Public Act 102-0540
 
SB2103 EnrolledLRB102 12567 RPS 17905 b


  
    AN ACT concerning public employee benefits.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  



 
 
    Section 5. The Illinois Pension Code is amended  by 
changing Sections 15-202, 16-204, and 24-102 as follows:
 
    (40 ILCS 5/15-202)
    Sec. 15-202. Optional deferred compensation plan defined 
contribution benefit. 
    (a) As soon as practicable after August 10, 2018 (the 
effective date of Public Act 100-769) this amendatory Act of 
the 100th General Assembly, the System shall offer a deferred 
compensation plan that is eligible under Section 457(b) of the 
Internal Revenue Code of 1986, as amended, defined 
contribution benefit to participating employees active members 
of the System employed by employers described in Section 
15-106 of this Code that qualify as eligible employers under 
Section 457(e)(1)(A) of the Internal Revenue Code of 1986, as 
amended. Such eligible employers shall adopt the plan with an 
effective date no later than September 1, 2021.  Participating 
employees may voluntarily elect to make elective deferrals to 
the eligible deferred compensation plan. Eligible employers 
may make optional employer contributions to the plan on behalf 
of participating employees, which contributions may be 
maintained, increased, reduced, or eliminated at the 
discretion of the employer from plan year to plan year. The 
defined contribution benefit shall be an optional benefit to 
any member who chooses to participate. The plan defined 
contribution benefit shall collect voluntary optional employee 
and optional employer contributions into an account for each 
participant and shall offer investment options to the 
participant. The plan benefit under this Section shall be 
operated in full compliance with any applicable State and 
federal laws, and the System shall utilize generally accepted 
practices in creating and maintaining the plan benefit for the 
best interest of the participants. The System may use funds 
from the employee and employer contributions to defray any and 
all costs of creating and maintaining the plan benefit. The 
System shall produce an annual report on the participation in 
the plan benefit and shall make the report public.

    (b) The System shall automatically enroll in the eligible 
deferred compensation plan any employee of an eligible 
employer who first becomes a participating employee of the 
System on or after July 1, 2023 under an eligible automatic 
contribution arrangement that is subject to Section 414(w) of 
the Internal Revenue Code of 1986, as amended, and the United 
States Department of Treasury regulations promulgated 
thereunder. An employee who is automatically enrolled under 
this subsection (b) shall have 3% of his or her compensation, 
as defined by the plan, for each pay period deferred on a 
pre-tax basis into his or her account, subject to any 
contribution limits applicable to the plan. The Board may 
increase the default percentage of compensation deferred under 
this subsection (b). 
    An employee shall have 30 days from the date on which the 
System provides the notice required under Section 414(w) of 
the Internal Revenue Code of 1986, as amended, to elect to not 
participate in the eligible deferred compensation plan or to 
elect to increase or reduce the initial amount of elective 
deferrals made to the plan. In the absence of such affirmative 
election, the employee shall be automatically enrolled in the 
plan on the first day of the calendar month, or as soon as 
administratively practicable thereafter, following the 30th 
day from the date on which the System provides the required 
notice. An employee who has been automatically enrolled in the 
plan under this subsection (b) may elect, within 90 days of 
enrollment, to withdraw from the plan and receive a refund of 
amounts deferred, adjusted by applicable earnings and fees.  An 
employee making such an election shall forfeit all employer 
matching contributions, if any, made with respect to such 
refunded elective deferrals and such forfeited amounts shall 
be used to defray plan expenses.  Any refunded elective 
deferrals shall be included in the employee's gross income for 
the taxable year in which the refund is issued. 
    (c) The System may provide for one or more automatic 
contribution arrangements, which shall comply with all 
applicable Internal Revenue Service rules and regulations, in 
conjunction with or in lieu of the eligible automatic 
contribution arrangement under subsection (b), for 
participating employees of eligible employers whose annual 
earnings are limited by application of subsection (b) of 
Section 15-111 of this Code.  The amount of elective deferrals 
made for the employee each pay period under an automatic 
contribution arrangement shall equal the default percentage 
specified by resolution of the Board multiplied by the 
employee's compensation as defined by the plan, subject to any 
contribution limits applicable to the plan, and shall be made 
on a pre-tax basis. An employee subject to this subsection (c) 
shall have 30 days from the date on which the System provides 
written notice to the employee to elect to not participate in 
the eligible deferred compensation plan or to elect to 
increase or reduce the amount of initial elective deferrals 
made to the plan. In the absence of such affirmative election, 
the employee shall be automatically enrolled in the plan 
beginning the first day of the calendar month, or as soon as 
administratively practicable thereafter, following the 30th 
day from the date on which the System provides the required 
notice.
    (d) The System may provide that the default percentage for 
any employee automatically enrolled in the eligible deferred 
compensation plan under subsection (b) or (c) be increased by 
a specified percentage each plan year after the plan year in 
which the employee is automatically enrolled in the plan.  The 
amount of automatic annual increases in any plan year shall 
not exceed 1% of compensation as defined by the plan. 
    (e) The changes made to this Section by this amendatory 
Act of the 102nd General Assembly are corrections of existing 
law and are intended to be retroactive to the effective date of 
Public Act 100-769, notwithstanding Section 1-103.1 of this 
Code. 
(Source: P.A. 100-769, eff. 8-10-18.)
 
