IL
Illinois Senate Bill SB3789

Illinois 2023-2024 Regular Session

Illinois Senate Bill SB3789 Compare Versions

Only one version of the bill is available at this time.
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11 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3789 Introduced 2/9/2024, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 40 ILCS 5/15-202110 ILCS 95/2 from Ch. 144, par. 1702 Amends the State Universities Article of the Illinois Pension Code. Provides that the System shall require that the deferred compensation recordkeeper agree that, in performing services with respect to the deferred compensation plan, the recordkeeper: (i) will not use information received as a result of providing services with respect to the deferred compensation plan or the participants in the deferred compensation plan to solicit the participants in the deferred compensation plan for the purpose of cross-selling nonplan products and services, unless in response to a request by a participant in the deferred compensation plan or a request by the System (currently, a request by a participant in the deferred compensation plan); and (ii) will not promote, recommend, endorse, or solicit participants in the deferred compensation plan to purchase any financial products or services outside of the deferred compensation plan, except that links to parts of the recordkeeper's or the recordkeeper's affiliate's (currently, recordkeeper's) website that are generally available to the public, are about commercial products, and may be encountered by a participant in the regular course of navigating the recordkeeper's or the recordkeeper's affiliate's website (currently, recordkeeper's) does not constitute a violation of the prohibition. Amends the University Employees Custodial Accounts Act. Makes similar changes. In a provision prohibiting a defined contribution plan recordkeeper from promoting credit cards, life insurance, or banking products, provides an exception if a request to provide those products is made by the governing board of the public institution of higher education or its authorized delegate. Effective immediately. LRB103 37547 RPS 67671 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3789 Introduced 2/9/2024, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 40 ILCS 5/15-202110 ILCS 95/2 from Ch. 144, par. 1702 40 ILCS 5/15-202 110 ILCS 95/2 from Ch. 144, par. 1702 Amends the State Universities Article of the Illinois Pension Code. Provides that the System shall require that the deferred compensation recordkeeper agree that, in performing services with respect to the deferred compensation plan, the recordkeeper: (i) will not use information received as a result of providing services with respect to the deferred compensation plan or the participants in the deferred compensation plan to solicit the participants in the deferred compensation plan for the purpose of cross-selling nonplan products and services, unless in response to a request by a participant in the deferred compensation plan or a request by the System (currently, a request by a participant in the deferred compensation plan); and (ii) will not promote, recommend, endorse, or solicit participants in the deferred compensation plan to purchase any financial products or services outside of the deferred compensation plan, except that links to parts of the recordkeeper's or the recordkeeper's affiliate's (currently, recordkeeper's) website that are generally available to the public, are about commercial products, and may be encountered by a participant in the regular course of navigating the recordkeeper's or the recordkeeper's affiliate's website (currently, recordkeeper's) does not constitute a violation of the prohibition. Amends the University Employees Custodial Accounts Act. Makes similar changes. In a provision prohibiting a defined contribution plan recordkeeper from promoting credit cards, life insurance, or banking products, provides an exception if a request to provide those products is made by the governing board of the public institution of higher education or its authorized delegate. Effective immediately. LRB103 37547 RPS 67671 b LRB103 37547 RPS 67671 b A BILL FOR
22 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3789 Introduced 2/9/2024, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
33 40 ILCS 5/15-202110 ILCS 95/2 from Ch. 144, par. 1702 40 ILCS 5/15-202 110 ILCS 95/2 from Ch. 144, par. 1702
44 40 ILCS 5/15-202
55 110 ILCS 95/2 from Ch. 144, par. 1702
66 Amends the State Universities Article of the Illinois Pension Code. Provides that the System shall require that the deferred compensation recordkeeper agree that, in performing services with respect to the deferred compensation plan, the recordkeeper: (i) will not use information received as a result of providing services with respect to the deferred compensation plan or the participants in the deferred compensation plan to solicit the participants in the deferred compensation plan for the purpose of cross-selling nonplan products and services, unless in response to a request by a participant in the deferred compensation plan or a request by the System (currently, a request by a participant in the deferred compensation plan); and (ii) will not promote, recommend, endorse, or solicit participants in the deferred compensation plan to purchase any financial products or services outside of the deferred compensation plan, except that links to parts of the recordkeeper's or the recordkeeper's affiliate's (currently, recordkeeper's) website that are generally available to the public, are about commercial products, and may be encountered by a participant in the regular course of navigating the recordkeeper's or the recordkeeper's affiliate's website (currently, recordkeeper's) does not constitute a violation of the prohibition. Amends the University Employees Custodial Accounts Act. Makes similar changes. In a provision prohibiting a defined contribution plan recordkeeper from promoting credit cards, life insurance, or banking products, provides an exception if a request to provide those products is made by the governing board of the public institution of higher education or its authorized delegate. Effective immediately.
