Full Text of HB4891 95th General Assembly
HB4891 95TH GENERAL ASSEMBLY
|
|
|
95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB4891
Introduced , by Rep. Lisa M. Dugan SYNOPSIS AS INTRODUCED: |
|
40 ILCS 5/1-113 |
from Ch. 108 1/2, par. 1-113 |
40 ILCS 5/1-113.1 |
|
40 ILCS 5/1-113.2 |
|
40 ILCS 5/1-113.3 |
|
40 ILCS 5/1-113.4 |
|
40 ILCS 5/1-113.5 |
|
40 ILCS 5/1-113.8 |
|
40 ILCS 5/1-113.12 |
|
30 ILCS 805/8.32 new |
|
|
Amends the Illinois Pension Code. Gives downstate firefighter pension funds the same investment authority as all of the other retirement systems and pension funds (excluding downstate police pension funds) under the Code. Removes references to downstate firefighter pension funds in various provisions regarding investment authority that were formerly applicable only to downstate police and downstate firefighter pension funds. Requires the board of trustees of a downstate firefighter pension fund to appoint investment advisers (was discretionary). Amends the State Mandates Act to require implementation without reimbursement.
|
| |
|
|
FISCAL NOTE ACT MAY APPLY |
PENSION IMPACT NOTE ACT MAY APPLY |
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT |
|
|
A BILL FOR
|
|
|
|
|
HB4891 |
|
LRB095 18353 AMC 44438 b |
|
| 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 changing | 5 |
| Sections 1-113, 1-113.1, 1-113.2, 1-113.3, 1-113.4, 1-113.5, | 6 |
| 1-113.8, and 1-113.12 as follows:
| 7 |
| (40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113)
| 8 |
| Sec. 1-113. Investment authority of certain pension funds, | 9 |
| not including
those established under Article 3 or 4 . The | 10 |
| investment authority of a board
of trustees of a retirement | 11 |
| system or pension fund established under this
Code shall, if so | 12 |
| provided in the Article establishing such retirement system
or | 13 |
| pension fund, embrace the following investments:
| 14 |
| (1) Bonds, notes and other direct obligations of the United | 15 |
| States
Government; bonds, notes and other obligations of any | 16 |
| United States
Government agency or instrumentality, whether or | 17 |
| not guaranteed; and
obligations the principal and interest of | 18 |
| which are guaranteed
unconditionally by the United States | 19 |
| Government or by an agency or
instrumentality thereof.
| 20 |
| (2) Obligations of the Inter-American Development Bank, | 21 |
| the
International Bank for Reconstruction and Development, the | 22 |
| African
Development Bank, the International Finance | 23 |
| Corporation, and the Asian
Development Bank.
|
|
|
|
HB4891 |
- 2 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (3) Obligations of any state, or of any political | 2 |
| subdivision in
Illinois, or of any county or city in any other | 3 |
| state having a
population as shown by the last federal census | 4 |
| of not less than 30,000
inhabitants provided that such | 5 |
| political subdivision is not permitted by
law to become | 6 |
| indebted in excess of 10% of the assessed valuation of
property | 7 |
| therein and has not defaulted for a period longer than 30 days
| 8 |
| in the payment of interest and principal on any of its general
| 9 |
| obligations or indebtedness during a period of 10 calendar | 10 |
| years
immediately preceding such investment.
| 11 |
| (4) Nonconvertible bonds, debentures, notes and other | 12 |
| corporate
obligations of any corporation created or existing | 13 |
| under the laws of the
United States or any state, district or | 14 |
| territory thereof, provided
there has been no default on the | 15 |
| obligations of the corporation or its
predecessor(s) during the | 16 |
| 5 calendar years immediately preceding the
purchase. Up to 5% | 17 |
| of the assets of
a pension fund established under Article 9 of | 18 |
| this Code may be
invested in nonconvertible bonds, debentures, | 19 |
| notes, and other corporate
obligations of corporations created | 20 |
| or existing under the laws of a foreign
country, provided there | 21 |
| has been no default on the obligations of the
corporation or | 22 |
| its predecessors during the 5 calendar years immediately
| 23 |
| preceding the date of purchase.
