IMRF "Penalty" for Compensation Increases; Open Meetings Act Amendment

Public Act 97-0609, which will be fully effective after January 1, 2012, provides for an "accelerated payment" of pension costs which are attributable to compensation increases over the greater of six percent (6%) or 1.5 times the increase in the Consumer Price Index-Urban (CPI-U) for IMRF employees.  If an IMRF employee receives compensation of more than six percent (6%) or 1.5 times the increase in CPI-U in the period used to determine the employee's pension compared to the immediately preceding twelve- (12-) month period, the "accelerated payment" (or penalty) must be paid by the employer at the time the pension is calculated. 

There are certain exceptions that do not count toward the six percent (6%) (or 1.5 times CPI-U), including:  overtime earnings; compensation increases because of promotions resulting in increased responsibility and workload; compensation increases paid pursuant to collective bargaining agreements entered into before January 1, 2012; increases paid to members who are ten (10) years or more from retirement eligibility; increases resulting from an increased number of hours required to be worked; and increases resulting from personnel policies adopted prior to and for employees employed prior to January 1, 2012.

Public Act 97-0609 also amended the Open Meetings Act, effective January 1, 2012, requiring the posting of salary and benefit information for certain employees.  Please note, while the statute describes the duty to post this information "pertaining to benefits offered through the Illinois Municipal Retirement Fund", the IMRF guidance suggests that this requirement applies to all employees of an IMRF employer (regardless of whether they are IMRF employees) who meet the relevant criteria.  However, the Attorney General, and not IMRF, is ultimately responsible for enforcing these changes to the Open Meetings Act.

Each IMRF employer, within six (6) business days after it approves a budget, must post the "total compensation package" for any employee with a total compensation package of more than $75,000 per year on its website.  Also, each IMRF employer, at least six (6) days before approving an employee's total compensation package that is $150,000 per year or more, must post the total compensation package for that employee on its website.  The "total compensation package" includes salary, health insurance, housing allowing, vehicle allowance, clothing allowance, bonuses, loans, vacation days and sick days. 

The statute provides an option to the employer, in lieu of posting on the website, the option of posting a physical copy of the information at its principal office.  If the employer maintains a website, it must post directions on how to access the information if it chooses to post physically rather than electronically.