Full Text of SB1844 97th General Assembly
SB1844sam001 97TH GENERAL ASSEMBLY | Sen. Iris Y. Martinez Filed: 3/2/2012
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| 1 | | AMENDMENT TO SENATE BILL 1844
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1844 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Illinois Automatic IRA Program Act. | 6 | | Section 5. Definitions. As used in this Act, unless the | 7 | | context requires a different meaning: | 8 | | "Compensation" means remuneration paid to a participant | 9 | | for services rendered to his or her employer. | 10 | | "Employee" means any individual who performs or performed | 11 | | any service on behalf of a business operating in the State of | 12 | | Illinois. | 13 | | "Employer" means any business operating in the State of | 14 | | Illinois for whom an individual performs or performed any | 15 | | service as an employee. | 16 | | "Enrollee" means any employee who is enrolled in the |
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| 1 | | Program. | 2 | | "Fund" means the Illinois Automatic IRA Program Fund. | 3 | | "IRA" means an individual retirement account under Section | 4 | | 408 of the Internal Revenue Code. | 5 | | "Participating employer" means any qualified small | 6 | | employer with employees that are enrolled in the Program. | 7 | | "Program" means the Illinois Automatic IRA Program. | 8 | | "Qualified small employer" means an employer located in the | 9 | | State of Illinois that (i) employed at least 10, but fewer than | 10 | | 100, employees during the previous calendar year, (ii) has been | 11 | | in business for a period of at least 2 years after the | 12 | | enactment of this Act, (iii) did not offer a qualified | 13 | | retirement plan, including, but not limited to, a plan | 14 | | qualified under Section 401(a), Section 401(k), Section | 15 | | 403(a), Section 403(b), Section 408(k), Section 408(p), or | 16 | | Section 457(b) of the Internal Revenue Code for the 2 years | 17 | | prior to the effective date of this Act. | 18 | | Section 10. Establishment of Illinois Automatic IRA | 19 | | Program. There is hereby established a retirement savings | 20 | | program known as the Illinois Automatic IRA Program to be | 21 | | administered by the State Treasurer with the intent of | 22 | | promoting greater retirement savings for private sector | 23 | | employees in a convenient, low-cost, and portable manner. | 24 | | Section 15. Illinois Automatic IRA Program Fund. |
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| 1 | | (a) There is established the Illinois Automatic IRA Program | 2 | | Fund to finance the program created by this Act. The assets of | 3 | | the Fund shall be administered by the State Treasurer's office | 4 | | as trust funds and shall be used exclusively for the purposes | 5 | | of administering the Program, including the design and | 6 | | qualification of the Program, supporting the administrative | 7 | | cost of establishing the Program and providing information | 8 | | about the Program. | 9 | | (b) The Fund shall include the individual accounts of | 10 | | enrollees, which shall be accounted for as individual accounts. | 11 | | (c) Moneys in the Fund shall consist of moneys received | 12 | | from enrollees and participating employers pursuant to | 13 | | automatic payroll deductions and contributions to savings made | 14 | | under this Act, grants from the United States government and | 15 | | its agencies and instrumentalities, and any other available | 16 | | sources of funds, public or private. Interest and income earned | 17 | | from the investment of such funds shall remain in the Fund and | 18 | | be credited to it. | 19 | | Section 20. Operation of Program. | 20 | | (a) The Program shall be administered by the State | 21 | | Treasurer, or his or her designee, and prior to accepting any | 22 | | enrollees or funds the State Treasurer shall design a plan of | 23 | | operation for the Program, which plan of operation shall be | 24 | | approved by the Internal Revenue Service to offer the Program | 25 | | to enrollees on a tax-qualified basis. The Program shall |
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| 1 | | include an option for enrollees to roll pre-tax contributions | 2 | | into an individual retirement account or other eligible | 3 | | retirement plan after ceasing participation in the Program. | 4 | | (b) In designing the plan of operation for the Program, the | 5 | | State Treasurer shall consult with employers, workers, private | 6 | | sector retirement plan administrators and providers, and any | 7 | | other persons that the State Treasurer determines relevant to | 8 | | the development of an effective and efficient method of | 9 | | operating the Program. | 10 | | (c) The plan of operation for the Program shall include, at | 11 | | a minimum, the following elements: | 12 | | (1) a payroll deduction IRA arrangement for employees | 13 | | of qualified small employers wherein a qualified small | 14 | | employer shall deduct a contribution amount from each | 15 | | enrolled employee's salary and deposit it into the Fund; | 16 | | (2) the ability for each enrolled employee to | 17 | | periodically elect to contribute up to a set percentage of | 18 | | his or her compensation or a dollar amount to the Fund; | 19 | | provided, however, if an election is not made, the | 20 | | qualified small employer shall deduct a default | 21 | | contribution amount of 2% of an enrolled employee's salary | 22 | | on behalf of the employee; | 23 | | (3) the ability for each enrolled employee to direct | 24 | | the investment of such enrollee's contribution and be | 25 | | entitled to make investment choices within available | 26 | | categories of investments provided through the Program; |