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1212 1 AN ACT concerning public employee benefits.
1313 2 Be it enacted by the People of the State of Illinois,
1414 3 represented in the General Assembly:
1515 4 Section 5. The Illinois Pension Code is amended by
1616 5 changing Section 15-202 as follows:
1717 6 (40 ILCS 5/15-202)
1818 7 Sec. 15-202. Optional deferred compensation plan.
1919 8 (a) As soon as practicable after August 10, 2018 (the
2020 9 effective date of Public Act 100-769), the System shall offer
2121 10 a deferred compensation plan that is eligible under Section
2222 11 457(b) of the Internal Revenue Code of 1986, as amended, to
2323 12 participating employees of the System employed by employers
2424 13 described in Section 15-106 of this Code that qualify as
2525 14 eligible employers under Section 457(e)(1)(A) of the Internal
2626 15 Revenue Code of 1986, as amended. Such eligible employers
2727 16 shall adopt the plan with an effective date no later than
2828 17 September 1, 2021. Participating employees may voluntarily
2929 18 elect to make elective deferrals to the eligible deferred
3030 19 compensation plan. Eligible employers may make optional
3131 20 employer contributions to the plan on behalf of participating
3232 21 employees, which contributions may be maintained, increased,
3333 22 reduced, or eliminated at the discretion of the employer from
3434 23 plan year to plan year. The plan shall collect voluntary
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3838 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3789 Introduced 2/9/2024, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
3939 40 ILCS 5/15-202110 ILCS 95/2 from Ch. 144, par. 1702 40 ILCS 5/15-202 110 ILCS 95/2 from Ch. 144, par. 1702
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4141 110 ILCS 95/2 from Ch. 144, par. 1702
4242 Amends the State Universities Article of the Illinois Pension Code. Provides that the System shall require that the deferred compensation recordkeeper agree that, in performing services with respect to the deferred compensation plan, the recordkeeper: (i) will not use information received as a result of providing services with respect to the deferred compensation plan or the participants in the deferred compensation plan to solicit the participants in the deferred compensation plan for the purpose of cross-selling nonplan products and services, unless in response to a request by a participant in the deferred compensation plan or a request by the System (currently, a request by a participant in the deferred compensation plan); and (ii) will not promote, recommend, endorse, or solicit participants in the deferred compensation plan to purchase any financial products or services outside of the deferred compensation plan, except that links to parts of the recordkeeper's or the recordkeeper's affiliate's (currently, recordkeeper's) website that are generally available to the public, are about commercial products, and may be encountered by a participant in the regular course of navigating the recordkeeper's or the recordkeeper's affiliate's website (currently, recordkeeper's) does not constitute a violation of the prohibition. Amends the University Employees Custodial Accounts Act. Makes similar changes. In a provision prohibiting a defined contribution plan recordkeeper from promoting credit cards, life insurance, or banking products, provides an exception if a request to provide those products is made by the governing board of the public institution of higher education or its authorized delegate. Effective immediately.
