Full Text of HB2360 100th General Assembly
HB2360enr 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning employment.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Secure Choice Savings Program Act | 5 | | is amended by changing Sections 15, 30, 55, and 60 as follows: | 6 | | (820 ILCS 80/15)
| 7 | | Sec. 15. Illinois Secure Choice Savings Program Fund. | 8 | | (a) The Illinois Secure Choice Savings Program Fund is | 9 | | hereby established as a trust outside of the State treasury, | 10 | | with the Board created in Section 20 as its trustee. The Fund | 11 | | shall include the individual retirement accounts of enrollees, | 12 | | which shall be accounted for as individual accounts. Moneys in | 13 | | the Fund shall consist of moneys received from enrollees and | 14 | | participating employers pursuant to automatic payroll | 15 | | deductions and contributions to savings made under this Act. | 16 | | The Fund shall be operated in a manner determined by the Board, | 17 | | provided that the Fund is operated so that the accounts of | 18 | | enrollees established under the Program meet the requirements | 19 | | for IRAs under the Internal Revenue Code. | 20 | | (b) The amounts deposited in the Fund shall not constitute | 21 | | property of the State and the Fund shall not be construed to be | 22 | | a department, institution, or agency of the State. Amounts on | 23 | | deposit in the Fund shall not be commingled with State funds |
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| 1 | | and the State shall have no claim to or against, or interest | 2 | | in, such funds.
| 3 | | (c) The Illinois Secure Choice Savings Program Fund is an | 4 | | instrumentality of the State, and as such, is exempt from | 5 | | Sections 2a, 5, 6 and 7 of the Illinois Securities Law of 1953. | 6 | | (Source: P.A. 98-1150, eff. 6-1-15 .) | 7 | | (820 ILCS 80/30)
| 8 | | Sec. 30. Duties of the Board. In addition to the other | 9 | | duties and responsibilities stated in this Act, the Board | 10 | | shall: | 11 | | (a) Cause the Program to be designed, established and | 12 | | operated in a manner that: | 13 | | (1) accords with best practices for retirement savings | 14 | | vehicles; | 15 | | (2) maximizes participation, savings, and sound | 16 | | investment practices; | 17 | | (3) maximizes simplicity, including ease of | 18 | | administration for participating employers and enrollees; | 19 | | (4) provides an efficient product to enrollees by | 20 | | pooling investment funds; | 21 | | (5) ensures the portability of benefits; and | 22 | | (6) provides for the deaccumulation of enrollee assets | 23 | | in a manner that maximizes financial security in | 24 | | retirement. | 25 | | (b) Appoint a trustee to the IRA Fund in compliance with |
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| 1 | | Section 408 of the Internal Revenue Code. | 2 | | (c) Explore and establish investment options, subject to | 3 | | Section 45 of this Act, that offer employees returns on | 4 | | contributions and the conversion of individual retirement | 5 | | savings account balances to secure retirement income without | 6 | | incurring debt or liabilities to the State. | 7 | | (d) Establish the process by which interest, investment | 8 | | earnings, and investment losses are allocated to individual | 9 | | program accounts on a pro rata basis and are computed at the | 10 | | interest rate on the balance of an individual's account. | 11 | | (e) Make and enter into contracts necessary for the | 12 | | administration of the Program and Fund, including, but not | 13 | | limited to, retaining and contracting with investment | 14 | | managers, private financial institutions, other financial and | 15 | | service providers, consultants, actuaries, counsel, auditors, | 16 | | third-party administrators, and other professionals as | 17 | | necessary. | 18 | | (e-5) Conduct a review of the performance of any investment | 19 | | vendors every 4 years, including, but not limited to, a review | 20 | | of returns, fees, and customer service. A copy of reviews | 21 | | conducted under this subsection (e-5) shall be posted to the | 22 | | Board's Internet website. | 23 | | (f) Determine the number and duties of staff members needed | 24 | | to administer the Program and assemble such a staff, including, | 25 | | as needed, employing staff, appointing a Program | 26 | | administrator, and entering into contracts with the State |
