IVCA clarifying amendment to pension fund reform law passes General Assembly … read more

IVCA clarifying amendment to pension fund reform law passes General Assembly … read more

February 2, 2011

In 2009 the Illinois General Assembly passed, and the Governor signed into law (Public Act 98-0006), a series of ethics reforms governing public pension funds in Illinois. IVCA supported the legislation which is designed to make the investment selection process more objective, competitive, transparent and performance based.

However, the law also included a provision that in effect required the pension funds to use the Illinois Procurement Code or a process substantially similar to the Code when making investments in fund of funds. IVCA believed that this unworkable provision was an unintended consequence of efforts to require a more objective process for the pension funds' selection of investment consultants and advisors, something the IVCA strongly supports.

To remove this unintended requirement, IVCA proposed amending the law to treat all investments made by the public pension funds equally. IVCA worked closely with Senator Don Harmon to have the amendment introduced as a stand-alone bill, SB 3162, which was passed by the Senate in March 2010 by a vote of 52-0. The bill reiterated that those individuals or firms who provide personalized investment advice to the pension funds regarding their investment portfolios shall be selected through the Illinois procurement code (or in a manner substantially similar to it), while clarifying that all investments made by the pension funds (including investments in fund of funds) shall be made in a similar and equal manner.

In the House, IVCA worked closely with Deputy Majority Leader Lou Lang to garner understanding of and support for the bill. In January 2011 during the last days of the veto session, the House passed our amendment as apart of a much larger legislative package of budget and other misc items (SB 3087). It is now awaiting the Governor's signature which is expected.

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