Submitted By
Cara Pavlicek, Village Manager
Agenda Item Title
Title
An Overview Presentation of the Illinois Municipal Retirement Fund (IMRF) Early Retirement Incentive (ERI) Program
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Overview
Overview
A brief overview of the IMRF ERI program is being presented. No action is requested at this time. On October 26, 2020, a Special Meeting of the Village Board is scheduled for a full review of the ERI and direction will be requested at that time.
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Anticipated Future Actions/Commitments
A Special Meeting of the Village Board is scheduled for October 26, 2020 at which time a discussion of the ERI program is scheduled. The timing of this discussion is tied to the consideration of the Recommended FY21 Budget. The Budget does not at this time consider the financial impact of an ERI program.
Body
Report
The Illinois Municipal Retirement Fund (IMRF) was created in 1939 by the Illinois General Assembly and began operating in 1941 with 5 original employers. Today IMRF serves almost 3,000 employers.
The State requires all municipal employees, excluding sworn police and firefighters, who work more than 1,000 hours per year to participate in IMRF and contribute 4.5% of their salary.
IMRF retirement benefits are paid under a defined benefit plan with fixed member contributions. That is to say, both member contributions and the benefits to be paid are established by state law. The difference between the cost of legislated retirement benefits and member contributions must be paid from either investment earnings or from employer contributions.
Each year, IMRF contracts with an independent actuarial firm which calculates the Village's contribution rate using actuarial assumptions determined by IMRF. This rate, expressed as a percent of participating payroll, determines the employer's contribution. In 2020, the Village's contribution is 8.81% of the employee's salary.
Employees who began working for an IMRF covered employer prior to January 1, 2011 are vest...
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