| 24 |
| (5) Obligations guaranteed by the Government of Canada, or | 25 |
| by any
Province of Canada, or by any Canadian city with a | 26 |
| population of not
less than 150,000 inhabitants, provided (a) |
|
|
|
HB4891 |
- 3 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| they are payable in United
States currency and are exempt from | 2 |
| any Canadian withholding tax; (b)
the investment in any one | 3 |
| issue of bonds shall not exceed 10% of the
amount outstanding; | 4 |
| and (c) the total investments at book value in
Canadian | 5 |
| securities shall be limited to 5% of the total investment
| 6 |
| account of the board at book value.
| 7 |
| (5.1) Direct obligations of the State of Israel for the | 8 |
| payment of
money, or obligations for the payment of money which | 9 |
| are guaranteed as
to the payment of principal and interest by | 10 |
| the State of Israel, or common
or preferred stock or notes | 11 |
| issued by a bank owned or controlled in whole
or in part by the | 12 |
| State of Israel, on the following conditions:
| 13 |
| (a) The total investments in such obligations shall not | 14 |
| exceed 5% of
the book value of the aggregate investments | 15 |
| owned by the board;
| 16 |
| (b) The State of Israel shall not be in default in the | 17 |
| payment of
principal or interest on any of its direct | 18 |
| general obligations on the
date of such investment;
| 19 |
| (c) The bonds, stock or notes, and interest thereon | 20 |
| shall be payable
in currency of the United States;
| 21 |
| (d) The bonds shall (1) contain an option for the | 22 |
| redemption thereof
after 90 days from date of purchase or | 23 |
| (2) either become due 5 years from
the date of their | 24 |
| purchase or be subject to redemption 120 days after the
| 25 |
| date of notice for redemption;
| 26 |
| (e) The investment in these obligations has been |
|
|
|
HB4891 |
- 4 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| approved in writing
by investment counsel employed by the | 2 |
| board, which counsel shall be a
national or state bank or | 3 |
| trust company authorized to do a trust
business in the | 4 |
| State of Illinois, or an investment advisor qualified
under | 5 |
| the Federal Investment Advisors Act of 1940 and registered | 6 |
| under
the Illinois Securities Act of 1953;
| 7 |
| (f) The fund or system making the investment shall have | 8 |
| at least
$5,000,000 of net present assets.
| 9 |
| (6) Notes secured by mortgages under Sections 203, 207, 220 | 10 |
| and 221 of
the National Housing Act which are insured by the | 11 |
| Federal Housing Commissioner,
or his successor assigns, or | 12 |
| debentures issued by such Commissioner, which
are guaranteed as | 13 |
| to principal and interest by the Federal Housing
| 14 |
| Administration, or agency of the United States Government, | 15 |
| provided the
aggregate investment shall not exceed 20% of the | 16 |
| total investment account
of the board at book value, and | 17 |
| provided further that the investment in
such notes under | 18 |
| Sections 220 and 221 shall in no event exceed one-half of
the | 19 |
| maximum investment in notes under this paragraph.
| 20 |
| (7) Loans to veterans guaranteed in whole or part by the | 21 |
| United
States Government pursuant to Title III of the Act of | 22 |
| Congress known as
the "Servicemen's Readjustment Act of 1944," | 23 |
| 58 Stat. 284, 38 U.S.C.
693, as amended or supplemented from | 24 |
| time to time, provided such
guaranteed loans are liens upon | 25 |
| real estate.
