Full Text of SB2103 102nd General Assembly
SB2103enr 102ND GENERAL ASSEMBLY |
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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 Pension Code is amended by | 5 | | changing Sections 15-202, 16-204, and 24-102 as follows: | 6 | | (40 ILCS 5/15-202) | 7 | | Sec. 15-202. Optional deferred compensation plan defined | 8 | | contribution benefit . | 9 | | (a) As soon as practicable after August 10, 2018 ( the | 10 | | effective date of Public Act 100-769) this amendatory Act of | 11 | | the 100th General Assembly , the System shall offer a deferred | 12 | | compensation plan that is eligible under Section 457(b) of the | 13 | | Internal Revenue Code of 1986, as amended, defined | 14 | | contribution benefit to participating employees active members | 15 | | of the System employed by employers described in Section | 16 | | 15-106 of this Code that qualify as eligible employers under | 17 | | Section 457(e)(1)(A) of the Internal Revenue Code of 1986, as | 18 | | amended . Such eligible employers shall adopt the plan with an | 19 | | effective date no later than September 1, 2021. Participating | 20 | | employees may voluntarily elect to make elective deferrals to | 21 | | the eligible deferred compensation plan. Eligible employers | 22 | | may make optional employer contributions to the plan on behalf | 23 | | of participating employees, which contributions may be |
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| 1 | | maintained, increased, reduced, or eliminated at the | 2 | | discretion of the employer from plan year to plan year. The | 3 | | defined contribution benefit shall be an optional benefit to | 4 | | any member who chooses to participate. The plan defined | 5 | | contribution benefit shall collect voluntary optional employee | 6 | | and optional employer contributions into an account for each | 7 | | participant and shall offer investment options to the | 8 | | participant. The plan benefit under this Section shall be | 9 | | operated in full compliance with any applicable State and | 10 | | federal laws, and the System shall utilize generally accepted | 11 | | practices in creating and maintaining the plan benefit for the | 12 | | best interest of the participants. The System may use funds | 13 | | from the employee and employer contributions to defray any and | 14 | | all costs of creating and maintaining the plan benefit . The | 15 | | System shall produce an annual report on the participation in | 16 | | the plan benefit and shall make the report public.
| 17 | | (b) The System shall automatically enroll in the eligible | 18 | | deferred compensation plan any employee of an eligible | 19 | | employer who first becomes a participating employee of the | 20 | | System on or after July 1, 2023 under an eligible automatic | 21 | | contribution arrangement that is subject to Section 414(w) of | 22 | | the Internal Revenue Code of 1986, as amended, and the United | 23 | | States Department of Treasury regulations promulgated | 24 | | thereunder. An employee who is automatically enrolled under | 25 | | this subsection (b) shall have 3% of his or her compensation, | 26 | | as defined by the plan, for each pay period deferred on a |
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| 1 | | pre-tax basis into his or her account, subject to any | 2 | | contribution limits applicable to the plan. The Board may | 3 | | increase the default percentage of compensation deferred under | 4 | | this subsection (b). | 5 | | An employee shall have 30 days from the date on which the | 6 | | System provides the notice required under Section 414(w) of | 7 | | the Internal Revenue Code of 1986, as amended, to elect to not | 8 | | participate in the eligible deferred compensation plan or to | 9 | | elect to increase or reduce the initial amount of elective | 10 | | deferrals made to the plan. In the absence of such affirmative | 11 | | election, the employee shall be automatically enrolled in the | 12 | | plan on the first day of the calendar month, or as soon as | 13 | | administratively practicable thereafter, following the 30th | 14 | | day from the date on which the System provides the required | 15 | | notice. An employee who has been automatically enrolled in the | 16 | | plan under this subsection (b) may elect, within 90 days of | 17 | | enrollment, to withdraw from the plan and receive a refund of | 18 | | amounts deferred, adjusted by applicable earnings and fees. An | 19 | | employee making such an election shall forfeit all employer | 20 | | matching contributions, if any, made with respect to such | 21 | | refunded elective deferrals and such forfeited amounts shall | 22 | | be used to defray plan expenses. Any refunded elective | 23 | | deferrals shall be included in the employee's gross income for | 24 | | the taxable year in which the refund is issued. | 25 | | (c) The System may provide for one or more automatic | 26 | | contribution arrangements, which shall comply with all |
