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SB 1692

LOCAL GOVT RETIREMENT PLANS

104th Regular Session Introduced by Rob Martwick and 1 co-sponsor

Local government and school district 403(b) and 457 plans must comply with Article 1 of the Illinois Pension Code, extending fiduciary, funding, and participant protections to thes

Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 1692

Summary — SB 1692 (Local Government Retirement Plan Responsibility Act) — Illinois (2025)

Overview / Purpose

SB 1692 (Illinois) — the "Local Government Retirement Plan Responsibility Act" — requires that retirement plans offered by units of local government and school districts comply with the substantive provisions of Article 1 (General Provisions) of the Illinois Pension Code. The bill’s intent is to extend the Code’s standards (for example, on fiduciary duties, funding, investments, and participant rights) to certain locally offered retirement plans even when those plans are not formally established under the Pension Code.

Key provisions

  • Short title: Local Government Retirement Plan Responsibility Act.
  • Definition: “Retirement plan” is defined as an eligible plan under Section 457 or Section 403(b) of the Internal Revenue Code.
  • Main requirement (Section 10): Any retirement plan offered by a unit of local government or a school district must comply with the applicable provisions of Article 1 of the Illinois Pension Code — including, but not limited to, rules concerning:
    • fiduciary duties,
    • funding obligations,
    • permissible investments and investment standards,
    • rights and protections for plan participants.
  • Applicability is explicit “regardless of whether the retirement plan is established under the Illinois Pension Code.” (i.e., covers 403(b)/457 plans administered outside the Code framework)

Who or what is affected

  • Units of local government and school districts that sponsor 403(b) or 457 plans.
  • Plan administrators, fiduciaries, investment managers, and vendors serving those plans.
  • Public employees and beneficiaries participating in affected retirement plans.
  • Potentially the municipal/school district legal and finance offices responsible for plan compliance.

Potential impacts

  • Compliance: Local employers may need to modify plan documents, governance, investment policies, and administrative procedures to align with Pension Code requirements.
  • Fiduciary exposure: Local plan fiduciaries could face increased legal responsibilities and potential liability if not compliant.
  • Fiscal effects: Could increase administrative costs (legal, actuarial, investment oversight); if funding or investment rules are interpreted to require additional contributions or changes, that could affect local budgets. No specific fiscal note is provided in the bill text.
  • Participant protections: Likely to strengthen participant rights and oversight for locally administered 403(b)/457 plans.

Procedural status & sponsors (selected)

  • Introduced: Feb. 5, 2025 by Sen. Robert F. Martwick.
  • Referred to Assignments, then to Pensions (assigned 3/12/2025).
  • Do Pass recommendation from Pensions on 3/19/2025.
  • Sponsor/co-sponsor: Sen. Martwick; Sen. Karina Villa added as chief co‑sponsor.
  • No effective date is specified in the bill text.

Notes

  • Multiple different SB 1692 bills exist in other states (e.g., Arizona, Florida) on unrelated topics. This summary addresses the Illinois SB 1692 (Local Government Retirement Plan Responsibility Act).

Compiled from official sources — confirm details with the bill’s official record.

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