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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 $10,000,000but less than17$400,000,000 on January 1, 1993and is a "minority owned 18 business" or "female owned business" as those terms are 19 defined in theMinority and FemaleBusiness 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 -3- LRB9207361EGfg 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.