Illinois Senate Bill SB1747

Illinois 2025-2026 Regular Session

• Introduced: 2/5/25
• Refer: 2/5/25

Caption

PEN CD-TRS-457 PLANS

Summary

SB1747 amends the Downstate Teacher Article of the Illinois Pension Code to create a limited pilot framework for school districts that offer a 457(b) deferred compensation plan through a single vendor. Under the bill, qualifying districts may use a local single-vendor plan to satisfy requirements established by Public Act 102-540, but only if the plan meets specified conditions. Those conditions include no surrender charges, no annuities, and a requirement that participants be able to transfer or roll over funds to the supplemental savings plan offered by the system without cost and at the employee’s direction. The bill also imposes governance and ethics rules on the selection and administration of the vendor. The plan sponsor must make decisions solely in the best interests of participants and beneficiaries, and no more than 10% of school districts statewide may participate. Employees involved in selecting the vendor must avoid outside business interests with vendors under consideration, disclose such interests, refrain from accepting gifts or preferential treatment, act ethically in participants’ best interests, and avoid employment with the selected vendor during their involvement and for one year afterward. The bill further bars vendors from offering a plan if they provide anything of value to employees involved in vendor selection. The pilot authority sunsets on January 1, 2031. The bill’s impact is to add a new Section 16-207 to the Illinois Pension Code and create a temporary exception for certain school districts using single-vendor 457(b) plans. It would affect school districts, school boards, bargaining representatives, plan vendors, and employees participating in vendor selection by setting uniform standards for plan design, fiduciary decision-making, and conflict-of-interest restrictions. It also ties local plan compliance to the requirements of Public Act 102-540, while preserving a limited pilot structure rather than a permanent statewide change. Because there are no committee transcripts or recorded votes provided, there is no documented debate or formal vote history to gauge legislative sentiment. Based on the bill text alone, the measure appears to be framed as a consumer-protection and ethics bill for retirement plan administration, suggesting a generally cautious, oversight-oriented approach rather than a controversial expansion of benefits. The absence of recorded opposition or support in the supplied materials means any assessment of sentiment is limited to the bill’s structure and stated safeguards. The main points of potential contention are likely to be the restriction to a single vendor, the 10% statewide cap, and the detailed conflict-of-interest rules governing school district employees and vendors. School districts or vendors that prefer broader flexibility may view the pilot limits and compliance requirements as burdensome, while supporters may see them as necessary to prevent self-dealing and protect plan participants. The temporary nature of the pilot and the prohibition on gifts or outside business relationships indicate that the bill is designed to address procurement integrity concerns in the 457(b) market.

Impact

SB1747 would add a new Section 16-207 to the Illinois Pension Code, creating a temporary pilot program for certain school districts to satisfy Public Act 102-540 through a single-vendor 457(b) plan. It would regulate plan design, vendor selection, and conflicts of interest, and it would sunset on January 1, 2031. The bill would directly affect school districts, school board members, district employees involved in vendor selection, and 457(b) plan vendors.

Sentiment

No committee transcripts or vote records were provided, so there is no documented legislative debate or roll-call evidence to measure support or opposition. On its face, the bill is structured as a narrowly tailored, ethics-focused pilot program, which suggests a generally cautious and protective policy approach. The text emphasizes participant protection, fiduciary duty, and anti-corruption safeguards rather than expansion of benefits or major policy change.

Contention

The likely areas of contention are the bill’s limits on participation and vendor choice, especially the cap allowing no more than 10% of school districts statewide to use the single-vendor model. Vendors and districts may also object to the strict conflict-of-interest rules, gift bans, disclosure obligations, and post-involvement employment restrictions for employees involved in selecting the vendor. Supporters would likely argue these provisions are necessary to ensure decisions are made solely in participants’ best interests and to prevent improper influence in the selection process.