Illinois 2023-2024 Regular Session

Illinois House Bill HB2623 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2623 Introduced , by Rep. Stephanie A. Kifowit SYNOPSIS AS INTRODUCED: 40 ILCS 5/16-20440 ILCS 5/16-207 new Amends the Downstate Teacher Article of the Illinois Pension Code. In a provision that requires the System to automatically enroll certain employees in the System's defined contribution benefit, provides an exception for employees whose school district provides an alternative qualifying plan. Provides that the alternative qualifying plan shall abide by the automatic enrollment procedures and automatic increase in contribution provisions applicable to the System's defined contribution benefit. Sets forth additional requirements for alternative qualifying plans. Requires a school district that has an alternative qualifying plan to file a letter of compliance, passed by resolution of the school board, with the System. Effective immediately. LRB103 29985 RPS 56404 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2623 Introduced , by Rep. Stephanie A. Kifowit SYNOPSIS AS INTRODUCED: 40 ILCS 5/16-20440 ILCS 5/16-207 new 40 ILCS 5/16-204 40 ILCS 5/16-207 new Amends the Downstate Teacher Article of the Illinois Pension Code. In a provision that requires the System to automatically enroll certain employees in the System's defined contribution benefit, provides an exception for employees whose school district provides an alternative qualifying plan. Provides that the alternative qualifying plan shall abide by the automatic enrollment procedures and automatic increase in contribution provisions applicable to the System's defined contribution benefit. Sets forth additional requirements for alternative qualifying plans. Requires a school district that has an alternative qualifying plan to file a letter of compliance, passed by resolution of the school board, with the System. Effective immediately. LRB103 29985 RPS 56404 b LRB103 29985 RPS 56404 b A BILL FOR
2	2	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2623 Introduced , by Rep. Stephanie A. Kifowit SYNOPSIS AS INTRODUCED:
3	3	40 ILCS 5/16-20440 ILCS 5/16-207 new 40 ILCS 5/16-204 40 ILCS 5/16-207 new
4	4	40 ILCS 5/16-204
5	5	40 ILCS 5/16-207 new
6	6	Amends the Downstate Teacher Article of the Illinois Pension Code. In a provision that requires the System to automatically enroll certain employees in the System's defined contribution benefit, provides an exception for employees whose school district provides an alternative qualifying plan. Provides that the alternative qualifying plan shall abide by the automatic enrollment procedures and automatic increase in contribution provisions applicable to the System's defined contribution benefit. Sets forth additional requirements for alternative qualifying plans. Requires a school district that has an alternative qualifying plan to file a letter of compliance, passed by resolution of the school board, with the System. Effective immediately.
7	7	LRB103 29985 RPS 56404 b LRB103 29985 RPS 56404 b
8	8	LRB103 29985 RPS 56404 b
9	9	A BILL FOR
10	10	HB2623LRB103 29985 RPS 56404 b HB2623 LRB103 29985 RPS 56404 b
11	11	HB2623 LRB103 29985 RPS 56404 b
12	12	1 AN ACT concerning public employee benefits.
13	13	2 Be it enacted by the People of the State of Illinois,
14	14	3 represented in the General Assembly:
15	15	4 Section 5. The Illinois Pension Code is amended by
16	16	5 changing Section 16-204 and by adding Section 16-207 as
17	17	6 follows:
18	18	7 (40 ILCS 5/16-204)
19	19	8 Sec. 16-204. Optional defined contribution benefit.
20	20	9 (a) As soon as practicable after the effective date of
21	21	10 this amendatory Act of the 100th General Assembly, the System
22	22	11 shall offer a defined contribution benefit to active members
23	23	12 of the System. The defined contribution benefit shall be an
24	24	13 optional benefit to any member who chooses to participate. The
25	25	14 defined contribution benefit shall collect optional employee
26	26	15 and optional employer contributions into an account and shall
27	27	16 offer investment options to the participant. The benefit under
28	28	17 this Section shall be operated in full compliance with any
29	29	18 applicable State and federal laws, and the System shall
30	30	19 utilize generally accepted practices in creating and
31	31	20 maintaining the benefit for the best interest of the
32	32	21 participants. The System may use funds from the employee and
33	33	22 employer contributions to defray any and all costs of creating
34	34	23 and maintaining the benefit. In addition, the System may use
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38	38	103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2623 Introduced , by Rep. Stephanie A. Kifowit SYNOPSIS AS INTRODUCED:
39	39	40 ILCS 5/16-20440 ILCS 5/16-207 new 40 ILCS 5/16-204 40 ILCS 5/16-207 new
40	40	40 ILCS 5/16-204
41	41	40 ILCS 5/16-207 new
42	42	Amends the Downstate Teacher Article of the Illinois Pension Code. In a provision that requires the System to automatically enroll certain employees in the System's defined contribution benefit, provides an exception for employees whose school district provides an alternative qualifying plan. Provides that the alternative qualifying plan shall abide by the automatic enrollment procedures and automatic increase in contribution provisions applicable to the System's defined contribution benefit. Sets forth additional requirements for alternative qualifying plans. Requires a school district that has an alternative qualifying plan to file a letter of compliance, passed by resolution of the school board, with the System. Effective immediately.