| 26 |
| (8) Common and preferred stocks and convertible debt |
|
|
|
HB4891 |
- 5 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| securities
authorized for investment of trust funds under the | 2 |
| laws of the State of
Illinois, provided:
| 3 |
| (a) the common stocks, except as provided in | 4 |
| subparagraph (g), are
listed on a national securities | 5 |
| exchange or board of trade, as defined in the
federal | 6 |
| Securities Exchange Act of 1934, or quoted in the National | 7 |
| Association
of Securities Dealers Automated Quotation | 8 |
| System (NASDAQ);
| 9 |
| (b) the securities are of a corporation created or | 10 |
| existing under
the laws of the United States or any state, | 11 |
| district or territory thereof,
except that up to 5% of the | 12 |
| assets of a pension fund established under Article
9 of | 13 |
| this Code may be invested in securities issued by | 14 |
| corporations created or
existing under the laws of a | 15 |
| foreign country, if those securities are otherwise
in | 16 |
| conformance with this paragraph (8);
| 17 |
| (c) the corporation is not in arrears on payment of | 18 |
| dividends on its
preferred stock;
| 19 |
| (d) the total book value of all stocks and convertible | 20 |
| debt owned by any
pension fund or retirement system shall | 21 |
| not exceed 40% of the aggregate
book value of all | 22 |
| investments of such pension fund or retirement system,
| 23 |
| except for a pension fund or retirement system governed by | 24 |
| Article
9 or 17, where the total of all stocks and | 25 |
| convertible debt shall
not exceed 50% of the aggregate book | 26 |
| value of all fund investments, and
except for a pension |
|
|
|
HB4891 |
- 6 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| fund or retirement system governed by Article 13,
where the | 2 |
| total market value of all stocks and convertible debt shall | 3 |
| not
exceed 65% of the aggregate market value of all fund | 4 |
| investments;
| 5 |
| (e) the book value of stock and convertible debt | 6 |
| investments in any
one corporation shall not exceed 5% of | 7 |
| the total investment account at book
value in which such | 8 |
| securities are held, determined as of the date of the
| 9 |
| investment, and the investments in the stock of any one | 10 |
| corporation shall
not exceed 5% of the total outstanding | 11 |
| stock of such corporation, and the
investments in the | 12 |
| convertible debt of any one corporation shall not exceed
5% | 13 |
| of the total amount of such debt that may be outstanding;
| 14 |
| (f) the straight preferred stocks or convertible | 15 |
| preferred
stocks and convertible debt securities are | 16 |
| issued or guaranteed by a
corporation whose common stock | 17 |
| qualifies for investment by the board;
and
| 18 |
| (g) that any common stocks not listed or quoted as
| 19 |
| provided in subdivision 8(a) above be limited to the | 20 |
| following
types of institutions: (a) any bank which is a | 21 |
| member of the Federal
Deposit Insurance Corporation having | 22 |
| capital funds represented by
capital stock, surplus and | 23 |
| undivided profits of at least $20,000,000;
(b) any life | 24 |
| insurance company having capital funds represented by
| 25 |
| capital stock, special surplus funds and unassigned | 26 |
| surplus totalling at
least $50,000,000; and (c) any fire or |
|
|
|
HB4891 |
- 7 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| casualty insurance company, or a
combination thereof, | 2 |
| having capital funds represented by capital stock,
net | 3 |
| surplus and voluntary reserves of at least $50,000,000.
| 4 |
| (9) Withdrawable accounts of State chartered and federal | 5 |
| chartered
savings and loan associations insured by the Federal | 6 |
| Savings and Loan
Insurance Corporation; deposits or | 7 |
| certificates of deposit in State
and national banks insured by | 8 |
| the Federal Deposit Insurance Corporation;
and share accounts | 9 |
| or share certificate accounts in a State or federal credit
| 10 |
| union, the accounts of which are insured as required by the | 11 |
| Illinois Credit
Union Act or the Federal Credit Union Act, as | 12 |
| applicable.
| 13 |
| No bank or savings and loan association shall receive | 14 |
| investment funds
as permitted by this subsection (9), unless it | 15 |
| has complied with the
requirements established pursuant to | 16 |
| Section 6 of the Public Funds
Investment Act.
| 17 |
| (10) Trading, purchase or sale of listed options on | 18 |
| underlying
securities owned by the board.
| 19 |
| (11) Contracts and agreements supplemental thereto | 20 |
| providing for
investments in the general account of a life | 21 |
| insurance company authorized
to do business in Illinois.
| 22 |
| (12) Conventional mortgage pass-through securities which | 23 |
| are evidenced
by interests in Illinois owner-occupied | 24 |
| residential mortgages, having not
less than an "A" rating from | 25 |
| at least one national securities
rating service. Such mortgages | 26 |
| may have loan-to-value ratios up to 95%,
provided that any |
|
|
|
HB4891 |
- 8 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| amount over 80% is insured by private mortgage insurance.
