093_HB3693

 
                                     LRB093 08333 LRD 08552 b

 1        AN ACT in relation to 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  Pension  Code  is amended by
 5    changing Section 1-113.2 as follows:

 6        (40 ILCS 5/1-113.2)
 7        Sec. 1-113.2.  List  of  permitted  investments  for  all
 8    Article  3  or 4 pension funds.  Any pension fund established
 9    under Article 3 or 4 may invest in the following items:
10        (1)  Interest bearing direct obligations  of  the  United
11    States of America.
12        (2)  Interest bearing obligations to the extent that they
13    are  fully  guaranteed  or insured as to payment of principal
14    and interest by the United States of America.
15        (3)  Interest bearing bonds, notes, debentures, or  other
16    similar  obligations  of  agencies  of  the  United States of
17    America.  For the purposes of this Section, "agencies of  the
18    United  States of America" includes: (i) the Federal National
19    Mortgage  Association  and   the   Student   Loan   Marketing
20    Association;  (ii)  federal  land banks, federal intermediate
21    credit banks, federal farm credit banks, and any other entity
22    authorized to issue direct debt  obligations  of  the  United
23    States  of  America  under  the  Farm  Credit  Act of 1971 or
24    amendments to that Act; (iii) federal home loan banks and the
25    Federal Home Loan Mortgage Corporation; and (iv)  any  agency
26    created by Act of Congress that is authorized to issue direct
27    debt obligations of the United States of America.
28        (4)  Interest bearing savings accounts or certificates of
29    deposit,  issued  by federally chartered banks or savings and
30    loan associations,  to  the  extent  that  the  deposits  are
31    insured  by  agencies  or  instrumentalities  of  the federal
 
                            -2-      LRB093 08333 LRD 08552 b
 1    government.
 2        (5)  Interest bearing savings accounts or certificates of
 3    deposit, issued by  State  of  Illinois  chartered  banks  or
 4    savings  and  loan  associations,  to  the  extent  that  the
 5    deposits  are insured by agencies or instrumentalities of the
 6    federal government.
 7        (6)  Investments in credit unions, to the extent that the
 8    investments are insured by agencies or  instrumentalities  of
 9    the federal government.
10        (7)  Interest bearing bonds of the State of Illinois.
11        (8)  Pooled  interest  bearing  accounts  managed  by the
12    Illinois Public Treasurer's  Investment  Pool  in  accordance
13    with  the  Deposit  of  State Moneys Act and interest bearing
14    funds or pooled accounts managed, operated, and  administered
15    by  banks,  subsidiaries  of  banks,  or subsidiaries of bank
16    holding companies in accordance with the laws of the State of
17    Illinois.
18        (9)  Interest bearing bonds or tax anticipation  warrants
19    of  any  county,  township,  or  municipal corporation of the
20    State of Illinois.
21        (10)  Direct obligations of the State of Israel,  subject
22    to  the  conditions  and limitations of item (5.1) of Section
23    1-113.
24        (11)  Money market mutual  funds  managed  by  investment
25    companies  that  are  registered under the federal Investment
26    Company Act of 1940 and the Illinois Securities Law  of  1953
27    and   are   diversified,   open-ended  management  investment
28    companies; provided that the portfolio of  the  money  market
29    mutual fund is limited to the following:
30             (i)  bonds,  notes,  certificates  of  indebtedness,
31        treasury  bills,  or other securities that are guaranteed
32        by the full faith and credit  of  the  United  States  of
33        America as to principal and interest;
34             (ii)  bonds,  notes,  debentures,  or  other similar
 
                            -3-      LRB093 08333 LRD 08552 b
 1        obligations of  the  United  States  of  America  or  its
 2        agencies; and
 3             (iii)  short   term   obligations   of  corporations
 4        organized in the  United  States  with  assets  exceeding
 5        $400,000,000, provided that (A) the obligations mature no
 6        later than 180 days from the date of purchase, (B) at the
 7        time of purchase, the obligations are rated by at least 2
 8        standard  national  rating  services  at  one  of their 3
 9        highest classifications, and (C) the obligations held  by
10        the  mutual  fund  do not exceed 10% of the corporation's
11        outstanding obligations.
12        (12)  General  accounts  of  life   insurance   companies
13    authorized to transact business in Illinois.
14        (13)  Any combination of the following, not to exceed 10%
15    of the pension fund's net assets:
16             (i)  separate  accounts  that  are  managed  by life
17        insurance companies authorized to  transact  business  in
18        Illinois  and  are  comprised  of  diversified portfolios
19        consisting of common or preferred stocks, bonds, or money
20        market instruments;
21             (ii)  separate  accounts   that   are   managed   by
22        insurance  companies  authorized  to transact business in
23        Illinois, and are comprised of real estate or loans  upon
24        real estate secured by first or second mortgages; and
25             (iii)  mutual  funds  or  exchange-traded funds that
26        meet the following requirements:
27                  (A)  the mutual fund or exchange-traded fund is
28             managed by an  investment  company  as  defined  and
29             registered  under the federal Investment Company Act
30             of 1940 and registered under the Illinois Securities
31             Law of 1953;
32                  (B)  the mutual fund  or  exchange-traded  fund
33             has been in operation for at least 5 years;
34                  (C)  the  mutual  fund  or exchange-traded fund
 
                            -4-      LRB093 08333 LRD 08552 b
 1             has total net assets of $250 million or more; and
 2                  (D)  the mutual fund or exchange-traded fund is
 3             comprised of diversified  portfolios  of  common  or
 4             preferred    stocks,    bonds,   or   money   market
 5             instruments.
 6        (14)  Any fund that has appointed an  investment  advisor
 7    under  Section  1-113.5 may, through that investment advisor,
 8    invest a  portion  of  its  assets  in  debt  obligations  of
 9    corporations created or existing under the laws of the United
10    States  or  any  state, district, or territory thereof if (i)
11    the corporation has been in existence for at least  5  years,
12    (ii)  the  obligations are rated investment grade at the time
13    of purchase by at least 2  standard  rating  services,  (iii)
14    such  purchases  do  not  exceed  10%  of  the  corporation's
15    outstanding  obligations, and (iv) the security issue size is
16    at least $50,000,000.  No more than 30% of the pension fund's
17    assets may be invested in debt obligations of corporations.
18    (Source: P.A. 90-507, eff. 8-22-97; 91-887, eff. 7-6-00.)

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