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| 1 | | provided, however, that if an enrollee does not select an | 2 | | investment option then the Program administrator shall | 3 | | select a default investment option on behalf of the | 4 | | employee; | 5 | | (4) notwithstanding any other provision of this Act, | 6 | | the ability of each enrolled employee to, at any time and | 7 | | from time to time, opt-out of the Program, change the | 8 | | percentage of his or her contribution amount or investment | 9 | | choice, or any combination thereof; | 10 | | (5) the ability for the State Treasurer to enter into | 11 | | an administrative service arrangement that will allow | 12 | | participating employers to achieve economies of scale for | 13 | | pension or retirement savings arrangements relating to | 14 | | accounting, investment, payroll processing employee | 15 | | communication, or investor education; | 16 | | (6) the ability for the State Treasurer to contract, | 17 | | after an open bid process, with a third-party administrator | 18 | | for the management of the Fund and any other assets of the | 19 | | Program and whose fees shall be reasonable and shall be | 20 | | paid from the Fund and the Program's assets; | 21 | | (7) a requirement that each retirement plan or account | 22 | | shall pay a proportionate share of the expenses incurred to | 23 | | implement, maintain, and administer the Program; and | 24 | | (8) a provision that the State Treasurer, his or her | 25 | | designee, any other employees or agents of the Program, or | 26 | | any investment manager shall not have any liability with |
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| 1 | | respect to investment returns under any retirement plan. | 2 | | Section 25. Duties and authority of State Treasurer. The | 3 | | State Treasurer shall have the authority and responsibility to | 4 | | carry out the following duties: | 5 | | (1) administer the Fund and the Program, including the | 6 | | authority to invest moneys in the Fund in any instruments, | 7 | | obligations, securities, or property deemed appropriate by | 8 | | the State Treasurer; | 9 | | (2) apply for, accept, and expend gifts, grants, or | 10 | | other donations from public or private sources to enable it | 11 | | to carry out the objectives of the Program; | 12 | | (3) enter into contractual agreements, including | 13 | | contracts for legal, actuarial, financial and consulting | 14 | | services; | 15 | | (4) develop strategies to inform the public of the | 16 | | availability and desirability of the Program, including | 17 | | education about the need to accumulate financial resources | 18 | | for retirement, available options for financing | 19 | | retirement, and basic information about investing | 20 | | strategies; and | 21 | | (5) engage in such other activities are necessary to | 22 | | implement and administer the Program. | 23 | | Section 30. Duties of qualified small employers. Qualified | 24 | | small employers shall automatically enroll their employees in |
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| 1 | | the Program and provide payroll deductions for such employees. | 2 | | Section 35. Regulations. The State Treasurer shall adopt | 3 | | such regulations and procedures as may be necessary to | 4 | | implement the Program. As part of the regulation development | 5 | | process, the State Treasurer shall consult with employers, | 6 | | workers, private sector retirement plan administrators and | 7 | | providers, and any other individuals or entities that it | 8 | | determines relevant to the development of an effective and | 9 | | efficient method for operating the Program. Regulations shall | 10 | | be adopted, including, at a minimum, requirements of | 11 | | enrollment, contribution and investment requirements, as | 12 | | necessary to implement and administer the Program. | 13 | | Section 40. Liability. Neither the State of Illinois nor | 14 | | any State board, commission, or agency, or any officer, | 15 | | employee, or member of the same shall be liable for any loss or | 16 | | deficiency resulting from investment selected by an enrollee. | 17 | | An employer shall not be liable for any loss or deficiency | 18 | | resulting from making default payroll deductions or default | 19 | | investment decisions on behalf of an employee. | 20 | | Section 45. Audits and reports. The accounts and records of | 21 | | the State Treasurer showing the receipt and disbursement of | 22 | | funds, from whatever source derived, in connection with the | 23 | | Program be available for audit on as frequent a basis as |
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| 1 | | prescribed by regulations enacted under this Act. The State | 2 | | Treasurer shall issue an annual report on the status of the | 3 | | Program prior to December 1 of each year.
| 4 | | Section 99. Effective date. This Act takes effect upon | 5 | | becoming law.".
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