The | 2 |
| pool of such mortgages shall be insured by mortgage guaranty or | 3 |
| equivalent
insurance, in accordance with industry standards.
| 4 |
| (13) Pooled or commingled funds managed by a national or | 5 |
| State bank
which is authorized to do a trust business in the | 6 |
| State of Illinois, shares
of registered investment companies as | 7 |
| defined in the federal Investment
Company Act of 1940 which are | 8 |
| registered under that Act, and
separate accounts of a life | 9 |
| insurance company authorized to do business
in Illinois, where | 10 |
| such pooled or commingled funds, shares, or separate
accounts | 11 |
| are comprised of common or preferred stocks, bonds, or money | 12 |
| market
instruments.
| 13 |
| (14) Pooled or commingled funds managed by a national or | 14 |
| state
bank which is authorized to do a trust business in the | 15 |
| State of Illinois,
separate accounts managed by a life | 16 |
| insurance company authorized to
do business in Illinois, and | 17 |
| commingled group trusts managed by an investment
adviser | 18 |
| registered under the federal Investment Advisors Act of 1940 | 19 |
| (15
U.S.C. 80b-1 et seq.) and under the Illinois Securities Law | 20 |
| of 1953, where
such pooled or commingled funds, separate | 21 |
| accounts or commingled group
trusts are comprised of real | 22 |
| estate or loans upon real estate secured by
first or second | 23 |
| mortgages. The total investment in such pooled or
commingled | 24 |
| funds, commingled group trusts and separate accounts shall not
| 25 |
| exceed 10% of the aggregate book value of all investments owned | 26 |
| by the fund.
|
|
|
|
HB4891 |
- 9 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (15) Investment companies which (a) are registered as such | 2 |
| under the
Investment Company Act of 1940, (b) are diversified, | 3 |
| open-end management
investment companies and (c) invest only in | 4 |
| money market instruments.
| 5 |
| (16) Up to 10% of the assets of the fund may be invested in | 6 |
| investments
not included in paragraphs (1) through (15) of this | 7 |
| Section, provided that
such investments comply with the | 8 |
| requirements and restrictions set forth in
Sections 1-109, | 9 |
| 1-109.1, 1-109.2, 1-110 and 1-111 of this Code.
| 10 |
| The board shall have the authority to enter into such | 11 |
| agreements and to
execute such documents as it determines to be | 12 |
| necessary to complete any
investment transaction.
| 13 |
| Any limitations herein set forth shall be applicable only | 14 |
| at the time
of purchase and shall not require the liquidation | 15 |
| of any investment at
any time.
| 16 |
| All investments shall be clearly held and accounted for to | 17 |
| indicate
ownership by such board. Such board may direct the | 18 |
| registration of
securities in its own name or in the name of a | 19 |
| nominee created for the
express purpose of registration of | 20 |
| securities by a national or state
bank or trust company | 21 |
| authorized to conduct a trust business
in the State of | 22 |
| Illinois.
| 23 |
| Investments shall be carried at cost or at a value | 24 |
| determined in accordance
with
generally accepted accounting | 25 |
| principles and accounting procedures
approved by such board.
| 26 |
| (Source: P.A. 92-53, eff. 7-12-01.)
|
|
|
|
HB4891 |
- 10 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (40 ILCS 5/1-113.1)
| 2 |
| Sec. 1-113.1. Investment authority of pension funds | 3 |
| established under
Article 3 or 4 . The board of trustees of a | 4 |
| police pension fund established
under Article 3 of this Code or | 5 |
| firefighter pension fund established under
Article 4 of this | 6 |
| Code shall draw pension funds from the treasurer of the
| 7 |
| municipality and, beginning January 1, 1998, invest any part | 8 |
| thereof in the
name of the board in the items listed in | 9 |
| Sections 1-113.2 through 1-113.4
according to the limitations | 10 |
| and requirements of this Article. These
investments shall be | 11 |
| made with the care, skill, prudence, and diligence that a
| 12 |
| prudent person acting in like capacity and familiar with such | 13 |
| matters would use
in the conduct of an enterprise of like | 14 |
| character with like aims.
