board shall
not cause the the 
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retirement system or pension fund to engage in a transaction if

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he or she knows or should know that such transaction 
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constitutes a direct or
indirect:


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        (1) Sale or exchange, or leasing of any property from 
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    the retirement
system
or pension fund to a party in 
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    interest for less than adequate consideration,
or from a 
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    party in interest to a retirement system or pension fund 
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    for more
than adequate consideration.


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        (2) Lending of money or other extension of credit from 
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    the retirement
system or pension fund to a party in 
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    interest without the receipt of adequate
security and a 
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    reasonable rate of interest, or from a party in interest to

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    a retirement system or pension fund with the provision of 
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    excessive security
 or an unreasonably high rate of 
 


 






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    interest.


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        (3) Furnishing of goods, services or facilities from 
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    the retirement
system or pension fund to a party in 
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    interest for less than adequate
consideration, or from a 
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    party in interest to a retirement system or
pension fund 
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    for more than adequate consideration.


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        (4) Transfer to, or use by or for the benefit of, a 
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    party in interest
of any assets of a retirement system or 
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    pension fund for less than adequate
consideration.

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    (b) A fiduciary with respect to a retirement system or 
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pension fund
established under this Code shall not:


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        (1) Deal with the assets of the retirement system or 
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    pension fund in his
own interest or for his own account;


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        (2) In his individual or any other capacity act in any 
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    transaction
involving the retirement system or pension 
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    fund on behalf of a party whose
interests are adverse to 
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    the interests of the retirement system or pension fund
or 
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    the interests of its participants or beneficiaries; or


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        (3) Receive any consideration for his own personal 
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    account from any party
dealing with the retirement system 
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    or pension fund in connection with a
transaction involving 
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    the assets of the retirement system or pension
fund.

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    (c) Nothing in this Section shall be construed to prohibit 
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any trustee from:


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        (1) Receiving any benefit to which he may be entitled 
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    as a participant
or beneficiary in the retirement system or 
 


 






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    pension fund.


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        (2) Receiving any reimbursement of expenses properly 
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    and actually incurred
in the performance of his duties with 
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    the retirement system or pension fund.


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        (3) Serving as a trustee in addition to being an 
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    officer, employee, agent
or other representative of a party 
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    in interest.

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    (d) A  fiduciary of a pension fund established under Article 
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3 or 4 shall
not knowingly cause or advise the pension fund to 
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engage in an investment  transaction when the fiduciary (i) has 
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any direct interest in
the income, gains, or profits of the 
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investment adviser through which the investment transaction is 
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made or (ii) has a business relationship with that investment 
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adviser that would result in a pecuniary benefit to the 
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fiduciary as a result of the investment transaction.
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    Violation of this subsection (d) is a Class 4 felony.

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    (e) A board member, employee, or consultant with respect to 
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a retirement system, pension fund, or investment board subject 
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to this Code, except those whose investments are restricted by 
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Section 1-113.2, shall not knowingly cause or advise the 
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retirement system, pension fund, or investment board to engage 
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in an investment transaction with an investment adviser when 
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the board member, employee, consultant, or their spouse (i) has 
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any direct interest in the income, gains, or profits of the 
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investment adviser through which the investment transaction is 
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made or (ii) has a relationship with that investment adviser 
 


 






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that would result in a pecuniary benefit to the board member, 
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employee, or consultant or spouse of such board member, 
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employee, or consultant as a result of the investment 
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transaction. For purposes of this subsection (e), a consultant 
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includes an employee or agent of a consulting firm who has 
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greater than 7.5% ownership of the consulting firm.
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    Violation of this subsection (e) is a Class 4 felony.
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(Source: P.A. 95-950, eff. 8-29-08; 96-6, eff. 4-3-09.)