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| 1 | | Treasurer to make employees of the State Treasurer's Office | 2 | | available to administer the Program. | 3 | | (g) Cause moneys in the Fund to be held and invested as | 4 | | pooled investments described in Section 45 of this Act, with a | 5 | | view to achieving cost savings through efficiencies and | 6 | | economies of scale. | 7 | | (h) Evaluate and establish the process by which an enrollee | 8 | | is able to contribute a portion of his or her wages to the | 9 | | Program for automatic deposit of those contributions and the | 10 | | process by which the participating employer provides a payroll | 11 | | deposit retirement savings arrangement to forward those | 12 | | contributions and related information to the Program, | 13 | | including, but not limited to, contracting with financial | 14 | | service companies and third-party administrators with the | 15 | | capability to receive and process employee information and | 16 | | contributions for payroll deposit retirement savings | 17 | | arrangements or similar arrangements. | 18 | | (i) Design and establish the process for enrollment under | 19 | | Section 60 of this Act, including the process by which an | 20 | | employee can opt not to participate in the Program, select a | 21 | | contribution level, select an investment option, and terminate | 22 | | participation in the Program. | 23 | | (j) Evaluate and establish the process by which an | 24 | | individual may voluntarily enroll in and make contributions to | 25 | | the Program. | 26 | | (k) Accept any grants, appropriations, or other moneys from |
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| 1 | | the State, any unit of federal, State, or local government, or | 2 | | any other person, firm, partnership, or corporation solely for | 3 | | deposit into the Fund, whether for investment or administrative | 4 | | purposes.
| 5 | | (l) Evaluate the need for, and procure as needed, insurance | 6 | | against any and all loss in connection with the property, | 7 | | assets, or activities of the Program, and indemnify as needed | 8 | | each member of the Board from personal loss or liability | 9 | | resulting from a member's action or inaction as a member of the | 10 | | Board. | 11 | | (m) Make provisions for the payment of administrative costs | 12 | | and expenses for the creation, management, and operation of the | 13 | | Program, including the costs associated with subsection (b) of | 14 | | Section 20 of this Act, subsections (e), (f), (h), and (l) of | 15 | | this Section, subsection (b) of Section 45 of this Act, | 16 | | subsection (a) of Section 80 of this Act, and subsection (n) of | 17 | | Section 85 of this Act. Subject to appropriation, the State may | 18 | | pay administrative costs associated with the creation and | 19 | | management of the Program until sufficient assets are available | 20 | | in the Fund for that purpose. Thereafter, all administrative | 21 | | costs of the Fund, including repayment of any start-up funds | 22 | | provided by the State, shall be paid only out of moneys on | 23 | | deposit therein. However, private funds or federal funding | 24 | | received under subsection (k) of Section 30 of this Act in | 25 | | order to implement the Program until the Fund is | 26 | | self-sustaining shall not be repaid unless those funds were |
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| 1 | | offered contingent upon the promise of such repayment. The | 2 | | Board shall keep total annual expenses as low as possible, but | 3 | | in no event shall they exceed 0.75% of the total trust balance. | 4 | | (n) Allocate administrative fees to individual retirement | 5 | | accounts in the Program on a pro rata basis. | 6 | | (o) Set minimum and maximum contribution levels in | 7 | | accordance with limits established for IRAs by the Internal | 8 | | Revenue Code. | 9 | | (o-5) Select a default contribution rate for Program | 10 | | participants within the range of 3% to 6% of an enrollee's | 11 | | wages. | 12 | | (p) Facilitate education and outreach to employers and | 13 | | employees. | 14 | | (q) Facilitate compliance by the Program with all | 15 | | applicable requirements for the Program under the Internal | 16 | | Revenue Code, including tax qualification requirements or any | 17 | | other applicable law and accounting requirements. | 18 | | (r) Carry out the duties and obligations of the Program in | 19 | | an effective, efficient, and low-cost manner. | 20 | | (s) Exercise any and all other powers reasonably necessary | 21 | | for the effectuation of the purposes, objectives, and | 22 | | provisions of this Act pertaining to the Program. | 23 | | (t) Deposit into the Illinois Secure Choice Administrative | 24 | | Fund all grants, gifts, donations, fees, and earnings from | 25 | | investments from the Illinois Secure Choice Savings Program | 26 | | Fund that are used to recover administrative costs. All |
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| 1 | | expenses of the Board shall be paid from the Illinois Secure | 2 | | Choice Administrative Fund.
