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91_SB1103eng SB1103 Engrossed LRB9102714EGfg 1 AN ACT to amend the Illinois Pension Code by changing 2 Section 1-113.5. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Pension Code is amended by 6 changing Section 1-113.5 as follows: 7 (40 ILCS 5/1-113.5) 8 Sec. 1-113.5. Investment advisers and investment 9 services. 10 (a) The board of trustees of a pension fund may appoint 11 investment advisers as defined in Section 1-101.4. The board 12 of any pension fund investing in common or preferred stock 13 under Section 1-113.4 shall appoint an investment adviser 14 before making such investments. 15 The investment adviser shall be a fiduciary, as defined 16 in Section 1-101.2, with respect to the pension fund and 17 shall be one of the following: 18 (1) an investment adviser registered under the 19 federal Investment Advisers Act of 1940 who meets any 20 applicable requirements of the Illinois Securities Law of 21 1953 or is registered underandthe Illinois Securities 22 Law of 1953; 23 (2) a bank or trust company authorized to conduct a 24 trust business in Illinois; 25 (3) a life insurance company authorized to transact 26 business in Illinois; or 27 (4) an investment company as defined and registered 28 under the federal Investment Company Act of 1940 and 29 registered under the Illinois Securities Law of 1953. 30 (b) All investment advice and services provided by an 31 investment adviser appointed under this Section shall be SB1103 Engrossed -2- LRB9102714EGfg 1 rendered pursuant to a written contract between the 2 investment adviser and the board, and in accordance with the 3 board's investment policy. 4 The contract shall include all of the following: 5 (1) acknowledgement in writing by the investment 6 adviser that he or she is a fiduciary with respect to the 7 pension fund; 8 (2) the board's investment policy; 9 (3) full disclosure of direct and indirect fees, 10 commissions, penalties, and any other compensation that 11 may be received by the investment adviser, including 12 reimbursement for expenses; and 13 (4) a requirement that the investment adviser 14 submit periodic written reports, on at least a quarterly 15 basis, for the board's review at its regularly scheduled 16 meetings. All returns on investment shall be reported as 17 net returns after payment of all fees, commissions, and 18 any other compensation. 19 (c) Within 30 days after appointing an investment 20 adviser, the board shall submit a copy of the contract to the 21 Department of Insurance. 22 (d) Investment services provided by a person other than 23 an investment adviser appointed under this Section, including 24 but not limited to services provided by the kinds of persons 25 listed in items (1) through (4) of subsection (a), shall be 26 rendered only after full written disclosure of direct and 27 indirect fees, commissions, penalties, and any other 28 compensation that shall or may be received by the person 29 rendering those services. 30 (e) The board of trustees of each pension fund shall 31 retain records of investment transactions in accordance with 32 the rules of the Department of Insurance. 33 (Source: P.A. 90-507, eff. 8-22-97.) SB1103 Engrossed -3- LRB9102714EGfg 1 Section 99. Effective date. This Act takes effect upon 2 becoming law.