43	43	LRB103 29985 RPS 56404 b LRB103 29985 RPS 56404 b
44	44	LRB103 29985 RPS 56404 b
45	45	A BILL FOR
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51	51	40 ILCS 5/16-204
52	52	40 ILCS 5/16-207 new
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69	69	HB2623- 2 -LRB103 29985 RPS 56404 b HB2623 - 2 - LRB103 29985 RPS 56404 b
70	70	HB2623 - 2 - LRB103 29985 RPS 56404 b
71	71	1 funds provided under Section 16-158 of this Code to defray any
72	72	2 and all costs of creating and maintaining the benefit and then
73	73	3 shall reimburse those costs from funds received from the
74	74	4 employee and employer contributions under this Section. All
75	75	5 employers must comply with the reporting and administrative
76	76	6 functions established by the System and are required to
77	77	7 implement the benefits established under this Section. The
78	78	8 System shall produce an annual report on the participation in
79	79	9 the benefit and shall make the report public.
80	80	10 (b) As soon as is practicable on or after January 1, 2022,
81	81	11 the System shall automatically enroll any employee who first
82	82	12 becomes an active member or participant in the System, unless
83	83	13 the school district that employs the employee provides an
84	84	14 alternative qualifying plan under subsection (d) and Section
85	85	15 16-207. School districts electing to use an alternative
86	86	16 qualifying plan shall abide by the automatic enrollment
87	87	17 procedures provided in this subsection (b) and the automatic
88	88	18 increase of contributions provisions under subsection (c). A
89	89	19 member automatically enrolled under this Section shall have 3%
90	90	20 of his or her pre-tax gross compensation for each compensation
91	91	21 period deferred into his or her deferred compensation account,
92	92	22 unless the member otherwise instructs the System on forms
93	93	23 approved by the System. A member may elect, in a manner
94	94	24 provided for by the System, to not participate in the defined
95	95	25 contribution benefit or to increase or reduce the amount of
96	96	26 pre-tax gross compensation contributed, consistent with State
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102	102	HB2623 - 2 - LRB103 29985 RPS 56404 b
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107	107	1 or federal law. A member shall be automatically enrolled in
108	108	2 the benefit beginning the first day of the pay period
109	109	3 following the member's 30th day of employment. A member who
110	110	4 has been automatically enrolled in the benefit may elect,
111	111	5 within 90 days of enrollment, to withdraw from the benefit and
112	112	6 receive a refund of amounts deferred, plus or minus any
113	113	7 applicable earnings, investment fees, and administrative fees.
114	114	8 Any refunded amount shall be included in the member's gross
115	115	9 income for the taxable year in which the refund is issued.
116	116	10 (c) On or after January 1, 2023, the System may elect to
117	117	11 increase the automatic annual contributions under this
118	118	12 Section. The increase in the rate of contribution, however,
119	119	13 shall not exceed 2% of a member's pre-tax gross compensation
120	120	14 per year, and at no time shall any total contribution exceed
121	121	15 any contribution limits established by State or federal law.
122	122	16 (d) In this Section, "alternative qualifying plan" means a
123	123	17 defined contribution benefit plan that is subject to the
124	124	18 requirements of Article 1 of this Code, meets the qualifying
125	125	19 criteria specified in this subsection (d), and is sponsored by
126	126	20 a school district. Any school district may elect to offer an
127	127	21 alternative qualifying plan, instead of adopting the System's
128	128	22 defined contribution benefit plan. A school district's
129	129	23 alternative qualifying plan may automatically enroll employees
130	130	24 who first become active members or participants in the System
131	131	25 on or after June 1, 2023 into an alternative qualifying plan
132	132	26 only if the plan satisfies the following criteria:
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138	138	HB2623 - 3 - LRB103 29985 RPS 56404 b
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143	143	1 (1) the alternative qualifying plan only has a single
144	144	2 vendor for recordkeeping services;
145	145	3 (2) the alternative qualifying plan does not have any
146	146	4 annuities or separate accounts;
147	147	5 (3) the alternative qualifying plan permits employees
148	148	6 to transfer or roll over funds (i) without cost to the
149	149	7 employee and (ii) at the time instructed by the employee;
150	150	8 and
151	151	9 (4) the alternative qualifying plan requires that the
152	152	10 plan recordkeeper agree that, in performing services with
153	153	11 respect to the plan, the recordkeeper (i) must not use
154	154	12 information received as a result of providing services to
155	155	13 the plan or the plan's participants to solicit the plan's
156	156	14 participants for the purpose of cross-selling non-plan
157	157	15 products and services, unless in response to a request by
158	158	16 a plan participant; and (ii) shall not promote, recommend,
159	159	17 endorse, or solicit plan participants to purchase any
160	160	18 financial products or services outside of the plan.
161	161	19 (Source: P.A. 102-540, eff. 8-20-21.)
162	162	20 (40 ILCS 5/16-207 new)
163	163	21 Sec. 16-207. Alternative qualifying plan application and
164	164	22 documentation.
165	165	23 (a) The optional defined contribution benefit established
166	166	24 under Section 16-204 constitutes the default defined
167	167	25 contribution plan for members of the System. A school district
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178	178	1 may only elect to enroll employees into an alternative
179	179	2 qualifying plan if the school district's desired alternative
180	180	3 qualifying plan meets the criteria established in Section
181	181	4 16-204 and the school district files a letter of compliance,
182	182	5 passed by resolution of the school board, with the System.
183	183	6 (b) School districts must submit a copy of the passed
184	184	7 resolution to the System certifying that its alternative
185	185	8 qualifying plan meets the criteria established in Section
186	186	9 16-204.
187	187	10 (c) The school district must submit the resolution to the
188	188	11 System as soon as practicable after the school board passes
189	189	12 the resolution.
190	190	13 (d) The System shall maintain a record of all alternative
191	191	14 qualifying plans.
192	192	15 Section 99. Effective date. This Act takes effect upon
193	193	16 becoming law.
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199	199	HB2623 - 5 - LRB103 29985 RPS 56404 b