| 3 | | (Source: P.A. 98-1150, eff. 6-1-15; 99-571, eff. 7-15-16.) | 4 | | (820 ILCS 80/55)
| 5 | | Sec. 55. Employer and employee information packets and | 6 | | disclosure forms.
| 7 | | (a) Prior to the opening of the Program for enrollment, the | 8 | | Board shall design and disseminate to all employers an employer | 9 | | information packet and an employee information packet, which | 10 | | shall include background information on the Program, | 11 | | appropriate disclosures for employees, and information | 12 | | regarding the vendor Internet website described in subsection | 13 | | (i) of Section 60 of this Act. | 14 | | (b) The Board shall provide for the contents of both the | 15 | | employee information packet and the employer information | 16 | | packet. | 17 | | (c) The employee information packet shall include a | 18 | | disclosure form. The disclosure form shall explain, but not be | 19 | | limited to, all of the following:
| 20 | | (1) the benefits and risks associated with making | 21 | | contributions to the Program; | 22 | | (2) the mechanics of how to make contributions to the | 23 | | Program;
| 24 | | (3) how to opt out of the Program;
| 25 | | (4) how to participate in the Program with a level of |
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| 1 | | employee contributions other than the default contribution | 2 | | rate 3% ;
| 3 | | (5) the process for withdrawal of retirement savings;
| 4 | | (6) how to obtain additional information about the | 5 | | Program;
| 6 | | (7) that employees seeking financial advice should | 7 | | contact financial advisors, that participating employers | 8 | | are not in a position to provide financial advice, and that | 9 | | participating employers are not liable for decisions | 10 | | employees make pursuant to this Act;
| 11 | | (8) that the Program is not an employer-sponsored | 12 | | retirement plan; and
| 13 | | (9) that the Program Fund is not guaranteed by the | 14 | | State.
| 15 | | (d) The employee information packet shall also include a | 16 | | form for an employee to note his or her decision to opt out of | 17 | | participation in the Program or elect to participate with a | 18 | | level of employee contributions other than the default | 19 | | contribution rate 3% .
| 20 | | (e) Participating employers shall supply the employee | 21 | | information packet to employees upon launch of the Program. | 22 | | Participating employers shall supply the employee information | 23 | | packet to new employees at the time of hiring, and new | 24 | | employees may opt out of participation in the Program or elect | 25 | | to participate with a level of employee contributions other | 26 | | than the default contribution rate 3% at that time.
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| 1 | | (Source: P.A. 98-1150, eff. 6-1-15 .) | 2 | | (820 ILCS 80/60)
| 3 | | Sec. 60. Program implementation and enrollment. Except as | 4 | | otherwise provided in Section 93 of this Act, the Program shall | 5 | | be implemented, and enrollment of employees shall begin in | 6 | | 2018 , within 24 months after the effective date of this Act . | 7 | | The Board shall establish an implementation timeline under | 8 | | which employers shall enroll their employees into the Program. | 9 | | The timeline shall include the date by which an employer must | 10 | | begin enrollment of its employees into the Program and the date | 11 | | by which enrollment must be complete. The Board shall adopt the | 12 | | implementation timeline at a public meeting of the Board and | 13 | | shall publicize the implementation timeline. The Board shall | 14 | | provide advance notice to employers of their enrollment date | 15 | | and the amount of time to complete enrollment. The Board's | 16 | | implementation timeline shall ensure that all employees are | 17 | | required to be enrolled into the Program by December 31, 2020. | 18 | | The provisions of this Section shall be in force after the | 19 | | Board opens the Program for enrollment. | 20 | | (a) Each employer shall establish a payroll deposit | 21 | | retirement savings arrangement to allow each employee to | 22 | | participate in the Program within the timeline set by at most | 23 | | nine months after the Board after opens the Program opens for | 24 | | enrollment. | 25 | | (b) Employers shall automatically enroll in the Program |