| 15 |
| Interest and any other income from the investments shall be | 16 |
| credited to the
pension fund.
| 17 |
| For the purposes of Sections 1-113.2 through 1-113.11, the | 18 |
| "net assets" of a
pension fund include both the cash and | 19 |
| invested assets of the pension fund.
| 20 |
| (Source: P.A. 90-507, eff. 8-22-97.)
| 21 |
| (40 ILCS 5/1-113.2)
| 22 |
| Sec. 1-113.2. List of permitted investments for all Article | 23 |
| 3 or 4 pension
funds. Any pension fund established under | 24 |
| Article 3 or 4 may invest in the
following items:
|
|
|
|
HB4891 |
- 11 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (1) Interest bearing direct obligations of the United | 2 |
| States of America.
| 3 |
| (2) Interest bearing obligations to the extent that they | 4 |
| are fully
guaranteed or insured as to payment of principal and | 5 |
| interest by the United
States of America.
| 6 |
| (3) Interest bearing bonds, notes, debentures, or other | 7 |
| similar obligations
of agencies of the United States of | 8 |
| America. For the purposes of this Section,
"agencies of the | 9 |
| United States of America" includes: (i) the Federal National
| 10 |
| Mortgage Association and the Student Loan Marketing | 11 |
| Association; (ii) federal
land banks, federal intermediate | 12 |
| credit banks,
federal farm credit banks, and any other entity | 13 |
| authorized to
issue direct debt obligations of the United | 14 |
| States of America under the Farm
Credit Act of 1971 or | 15 |
| amendments to that Act; (iii) federal home loan banks and
the | 16 |
| Federal Home Loan Mortgage Corporation; and (iv) any agency | 17 |
| created
by Act of Congress that is authorized to issue direct | 18 |
| debt obligations of the
United States of America.
| 19 |
| (4) Interest bearing savings accounts or certificates of | 20 |
| deposit, issued by
federally chartered banks or savings and | 21 |
| loan associations, to the extent that
the deposits are insured | 22 |
| by agencies or instrumentalities of the federal
government.
| 23 |
| (5) Interest bearing savings accounts or certificates of | 24 |
| deposit, issued by
State of Illinois chartered banks or savings | 25 |
| and loan associations, to the
extent that the deposits are | 26 |
| insured by agencies or instrumentalities of the
federal |
|
|
|
HB4891 |
- 12 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| government.
| 2 |
| (6) Investments in credit unions, to the extent that the | 3 |
| investments are
insured by agencies or instrumentalities of the | 4 |
| federal government.
| 5 |
| (7) Interest bearing bonds of the State of Illinois.
| 6 |
| (8) Pooled interest bearing accounts managed by the | 7 |
| Illinois Public
Treasurer's Investment Pool in accordance with | 8 |
| the Deposit of State Moneys Act
and interest bearing funds or | 9 |
| pooled accounts managed, operated, and
administered by banks, | 10 |
| subsidiaries of banks, or subsidiaries of bank holding
| 11 |
| companies in accordance with the laws of the State of Illinois.
| 12 |
| (9) Interest bearing bonds or tax anticipation warrants of | 13 |
| any county,
township, or municipal corporation of the State of | 14 |
| Illinois.
| 15 |
| (10) Direct obligations of the State of Israel, subject to | 16 |
| the conditions
and limitations of item (5.1) of Section 1-113.