4343 LRB103 37547 RPS 67671 b LRB103 37547 RPS 67671 b
4444 LRB103 37547 RPS 67671 b
4545 A BILL FOR
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7171 1 employee and optional employer contributions into an account
7272 2 for each participant and shall offer investment options to the
7373 3 participant. The plan under this Section shall be operated in
7474 4 full compliance with any applicable State and federal laws,
7575 5 and the System shall utilize generally accepted practices in
7676 6 creating and maintaining the plan for the best interest of the
7777 7 participants. In administering the deferred compensation plan,
7878 8 the System shall require that the deferred compensation plan
7979 9 recordkeeper agree that, in performing services with respect
8080 10 to the deferred compensation plan, the recordkeeper: (i) will
8181 11 not use information received as a result of providing services
8282 12 with respect to the deferred compensation plan or the
8383 13 participants in the deferred compensation plan to solicit the
8484 14 participants in the deferred compensation plan for the purpose
8585 15 of cross-selling nonplan products and services, unless in
8686 16 response to a request by a participant in the deferred
8787 17 compensation plan or a request by the System; and (ii) will not
8888 18 promote, recommend, endorse, or solicit participants in the
8989 19 deferred compensation plan to purchase any financial products
9090 20 or services outside of the deferred compensation plan, except
9191 21 that links to parts of the recordkeeper's or the
9292 22 recordkeeper's affiliate's website that are generally
9393 23 available to the public, are about commercial products, and
9494 24 may be encountered by a participant in the regular course of
9595 25 navigating the recordkeeper's or the recordkeeper's
9696 26 affiliate's website will not constitute a violation of this
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107107 1 item (ii). The System may use funds from the employee and
108108 2 employer contributions to defray any and all costs of creating
109109 3 and maintaining the plan. The System shall produce an annual
110110 4 report on the participation in the plan and shall make the
111111 5 report public.
112112 6 (b) The System shall automatically enroll in the eligible
113113 7 deferred compensation plan any employee of an eligible
114114 8 employer who first becomes a participating employee of the
115115 9 System on or after July 1, 2023 under an eligible automatic
116116 10 contribution arrangement that is subject to Section 414(w) of
117117 11 the Internal Revenue Code of 1986, as amended, and the United
118118 12 States Department of Treasury regulations promulgated
119119 13 thereunder. An employee who is automatically enrolled under
120120 14 this subsection (b) shall have 3% of his or her compensation,
121121 15 as defined by the plan, for each pay period deferred on a
122122 16 pre-tax basis into his or her account, subject to any
123123 17 contribution limits applicable to the plan. The Board may
124124 18 increase the default percentage of compensation deferred under
125125 19 this subsection (b).
126126 20 An employee shall have 30 days from the date on which the
127127 21 System provides the notice required under Section 414(w) of
128128 22 the Internal Revenue Code of 1986, as amended, to elect to not
129129 23 participate in the eligible deferred compensation plan or to
130130 24 elect to increase or reduce the initial amount of elective
131131 25 deferrals made to the plan. In the absence of such affirmative
132132 26 election, the employee shall be automatically enrolled in the
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143143 1 plan on the first day of the calendar month, or as soon as
144144 2 administratively practicable thereafter, following the 30th
145145 3 day from the date on which the System provides the required
146146 4 notice. An employee who has been automatically enrolled in the
147147 5 plan under this subsection (b) may elect, within 90 days of
148148 6 enrollment, to withdraw from the plan and receive a refund of
149149 7 amounts deferred, adjusted by applicable earnings and fees. An
150150 8 employee making such an election shall forfeit all employer
151151 9 matching contributions, if any, made with respect to such
152152 10 refunded elective deferrals and such forfeited amounts shall
153153 11 be used to defray plan expenses. Any refunded elective
154154 12 deferrals shall be included in the employee's gross income for
155155 13 the taxable year in which the refund is issued.
156156 14 (c) The System may provide for one or more automatic
157157 15 contribution arrangements, which shall comply with all
158158 16 applicable Internal Revenue Service rules and regulations, in
159159 17 conjunction with or in lieu of the eligible automatic
160160 18 contribution arrangement under subsection (b), for
161161 19 participating employees of eligible employers whose annual
162162 20 earnings are limited by application of subsection (b) of
163163 21 Section 15-111 of this Code. The amount of elective deferrals
164164 22 made for the employee each pay period under an automatic
165165 23 contribution arrangement shall equal the default percentage
166166 24 specified by resolution of the Board multiplied by the
167167 25 employee's compensation as defined by the plan, subject to any
168168 26 contribution limits applicable to the plan, and shall be made
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179179 1 on a pre-tax basis. An employee subject to this subsection (c)
180180 2 shall have 30 days from the date on which the System provides
181181 3 written notice to the employee to elect to not participate in
182182 4 the eligible deferred compensation plan or to elect to
183183 5 increase or reduce the amount of initial elective deferrals
184184 6 made to the plan. In the absence of such affirmative election,
185185 7 the employee shall be automatically enrolled in the plan
186186 8 beginning the first day of the calendar month, or as soon as
187187 9 administratively practicable thereafter, following the 30th
188188 10 day from the date on which the System provides the required
189189 11 notice.
