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IL SB1747

IL SB1747
PEN CD-TRS-457 PLANS


summary

Introduced
02/05/2025
In Committee
02/05/2025
Crossed Over
Passed
Dead

Introduced Session

104th General Assembly

Bill Summary

Amends the Downstate Teacher Article of the Illinois Pension Code. Provides that school districts that offer a 457(b) plan through a single vendor may use their single-vendor plan to satisfy the requirements of Public Act 102-540. Limits the number of school districts that may use their single-vendor plan to 10% of school districts statewide. Sets forth requirements for a single-vendor plan. Provides that when choosing a single vendor for the pilot program, the overriding consideration with respect to all decisions made by the plan sponsor concerning the plan is that the decisions be made solely in the best interests of the plan's participants and beneficiaries. Sets forth other requirements for the single-vendor plan. Provides that no vendor may offer a plan under the provisions if an individual employed by, compensated by, or working for that vendor offers or gives anything of value to any employee who participates in the selection of the 457(b) plan vendor in the school district. Provides that an employee who participates in the selection of the single vendor must avoid outside business interests with any vendor chosen or under consideration for being chosen for the school district; disclose all outside business interests with a vendor chosen or under consideration for being chosen for the school district; not accept any gifts, preferential treatment, or benefits that might affect or appear to affect his or her ability to make sound judgments on selection of a vendor; act honestly and ethically in the best interests of the plan participants in all dealings with chosen vendor; and not obtain employment with any vendor chosen or in consideration for being chosen to offer a plan at the school district for the duration of an interested party's employment or involvement with the school district for a period of one year thereafter. Specifies that the provisions are inoperable on and after January 1, 2031.

AI Summary

This bill amends the Illinois Pension Code to establish a pilot program for school districts offering 457(b) plans (a type of tax-advantaged deferred compensation retirement plan) through a single vendor. The bill limits participation to 10% of school districts statewide and sets strict guidelines for implementing these plans. Key provisions include prohibiting surrender charges and annuities, allowing participants to transfer funds without cost, and implementing rigorous ethical standards for vendor selection. The bill requires that any employee involved in selecting a vendor must avoid conflicts of interest, disclose outside business relationships, refuse gifts or preferential treatment, and act solely in the best interests of plan participants. Vendors are barred from offering anything of value to employees involved in vendor selection, and an interested party (defined as an employee, school board representative, or their immediate family) cannot have a financial interest in the plan beyond being a standard participant. These provisions are set to be inoperable after January 1, 2031, effectively making this a time-limited pilot program designed to test a specific approach to managing 457(b) retirement plans in school districts.

Sponsors (1)

Last Action

Referred to Assignments (on 02/05/2025)

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