| 17 |
| (11) Money market mutual funds managed by investment | 18 |
| companies that are
registered under the federal Investment | 19 |
| Company Act of 1940 and the Illinois
Securities Law of 1953 and | 20 |
| are diversified, open-ended management investment
companies; | 21 |
| provided that the portfolio of the money market mutual fund is
| 22 |
| limited to the following:
| 23 |
| (i) bonds, notes, certificates of indebtedness, | 24 |
| treasury bills, or other
securities that are guaranteed by | 25 |
| the full faith and credit of the United
States of America | 26 |
| as to principal and interest;
|
|
|
|
HB4891 |
- 13 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (ii) bonds, notes, debentures, or other similar | 2 |
| obligations of the United
States of America or its | 3 |
| agencies; and
| 4 |
| (iii) short term obligations of corporations organized | 5 |
| in the United
States with assets exceeding $400,000,000, | 6 |
| provided that (A) the obligations
mature no later than 180 | 7 |
| days from the date of purchase, (B) at the time of
| 8 |
| purchase, the obligations are rated by at least 2 standard | 9 |
| national rating
services at one of their 3 highest | 10 |
| classifications, and (C) the obligations
held by the mutual | 11 |
| fund do not exceed 10% of the corporation's outstanding
| 12 |
| obligations.
| 13 |
| (12) General accounts of life insurance companies | 14 |
| authorized to transact
business in Illinois.
| 15 |
| (13) Any combination of the following, not to exceed 10% of | 16 |
| the pension
fund's net assets:
| 17 |
| (i) separate accounts that are managed by life | 18 |
| insurance companies
authorized to transact business in | 19 |
| Illinois and are comprised of diversified
portfolios | 20 |
| consisting of common or preferred stocks, bonds, or money | 21 |
| market
instruments;
| 22 |
| (ii) separate accounts that are managed by insurance | 23 |
| companies authorized
to transact business in Illinois, and | 24 |
| are comprised of real estate
or loans upon real estate | 25 |
| secured by first or second mortgages; and
| 26 |
| (iii) mutual funds that meet the following |
|
|
|
HB4891 |
- 14 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| requirements:
| 2 |
| (A) the mutual fund is managed by an investment | 3 |
| company as defined and
registered under the federal | 4 |
| Investment Company Act of 1940 and registered
under the | 5 |
| Illinois Securities Law of 1953;
| 6 |
| (B) the mutual fund has been in operation for at | 7 |
| least 5 years;
| 8 |
| (C) the mutual fund has total net assets of $250 | 9 |
| million or more; and
| 10 |
| (D) the mutual fund is comprised of diversified | 11 |
| portfolios of
common or preferred stocks, bonds, or | 12 |
| money market instruments.
| 13 |
| (Source: P.A. 90-507, eff. 8-22-97; 91-887, eff. 7-6-00.)
| 14 |
| (40 ILCS 5/1-113.3)
| 15 |
| Sec. 1-113.3. List of additional permitted investments for | 16 |
| pension funds
with net assets of $2,500,000 or more.
| 17 |
| (a) In addition to the items in Section
3-113.2, a pension | 18 |
| fund established under Article 3 or 4 that has net assets of
at | 19 |
| least $2,500,000 may invest a portion of its net assets in the | 20 |
| following
items:
| 21 |
| (1) Separate accounts that are managed by life | 22 |
| insurance companies
authorized to transact business in | 23 |
| Illinois and are comprised of diversified
portfolios | 24 |
| consisting of common or preferred stocks, bonds, or money | 25 |
| market
instruments.
|
|
|
|
HB4891 |
- 15 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (2) Mutual funds that meet the following requirements:
| 2 |
| (i) the mutual fund is managed by an investment | 3 |
| company as defined and
registered under the federal | 4 |
| Investment Company Act of 1940 and registered
under the | 5 |
| Illinois Securities Law of 1953;
| 6 |
| (ii) the mutual fund has been in operation for at | 7 |
| least 5 years;
| 8 |
| (iii) the mutual fund has total net assets of $250 | 9 |
| million or more; and
| 10 |
| (iv) the mutual fund is comprised of diversified | 11 |
| portfolios of common or
preferred stocks, bonds, or | 12 |
| money market instruments.
| 13 |
| (b) A pension fund's total investment in the items | 14 |
| authorized under this
Section shall not exceed 35% of the | 15 |
| market value of the pension fund's net
present assets stated in | 16 |
| its most recent annual report on file with the
Illinois | 17 |
| Department of Insurance.