    (40 ILCS 5/16-204)
    Sec. 16-204. Optional defined contribution benefit. As 
soon as practicable after the effective date of this 
amendatory Act of the 100th General Assembly, the System shall 
offer a defined contribution benefit to active members of the 
System.  The defined contribution benefit shall be an optional 
benefit to any member who chooses to participate.  The defined 
contribution benefit shall collect optional employee and 
optional employer contributions into an account and shall 
offer investment options to the participant.  The benefit under 
this Section shall be operated in full compliance with any 
applicable State and federal laws, and the System shall 
utilize generally accepted practices in creating and 
maintaining the benefit for the best interest of the 
participants.  The System may use funds from the employee and 
employer contributions to defray any and all costs of creating 
and maintaining the benefit.  In addition, the System may use 
funds provided under Section 16-158 of this Code to defray any 
and all costs of creating and maintaining the benefit and then 
shall reimburse those costs from funds received from the 
employee and employer contributions under this Section.  All 
employers must comply with the reporting and administrative 
functions established by the System and are required to 
implement the benefits established under this Section. The 
System shall produce an annual report on the participation in 
the benefit and shall make the report public.

    As soon as is practicable on or after January 1, 2022, the 
System shall automatically enroll any employee who first 
becomes an active member or participant in the System. A 
member automatically enrolled under this Section shall have 3% 
of his or her pre-tax gross compensation for each compensation 
period deferred into his or her deferred compensation account, 
unless the member otherwise instructs the System on forms 
approved by the System. A member may elect, in a manner 
provided for by the System,  to not participate in the defined 
contribution benefit or to increase or reduce the amount of 
pre-tax gross compensation contributed, consistent with State 
or federal law. A member shall be automatically enrolled in 
the benefit beginning the first day of the pay period 
following the member's 30th day of employment. A member who 
has been automatically enrolled in the benefit may elect, 
within 90 days of enrollment, to withdraw from the benefit and 
receive a refund of amounts deferred, plus or minus any 
applicable earnings, investment fees, and administrative fees. 
Any refunded amount shall be included in the member's gross 
income for the taxable year in which the refund is issued.
    On or after January 1, 2023, the System may elect to 
increase the automatic annual contributions under this 
Section. The increase in the rate of contribution, however, 
shall not exceed 2% of a member's pre-tax gross compensation 
per year, and at no time shall any total contribution exceed 
any contribution limits established by State or federal law. 
(Source: P.A. 100-769, eff. 8-10-18.)
 


    (40 ILCS 5/24-102)  (from Ch. 108 1/2, par. 24-102)



    Sec. 24-102. 
As used in this Article, "employee" means any 
person,
including a person elected, appointed or under 
contract, receiving
compensation from the State or a unit of 
local government or school
district for personal services 
rendered, including salaried persons. However, "employee", for 
the purposes of the State Employees Deferred Compensation Plan 
established under Section 24-104, does not include a person 
employed by an employer under Section 15-106 who first becomes 
a participant of the retirement system under Article 15 on or 
after July 1, 2023 unless the person has made an election to 
defer compensation into the State Employees Deferred 
Compensation Plan under a written agreement and the deferral 
election is in effect as of June 30, 2023. A health care 
provider who elects to participate in the State Employees 
Deferred Compensation Plan established under Section 24-104 of 
this Code shall, for purposes of that participation, be deemed 
an "employee" as defined in this Section. 

    As used in this Article, "health care provider" means a 
dentist, physician, optometrist, pharmacist, or podiatric 
physician that participates and receives compensation as a 
provider under the Illinois Public Aid Code, the Children's 
Health Insurance Act, or the Covering ALL KIDS Health 
Insurance Act. 
    As used in this Article, "compensation" includes 
compensation received
in a lump sum for accumulated unused 
vacation, personal leave or sick leave, with the exception of 
health care providers. "Compensation" with respect to health 
care providers is defined under the Illinois Public Aid Code, 
the Children's Health Insurance Act, or the Covering ALL KIDS 
Health Insurance Act.

    Where applicable, in no event shall the total of the 
amount of deferred compensation of an
employee set aside in 
relation to a particular year under the Illinois
State 
Employees Deferred Compensation Plan and the employee's

nondeferred compensation for that year exceed the total annual 
salary or
compensation under the existing salary schedule or 
classification plan
applicable to such employee in such year; 
except that any compensation
received in a lump sum for 
accumulated unused vacation, personal leave or sick
leave 
shall not be included in the calculation of such totals.

(Source: P.A. 98-214, eff. 8-9-13.)

 
    Section 90. The State Mandates Act is amended by adding 
Section 8.45 as follows:
 
    (30 ILCS 805/8.45 new)
    Sec. 8.45. Exempt mandate. Notwithstanding Sections 6 and 
8 of this Act, no reimbursement by the State is required for 
the implementation of any mandate created by this amendatory 
Act of the 102nd General Assembly.
 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.