190190 12 (d) The System may provide that the default percentage for
191191 13 any employee automatically enrolled in the eligible deferred
192192 14 compensation plan under subsection (b) or (c) be increased by
193193 15 a specified percentage each plan year after the plan year in
194194 16 which the employee is automatically enrolled in the plan. The
195195 17 amount of automatic annual increases in any plan year shall
196196 18 not exceed 1% of compensation as defined by the plan.
197197 19 (e) The changes made to this Section by this amendatory
198198 20 Act of the 102nd General Assembly are corrections of existing
199199 21 law and are intended to be retroactive to the effective date of
200200 22 Public Act 100-769, notwithstanding Section 1-103.1 of this
201201 23 Code.
202202 24 (Source: P.A. 102-540, eff. 8-20-21; 103-552, eff. 8-11-23.)
203203 25 Section 10. The University Employees Custodial Accounts
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214214 1 Act is amended by changing Section 2 as follows:
215215 2 (110 ILCS 95/2) (from Ch. 144, par. 1702)
216216 3 Sec. 2. The governing board of any public institution of
217217 4 higher education has the power to establish a defined
218218 5 contribution plan to make payments to custodial accounts for
219219 6 investment in regulated investment company stock to provide
220220 7 retirement benefits as described in Section 403(b)(7) of the
221221 8 Internal Revenue Code for eligible employees of such
222222 9 institutions. Such payments shall be made with funds made
223223 10 available by deductions from or reductions in salary or wages
224224 11 of eligible employees who authorize in writing deductions or
225225 12 reductions for such purpose. Such stock shall be purchased
226226 13 only from persons authorized to sell such stock in this State.
227227 14 In administering the defined contribution plan, the
228228 15 governing board of any public institution of higher education
229229 16 shall require that the defined contribution plan recordkeeper
230230 17 agree that, in performing services with respect to the defined
231231 18 contribution plan, the recordkeeper: (i) will not use
232232 19 information received as a result of providing services with
233233 20 respect to the defined contribution plan or the participants
234234 21 in the defined contribution plan to solicit the participants
235235 22 in the defined contribution plan for the purpose of
236236 23 cross-selling nonplan products and services, unless in
237237 24 response to a request by a participant in the defined
238238 25 contribution plan or a request by the governing board of the
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249249 1 public institution of higher education or its authorized
250250 2 delegate; and (ii) will not promote, recommend, endorse, or
251251 3 solicit participants in the defined contribution plan to
252252 4 purchase any financial products or services outside of the
253253 5 defined contribution plan, except that links to parts of the
254254 6 recordkeeper's or the recordkeeper's affiliate's website that
255255 7 are generally available to the public, are about commercial
256256 8 products, and may be encountered by a participant in the
257257 9 regular course of navigating the recordkeeper's or the
258258 10 recordkeeper's affiliate's website will not constitute a
259259 11 violation of this item (ii). However, a public institution of
260260 12 higher education may allow promotion of limited services if
261261 13 the public institution of higher education receives no
262262 14 compensation from the recordkeeper for promoting or providing
263263 15 such services. Such limited services may include educational,
264264 16 counseling, debt reduction, student loan repayment or
265265 17 forgiveness, or other services intended to enhance retirement
266266 18 savings opportunities. Such limited services may not include
267267 19 credit cards, life insurance, or banking products, unless a
268268 20 request to provide those products is made by the governing
269269 21 board of the public institution of higher education or its
270270 22 authorized delegate.
271271 23 (Source: P.A. 103-552, eff. 8-11-23.)
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