| 18 |
| (Source: P.A. 90-507, eff. 8-22-97.)
| 19 |
| (40 ILCS 5/1-113.4)
| 20 |
| Sec. 1-113.4. List of additional permitted investments for | 21 |
| pension funds
with net assets of $5,000,000 or more. | 22 |
| (a) In addition to the items in Sections 1-113.2 and | 23 |
| 1-113.3, a pension fund
established under Article 3 or 4 that | 24 |
| has net assets of at least $5,000,000 and
has appointed an | 25 |
| investment adviser under Section 1-113.5 may, through that
|
|
|
|
HB4891 |
- 16 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| investment adviser, invest a portion of its assets in common | 2 |
| and preferred
stocks authorized for investments of trust funds | 3 |
| under the laws of the State
of Illinois. The stocks must meet | 4 |
| all of the following requirements:
| 5 |
| (1) The common stocks are listed on a national | 6 |
| securities exchange or
board of trade (as defined in the | 7 |
| federal Securities Exchange Act of 1934 and
set forth in | 8 |
| Section 3.G of the Illinois Securities Law of 1953) or | 9 |
| quoted in
the National Association of Securities Dealers | 10 |
| Automated Quotation System
National Market System (NASDAQ | 11 |
| NMS).
| 12 |
| (2) The securities are of a corporation created or | 13 |
| existing under the laws
of the United States or any state, | 14 |
| district, or territory thereof and the
corporation has been | 15 |
| in existence for at least 5 years.
| 16 |
| (3) The corporation has not been in arrears on payment | 17 |
| of dividends on its
preferred stock during the preceding 5 | 18 |
| years.
| 19 |
| (4) The market value of stock in any one corporation | 20 |
| does not exceed 5% of
the cash and invested assets of the | 21 |
| pension fund, and the investments in the
stock of any one | 22 |
| corporation do not exceed 5% of the total outstanding stock | 23 |
| of
that corporation.
| 24 |
| (5) The straight preferred stocks or convertible | 25 |
| preferred stocks are
issued or guaranteed by a corporation | 26 |
| whose common stock qualifies for
investment by the board.
|
|
|
|
HB4891 |
- 17 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| (6) The issuer of the stocks has been subject to the | 2 |
| requirements of
Section 12 of the federal Securities | 3 |
| Exchange Act of 1934 and has been current
with the filing | 4 |
| requirements of Sections 13 and 14 of that Act during the
| 5 |
| preceding 3 years.
| 6 |
| (b) A pension fund's total investment in the items | 7 |
| authorized under this
Section and Section 1-113.3 shall not | 8 |
| exceed 35% of the market value of the
pension fund's net | 9 |
| present assets stated in its most recent annual report on
file | 10 |
| with the Illinois Department of Insurance.
| 11 |
| (c) A pension fund that invests funds under this Section | 12 |
| shall
electronically file with the Division any reports of its | 13 |
| investment activities
that the Division may require, at the | 14 |
| times and in the format required by the
Division.
| 15 |
| (Source: P.A. 90-507, eff. 8-22-97.)
| 16 |
| (40 ILCS 5/1-113.5)
| 17 |
| Sec. 1-113.5. Investment advisers and investment services.
| 18 |
| (a) The board of trustees of a pension fund established | 19 |
| under Article 3 may appoint investment advisers
as defined in | 20 |
| Section 1-101.4. The board of trustees of a pension fund | 21 |
| established under Article 4 must appoint investment advisers as | 22 |
| defined in Section 1-101.4. The board of any pension fund | 23 |
| investing in
common or preferred stock under Section 1-113.4 | 24 |
| shall appoint an investment
adviser before making such | 25 |
| investments.
|
|
|
|
HB4891 |
- 18 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| The investment adviser shall be a fiduciary, as defined in | 2 |
| Section 1-101.2,
with respect to the pension fund and shall be | 3 |
| one of the following:
| 4 |
| (1) an investment adviser registered under the federal | 5 |
| Investment Advisers
Act of 1940 and the Illinois Securities | 6 |
| Law of 1953;
| 7 |
| (2) a bank or trust company authorized to conduct a | 8 |
| trust business in
Illinois;
| 9 |
| (3) a life insurance company authorized to transact | 10 |
| business in Illinois;
or
| 11 |
| (4) an investment company as defined and registered | 12 |
| under the federal
Investment Company Act of 1940 and | 13 |
| registered under the Illinois Securities Law
of 1953.
