IMRF Pension Reform Bill Sent to the Governor
UPDATED Reform Bill Signed. Article linked.
Senate Bill 1831, a bill that would, among other modifications, change the way the pension code treats Illinois Municipal Retirement Fund (IMRF) pension payments has passed both the Illinois House and Senate and has been sent to the governor for his signature. It is yet unclear whether or not the governor will sign the bill.
In addition to other changes, the legislation would require that if participating employees’ reported earnings for any of the 12-month periods used to determine the final rate of earnings with the same employer for the previous year exceed 106% of the previous year’s salary or if the increase is 1.5 times the annual increase in the Consumer Price Index-U (CPIU), the employer paying those earnings will pay to the fund (in addition to any other contributions required), the present value of the increase in the pension resulting from the portion of the increase in salary in excess of 106% or 1.5 times the annual increase in the CPIU. Pension calculable 12-month periods vary depending on a wide array of circumstances.
If a contribution is owed to IMRF, the District will owe a lump sum covering the bill for the predicted overage within 90 days of receipt of the bill from IMRF. Otherwise, IMRF is authorized to charge interest equal to IMRF’s annual actuarially assumed rate of return on investment annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after receipt of the bill by the employer.
It is noteworthy that overtime or overload work is explicitly excluded from the bill, as are increases resulting from overload or overtime earnings.
The bill has not yet been signed by the governor, and there is no indication at this time as to whether or not the bill will become law. It is also unclear at this time how regulations would affect the interpretation of the changes to the code.
Miller, Tracy, Braun, Funk & Miller, Ltd. is tracking this bill, and we will keep you posted on developments as we learn of them.