State of Illinois
92nd General Assembly
Legislation

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92_HB3587

 
                                               LRB9207361EGfg

 1        AN ACT in relation to 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 Section 1-109.1 as follows:

 6        (40 ILCS 5/1-109.1) (from Ch. 108 1/2, par. 1-109.1)
 7        Sec.  1-109.1.  Allocation  and  Delegation  of Fiduciary
 8    Duties.
 9        (1)  Subject to the provisions of Section 22A-113 of this
10    Code and subsections (2) and (3) of this Section,  the  board
11    of   trustees   of   a  retirement  system  or  pension  fund
12    established under this Code may:
13             (a)  Appoint one  or  more  investment  managers  as
14        fiduciaries to manage (including the power to acquire and
15        dispose  of)  any  assets  of  the  retirement  system or
16        pension fund; and
17             (b)  Allocate duties among themselves and  designate
18        others  as  fiduciaries  to  carry out specific fiduciary
19        activities other than the management of the assets of the
20        retirement system or pension fund.
21        (2)  The board of trustees of a pension fund  established
22    under  Article  5, 6, 8, 9, 10, 11, 12 or 17 of this Code may
23    not transfer  its  investment  authority,  nor  transfer  the
24    assets  of  the  fund  to  any other person or entity for the
25    purpose of consolidating or merging its assets and management
26    with any other pension fund or public  investment  authority,
27    unless  the  board  resolution  authorizing  such transfer is
28    submitted for approval to the contributors and pensioners  of
29    the  fund  at  elections held not less than 30 days after the
30    adoption of such resolution by the board, and such resolution
31    is approved by a majority of the votes cast on  the  question
 
                            -2-                LRB9207361EGfg
 1    in   both   the  contributors  election  and  the  pensioners
 2    election.   The  election   procedures   and   qualifications
 3    governing   the   election   of  trustees  shall  govern  the
 4    submission of resolutions for approval under this  paragraph,
 5    insofar as they may be made applicable.
 6        (3)   Pursuant to subsections (h) and (i) of Section 6 of
 7    Article  VII  of  the  Illinois  Constitution, the investment
 8    authority of boards of trustees  of  retirement  systems  and
 9    pension funds established under this Code is declared to be a
10    subject  of  exclusive State jurisdiction, and the concurrent
11    exercise by a home rule unit  of  any  power  affecting  such
12    investment   authority  is  hereby  specifically  denied  and
13    preempted.
14        (4)  For the purposes of this Code, "emerging  investment
15    manager" means a qualified investment adviser that manages an
16    investment  portfolio  of  at least $10,000,000 but less than
17    $400,000,000 on January 1, 1993  and  is  a  "minority  owned
18    business"  or  "female  owned  business"  as  those terms are
19    defined in the Minority and Female  Business  Enterprise  for
20    Minorities, Females, and Persons with Disabilities Act.
21        It  is  hereby  declared  to  be the public policy of the
22    State  of  Illinois  to  encourage  the  trustees  of  public
23    employee  retirement  systems  to  use  emerging   investment
24    managers  in  managing  their system's assets to the greatest
25    extent feasible within the bounds of financial and  fiduciary
26    prudence,  and  to  take  affirmative  steps  to  remove  any
27    barriers  to  the  full  participation of emerging investment
28    managers  in  investment  opportunities  afforded  by   those
29    retirement systems.
30        Each retirement system subject to this Code shall prepare
31    a  report  to  be  submitted  to the Governor and the General
32    Assembly by September 1  of  each  year.   The  report  shall
33    identify the emerging investment managers used by the system,
34    the  percentage  of  the system's assets under the investment
 
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 1    control of emerging investment managers, and the  actions  it
 2    has  undertaken  to  increase  the use of emerging investment
 3    managers, including encouraging other investment managers  to
 4    use  emerging  investment managers as subcontractors when the
 5    opportunity arises.
 6        The use  of  an  emerging  investment  manager  does  not
 7    constitute   a  transfer  of  investment  authority  for  the
 8    purposes of subsection (2) of this Section.
 9    (Source: P.A. 86-1488; 87-1265; revised 8-23-99)

10        Section 99. Effective date.  This Act takes  effect  upon
11    becoming law.

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