Illinois General Assembly - Full Text of HB5411
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Full Text of HB5411  102nd General Assembly

HB5411 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5411

 

Introduced 1/31/2022, by Rep. Stephanie A. Kifowit

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/16-204
40 ILCS 5/16-207 new
30 ILCS 805/8.46 new

    Amends the Downstate Teacher Article of the Illinois Pension Code. Provides that a person who first becomes a member on or after January 1, 2023 shall have 3% of his or her pre-tax compensation contributed to a plan that is eligible under Section 457(b) of the Internal Revenue Code of 1986 offered by a vendor approved by his or her employer. Provides that to satisfy this requirement, the defined contribution benefit offered by the System may be adopted by the employer at the discretion of the employer. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement by the State. Effective immediately.


LRB102 25043 RPS 34302 b

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY

 

 

A BILL FOR

 

HB5411LRB102 25043 RPS 34302 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by
5changing Section 16-204 and by adding Section 16-207 as
6follows:
 
7    (40 ILCS 5/16-204)
8    Sec. 16-204. Optional defined contribution benefit. As
9soon as practicable after the effective date of this
10amendatory Act of the 100th General Assembly, the System shall
11offer a defined contribution benefit to active members of the
12System. The defined contribution benefit shall be an optional
13benefit to any member who chooses to participate. The defined
14contribution benefit shall collect optional employee and
15optional employer contributions into an account and shall
16offer investment options to the participant. The benefit under
17this Section shall be operated in full compliance with any
18applicable State and federal laws, and the System shall
19utilize generally accepted practices in creating and
20maintaining the benefit for the best interest of the
21participants. The System may use funds from the employee and
22employer contributions to defray any and all costs of creating
23and maintaining the benefit. In addition, the System may use

 

 

HB5411- 2 -LRB102 25043 RPS 34302 b

1funds provided under Section 16-158 of this Code to defray any
2and all costs of creating and maintaining the benefit and then
3shall reimburse those costs from funds received from the
4employee and employer contributions under this Section. All
5employers must comply with the reporting and administrative
6functions established by the System and are required to
7implement the benefits established under this Section. The
8System shall produce an annual report on the participation in
9the benefit and shall make the report public.
10    Except as otherwise provided in Section 16-207, as As soon
11as is practicable on or after January 1, 2022, the System shall
12automatically enroll any employee who first becomes an active
13member or participant in the System. A member automatically
14enrolled under this Section shall have 3% of his or her pre-tax
15gross compensation for each compensation period deferred into
16his or her deferred compensation account, unless the member
17otherwise instructs the System on forms approved by the
18System. A member may elect, in a manner provided for by the
19System, to not participate in the defined contribution benefit
20or to increase or reduce the amount of pre-tax gross
21compensation contributed, consistent with State or federal
22law. A member shall be automatically enrolled in the benefit
23beginning the first day of the pay period following the
24member's 30th day of employment. A member who has been
25automatically enrolled in the benefit may elect, within 90
26days of enrollment, to withdraw from the benefit and receive a

 

 

HB5411- 3 -LRB102 25043 RPS 34302 b

1refund of amounts deferred, plus or minus any applicable
2earnings, investment fees, and administrative fees. Any
3refunded amount shall be included in the member's gross income
4for the taxable year in which the refund is issued.
5    On or after January 1, 2023, the System may elect to
6increase the automatic annual contributions under this
7Section. The increase in the rate of contribution, however,
8shall not exceed 2% of a member's pre-tax gross compensation
9per year, and at no time shall any total contribution exceed
10any contribution limits established by State or federal law.
11(Source: P.A. 102-540, eff. 8-20-21.)
 
12    (40 ILCS 5/16-207 new)
13    Sec. 16-207. Contributions to other defined contribution
14plans. A person who first becomes a member on or after January
151, 2023 shall have 3% of his or her pre-tax compensation
16contributed to a plan that is eligible under Section 457(b) of
17the Internal Revenue Code of 1986, as amended, offered by a
18vendor approved by his or her employer. To satisfy the
19requirement under this Section, the defined contribution
20benefit under Section 16-204 may be adopted by the employer at
21the discretion of the employer.
 
22    Section 90. The State Mandates Act is amended by adding
23Section 8.46 as follows:
 

 

 

HB5411- 4 -LRB102 25043 RPS 34302 b

1    (30 ILCS 805/8.46 new)
2    Sec. 8.46. Exempt mandate. Notwithstanding Sections 6 and
38 of this Act, no reimbursement by the State is required for
4the implementation of any mandate created by this amendatory
5Act of the 102nd General Assembly.
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.