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| 1 | | applicable Internal Revenue Service rules and regulations, in | 2 | | conjunction with or in lieu of the eligible automatic | 3 | | contribution arrangement under subsection (b), for | 4 | | participating employees of eligible employers whose annual | 5 | | earnings are limited by application of subsection (b) of | 6 | | Section 15-111 of this Code. The amount of elective deferrals | 7 | | made for the employee each pay period under an automatic | 8 | | contribution arrangement shall equal the default percentage | 9 | | specified by resolution of the Board multiplied by the | 10 | | employee's compensation as defined by the plan, subject to any | 11 | | contribution limits applicable to the plan, and shall be made | 12 | | on a pre-tax basis. An employee subject to this subsection (c) | 13 | | shall have 30 days from the date on which the System provides | 14 | | written notice to the employee to elect to not participate in | 15 | | the eligible deferred compensation plan or to elect to | 16 | | increase or reduce the amount of initial elective deferrals | 17 | | made to the plan. In the absence of such affirmative election, | 18 | | the employee shall be automatically enrolled in the plan | 19 | | beginning the first day of the calendar month, or as soon as | 20 | | administratively practicable thereafter, following the 30th | 21 | | day from the date on which the System provides the required | 22 | | notice. | 23 | | (d) The System may provide that the default percentage for | 24 | | any employee automatically enrolled in the eligible deferred | 25 | | compensation plan under subsection (b) or (c) be increased by | 26 | | a specified percentage each plan year after the plan year in |
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| 1 | | which the employee is automatically enrolled in the plan. The | 2 | | amount of automatic annual increases in any plan year shall | 3 | | not exceed 1% of compensation as defined by the plan. | 4 | | (e) The changes made to this Section by this amendatory | 5 | | Act of the 102nd General Assembly are corrections of existing | 6 | | law and are intended to be retroactive to the effective date of | 7 | | Public Act 100-769, notwithstanding Section 1-103.1 of this | 8 | | Code. | 9 | | (Source: P.A. 100-769, eff. 8-10-18.) | 10 | | (40 ILCS 5/16-204) | 11 | | Sec. 16-204. Optional defined contribution benefit. As | 12 | | soon as practicable after the effective date of this | 13 | | amendatory Act of the 100th General Assembly, the System shall | 14 | | offer a defined contribution benefit to active members of the | 15 | | System. The defined contribution benefit shall be an optional | 16 | | benefit to any member who chooses to participate. The defined | 17 | | contribution benefit shall collect optional employee and | 18 | | optional employer contributions into an account and shall | 19 | | offer investment options to the participant. The benefit under | 20 | | this Section shall be operated in full compliance with any | 21 | | applicable State and federal laws, and the System shall | 22 | | utilize generally accepted practices in creating and | 23 | | maintaining the benefit for the best interest of the | 24 | | participants. The System may use funds from the employee and | 25 | | employer contributions to defray any and all costs of creating |
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| 1 | | and maintaining the benefit. In addition, the System may use | 2 | | funds provided under Section 16-158 of this Code to defray any | 3 | | and all costs of creating and maintaining the benefit and then | 4 | | shall reimburse those costs from funds received from the | 5 | | employee and employer contributions under this Section. All | 6 | | employers must comply with the reporting and administrative | 7 | | functions established by the System and are required to | 8 | | implement the benefits established under this Section. The | 9 | | System shall produce an annual report on the participation in | 10 | | the benefit and shall make the report public.