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| 1 | | each of their employees who has not opted out of participation | 2 | | in the Program using the form described in subsection (c) of | 3 | | Section 55 of this Act and shall provide payroll deduction | 4 | | retirement savings arrangements for such employees and | 5 | | deposit, on behalf of such employees, these funds into the | 6 | | Program. Small employers may, but are not required to, provide | 7 | | payroll deduction retirement savings arrangements for each | 8 | | employee who elects to participate in the Program. Small | 9 | | employers' use of automatic enrollment for employees is subject | 10 | | to final rules from the United States Department of Labor. | 11 | | Utilization of automatic enrollment by small employers may be | 12 | | allowed only if it does not create employer liability under the | 13 | | federal Employee Retirement Income Security Act. | 14 | | (c) Enrollees shall have the ability to select a | 15 | | contribution level into the Fund. This level may be expressed | 16 | | as a percentage of wages or as a dollar amount up to the | 17 | | deductible amount for the enrollee's taxable year under Section | 18 | | 219(b)(1)(A) of the Internal Revenue Code. Enrollees may change | 19 | | their contribution level at any time, subject to rules | 20 | | promulgated by the Board. If an enrollee fails to select a | 21 | | contribution level using the form described in subsection (c) | 22 | | of Section 55 of this Act, then he or she shall contribute the | 23 | | default contribution rate 3% of his or her wages to the | 24 | | Program, provided that such contributions shall not cause the | 25 | | enrollee's total contributions to IRAs for the year to exceed | 26 | | the deductible amount for the enrollee's taxable year under |
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| 1 | | Section 219(b)(1)(A) of the Internal Revenue Code. | 2 | | (d) Enrollees may select an investment option from the | 3 | | permitted investment options listed in Section 45 of this Act. | 4 | | Enrollees may change their investment option at any time, | 5 | | subject to rules promulgated by the Board. In the event that an | 6 | | enrollee fails to select an investment option, that enrollee | 7 | | shall be placed in the investment option selected by the Board | 8 | | as the default under subsection (c) of Section 45 of this Act. | 9 | | If the Board has not selected a default investment option under | 10 | | subsection (c) of Section 45 of this Act, then an enrollee who | 11 | | fails to select an investment option shall be placed in the | 12 | | life-cycle fund investment option. | 13 | | (e) Following initial implementation of the Program | 14 | | pursuant to this Section, at least once every year, | 15 | | participating employers shall designate an open enrollment | 16 | | period during which employees who previously opted out of the | 17 | | Program may enroll in the Program. | 18 | | (f) An employee who opts out of the Program who | 19 | | subsequently wants to participate through the participating | 20 | | employer's payroll deposit retirement savings arrangement may | 21 | | only enroll during the participating employer's designated | 22 | | open enrollment period or if permitted by the participating | 23 | | employer at an earlier time. | 24 | | (g) Employers shall retain the option at all times to set | 25 | | up any type of employer-sponsored retirement plan, such as a | 26 | | defined benefit plan or a 401(k), Simplified Employee Pension |
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| 1 | | (SEP) plan, or Savings Incentive Match Plan for Employees | 2 | | (SIMPLE) plan, or to offer an automatic enrollment payroll | 3 | | deduction IRA, instead of having a payroll deposit retirement | 4 | | savings arrangement to allow employee participation in the | 5 | | Program. | 6 | | (h) An employee may terminate his or her participation in | 7 | | the Program at any time in a manner prescribed by the Board. | 8 | | (i) The Board shall establish and maintain an Internet | 9 | | website designed to assist employers in identifying private | 10 | | sector providers of retirement arrangements that can be set up | 11 | | by the employer rather than allowing employee participation in | 12 | | the Program under this Act; however, the Board shall only | 13 | | establish and maintain an Internet website under this | 14 | | subsection if there is sufficient interest in such an Internet | 15 | | website by private sector providers and if the private sector | 16 | | providers furnish the funding necessary to establish and | 17 | | maintain the Internet website. The Board must provide public | 18 | | notice of the availability of and the process for inclusion on | 19 | | the Internet website before it becomes publicly available. This | 20 | | Internet website must be available to the public before the | 21 | | Board opens the Program for enrollment, and the Internet | 22 | | website address must be included on any Internet website | 23 | | posting or other materials regarding the Program offered to the | 24 | | public by the Board.
| 25 | | (Source: P.A. 98-1150, eff. 6-1-15; 99-571, eff. 7-15-16.)
| 26 | | Section 99. Effective date. This Act takes effect upon |
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| 1 | | becoming law.
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