| 14 |
| (b) All investment advice and services provided by an | 15 |
| investment adviser
appointed under this Section shall be | 16 |
| rendered pursuant to a written contract
between the investment | 17 |
| adviser and the board, and in accordance with the
board's | 18 |
| investment policy.
| 19 |
| The contract shall include all of the following:
| 20 |
| (1) acknowledgement in writing by the investment | 21 |
| adviser that he or she
is a fiduciary with respect to the | 22 |
| pension fund;
| 23 |
| (2) the board's investment policy;
| 24 |
| (3) full disclosure of direct and indirect fees, | 25 |
| commissions, penalties,
and any other compensation that | 26 |
| may be received by the investment adviser,
including |
|
|
|
HB4891 |
- 19 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| reimbursement for expenses; and
| 2 |
| (4) a requirement that the investment adviser submit | 3 |
| periodic written
reports, on at least a quarterly basis, | 4 |
| for the board's review at its regularly
scheduled meetings. | 5 |
| All returns on investment shall be reported as net returns
| 6 |
| after payment of all fees, commissions, and any other | 7 |
| compensation.
| 8 |
| (c) Within 30 days after appointing an investment adviser, | 9 |
| the board shall
submit a copy of the contract to the Department | 10 |
| of Insurance.
| 11 |
| (d) Investment services provided by a person other than an | 12 |
| investment
adviser appointed under this Section, including but | 13 |
| not limited to services
provided by the kinds of persons listed | 14 |
| in items (1) through (4) of subsection
(a), shall be rendered | 15 |
| only after full written disclosure of direct and
indirect fees, | 16 |
| commissions, penalties, and any other compensation that shall | 17 |
| or
may be received by the person rendering those services.
| 18 |
| (e) The board of trustees of each pension fund shall retain | 19 |
| records of
investment transactions in accordance with the rules | 20 |
| of the Department of
Insurance.
| 21 |
| (Source: P.A. 90-507, eff. 8-22-97.)
| 22 |
| (40 ILCS 5/1-113.8)
| 23 |
| Sec. 1-113.8. Limitations on banks and savings and loan | 24 |
| associations. A
bank or savings and loan association shall not | 25 |
| receive investment funds from
a pension fund established under |
|
|
|
HB4891 |
- 20 - |
LRB095 18353 AMC 44438 b |
|
| 1 |
| Article 3 or 4 of this Code, unless it has
complied with the | 2 |
| requirements established under Section 6 of the Public Funds
| 3 |
| Investment Act. The limitations set forth in that Section 6 are | 4 |
| applicable
only at the time of investment and do not require | 5 |
| the liquidation of any
investment at any time.
| 6 |
| (Source: P.A. 90-507, eff. 8-22-97.)
| 7 |
| (40 ILCS 5/1-113.12)
| 8 |
| Sec. 1-113.12. Application. Sections 1-113.1 through | 9 |
| 1-113.4, 1-113.8, and 1-113.11 1-113.10 apply only
to pension | 10 |
| funds established under Article 3 or 4 of this Code. Sections | 11 |
| 1-113.5, 1-113.6, 1-113.7, 1-113.9, and 1-113.10 apply only to | 12 |
| pension funds established under Article 3 or 4 of this Code.
| 13 |
| (Source: P.A. 90-507, eff. 8-22-97.)
| 14 |
| Section 90. The State Mandates Act is amended by adding | 15 |
| Section 8.32 as follows: | 16 |
| (30 ILCS 805/8.32 new) | 17 |
| Sec. 8.32. Exempt mandate. Notwithstanding Sections 6 and 8 | 18 |
| of this Act, no reimbursement by the State is required for the | 19 |
| implementation of any mandate created by this amendatory Act of | 20 |
| the 95th General Assembly.
|
|