| 11 | | As soon as is practicable on or after January 1, 2022, the | 12 | | System shall automatically enroll any employee who first | 13 | | becomes an active member or participant in the System. A | 14 | | member automatically enrolled under this Section shall have 3% | 15 | | of his or her pre-tax gross compensation for each compensation | 16 | | period deferred into his or her deferred compensation account, | 17 | | unless the member otherwise instructs the System on forms | 18 | | approved by the System. A member may elect, in a manner | 19 | | provided for by the System, to not participate in the defined | 20 | | contribution benefit or to increase or reduce the amount of | 21 | | pre-tax gross compensation contributed, consistent with State | 22 | | or federal law. A member shall be automatically enrolled in | 23 | | the benefit beginning the first day of the pay period | 24 | | following the member's 30th day of employment. A member who | 25 | | has been automatically enrolled in the benefit may elect, | 26 | | within 90 days of enrollment, to withdraw from the benefit and |
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| 1 | | receive a refund of amounts deferred, plus or minus any | 2 | | applicable earnings, investment fees, and administrative fees. | 3 | | Any refunded amount shall be included in the member's gross | 4 | | income for the taxable year in which the refund is issued. | 5 | | On or after January 1, 2023, the System may elect to | 6 | | increase the automatic annual contributions under this | 7 | | Section. The increase in the rate of contribution, however, | 8 | | shall not exceed 2% of a member's pre-tax gross compensation | 9 | | per year, and at no time shall any total contribution exceed | 10 | | any contribution limits established by State or federal law. | 11 | | (Source: P.A. 100-769, eff. 8-10-18.)
| 12 | | (40 ILCS 5/24-102) (from Ch. 108 1/2, par. 24-102)
| 13 | | Sec. 24-102.
As used in this Article, "employee" means any | 14 | | person,
including a person elected, appointed or under | 15 | | contract, receiving
compensation from the State or a unit of | 16 | | local government or school
district for personal services | 17 | | rendered, including salaried persons. However, "employee", for | 18 | | the purposes of the State Employees Deferred Compensation Plan | 19 | | established under Section 24-104, does not include a person | 20 | | employed by an employer under Section 15-106 who first becomes | 21 | | a participant of the retirement system under Article 15 on or | 22 | | after July 1, 2023 unless the person has made an election to | 23 | | defer compensation into the State Employees Deferred | 24 | | Compensation Plan under a written agreement and the deferral | 25 | | election is in effect as of June 30, 2023. A health care |
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| 1 | | provider who elects to participate in the State Employees | 2 | | Deferred Compensation Plan established under Section 24-104 of | 3 | | this Code shall, for purposes of that participation, be deemed | 4 | | an "employee" as defined in this Section.
| 5 | | As used in this Article, "health care provider" means a | 6 | | dentist, physician, optometrist, pharmacist, or podiatric | 7 | | physician that participates and receives compensation as a | 8 | | provider under the Illinois Public Aid Code, the Children's | 9 | | Health Insurance Act, or the Covering ALL KIDS Health | 10 | | Insurance Act. | 11 | | As used in this Article, "compensation" includes | 12 | | compensation received
in a lump sum for accumulated unused | 13 | | vacation, personal leave or sick leave, with the exception of | 14 | | health care providers. "Compensation" with respect to health | 15 | | care providers is defined under the Illinois Public Aid Code, | 16 | | the Children's Health Insurance Act, or the Covering ALL KIDS | 17 | | Health Insurance Act.
| 18 | | Where applicable, in no event shall the total of the | 19 | | amount of deferred compensation of an
employee set aside in | 20 | | relation to a particular year under the Illinois
State | 21 | | Employees Deferred Compensation Plan and the employee's
| 22 | | nondeferred compensation for that year exceed the total annual | 23 | | salary or
compensation under the existing salary schedule or | 24 | | classification plan
applicable to such employee in such year; | 25 | | except that any compensation
received in a lump sum for | 26 | | accumulated unused vacation, personal leave or sick
leave |
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| 1 | | shall not be included in the calculation of such totals.
| 2 | | (Source: P.A. 98-214, eff. 8-9-13.)
| 3 | | Section 90. The State Mandates Act is amended by adding | 4 | | Section 8.45 as follows: | 5 | | (30 ILCS 805/8.45 new) | 6 | | Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and | 7 | | 8 of this Act, no reimbursement by the State is required for | 8 | | the implementation of any mandate created by this amendatory | 9 | | Act of the 102nd General Assembly.
| 10 | | Section 99. Effective date. This Act takes effect upon | 11 | | becoming law.
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