Section 6 - IMRF

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Member Accounts / Past Service / Employer Resolutions / SECTION 6 Illinois Municipal Retirement Fund More than one successor unit of government The dissolving employer must provide the ERI Cost Study to each successor, and a majority of the successors must approve the ERI. Copies of the successor units’ resolutions approving the ERI must be available to IMRF upon request. No successor unit of government and the law does not specify responsibility for the IMRF assets and obligations The IMRF Board of Trustees must approve the ERI. IMRF will not implement an ERI that does not conform to these requirements. If IMRF discovers that these requirements were not met after paying an ERI enhanced pension to a member who retired under ERI: The member will lose the ERI enhancements and be required to pay IMRF the difference between the ERI enhanced pension and the pension he or she would have received without the ERI—less the amount the member paid for the ERI. In addition, if the member was less than the minimum retirement age (age 50 for SLEP, age 55 for Regular Tier 1 and ECO Tier 1, age 62 for Regular Tier 2 ), the member will be required to repay IMRF for all pension payments received that he or she was not eligible for—less the amount the member paid for the ERI. 6.60 I. To Adopt Amortization Period for IMRF Early Retirement Incentive (Form 6.78, Exhibit 6LL) Once a unit of government adopts the IMRF Early Retirement Incentive (ERI), an amortization period of 10 years (to pay the employer costs) is assumed. If an employer would like an amortization period of less than 10 years, it would submit IMRF Form 6.78, “Resolution - To Adopt Amortization Period,” doing so. Refer to Paragraph 5.20 C. IMRF Early Retirement Incentive (ERI) for more information on the IMRF ERI or to Paragraph 7.23 Financing the Cost of IMRF Early Retirement Incentive (ERI) for information on financing ERI pensions. 6.60 J. To Authorize Pension Service Credit for Employees Previously Barred by Age (Form 6.79, Exhibit 6MM) Form 6.79, Suggested Resolution to Authorize Pension Service Credit for Employees Previously Barred by Age, has been discontinued. 6.60 K. To Adopt Alternative Benefit Program for County Officers (ECO) The Elected County Official (ECO) Plan is closed to new members as of August 8, 2011. Counties may no longer adopt the ECO plan. 6.60 M. For Employer Pick-Up (Payment) of Member Contributions Required for Purchase of Extra Service Under the IMRF ERI (Form 6.85, Exhibit 6RR) If a unit of government adopts the IMRF Early Retirement Incentive (ERI), the unit may also choose to pay the member cost for the ERI. However, that payment will be taxable to the member unless the governing body passes a resolution (IMRF Form 6.85, “Resolution - For Employer Pick Up of Member Contributions”) specifically stating that the contributions are being made in lieu of the member’s contributions and that the member is prohibited from receiving any part of those contributions. IMRF is not suggesting that an employer pay the member’s ERI costs. This information is provided in the event such action is considered. If the employer does not pass the “pick-up” resolution, the employer payment of the member’s ERI contributions will be taxable income to the member in the year it is paid and must be included on the member’s W-2. Page 262 January 2014
Illinois Municipal Retirement Fund Member Accounts / Past Service / Employer Resolutions / SECTION 6 If the pick-up resolution is passed, the payment will not be taxable when paid. In either case, the payment is not considered IMRF earnings or Social Security wages. PLEASE NOTE: employer cost savings, which would result from adopting the ERI, will be reduced significantly if an employer pays the member cost. 6.60 N. To Adopt the IMRF Sheriff’s Law Enforcement Personnel Program for Airport Police (Form 1.55, Exhibit 6SS) An airport authority may elect to allow its airport police to become SLEP by having its governing board adopt an irrevocable resolution (Form 1.55) authorizing its airport police to be reported as SLEP members. There is no requirement that an airport authority allow its police officers to join SLEP. However, once the SLEP plan has been adopted for airport police, it cannot be rescinded. The airport police officers would join IMRF SLEP prospectively. Airport police joining SLEP will retain their Regular IMRF service credit and start with no credit towards a SLEP pension. As SLEP members, the police officers would be eligible to convert up to 10 years of Regular plan service credit to SLEP if enrolled before August 8, 2011. Members who join the SLEP plan on or after August 8, 2011 are not eligible to upgrade Regular service credit to SLEP. If the resolution is adopted, the following airport police officers would participate in IMRF SLEP: 1. Airport police officers not eligible to participate in a local police pension plan, and 2. Officers performing police duties at an airport on a full-time basis. Airport police working less than full-time will remain Regular IMRF members SLEP participation would begin on the date specified in the resolution. For the first two years, the employer rate for SLEP participants will be based on the normal cost for the SLEP program plus death and disability contributions as well as supplemental benefit contributions. The rates can be found in IMRF’s Annual Financial Report. 6.60 O. To Include Taxable Expense Allowances as IMRF Earnings (Form 6.74, Exhibit 6XX) Expense allowances are not included as IMRF earnings, and therefore not reportable to IMRF. However, an employer may elect to include taxable expense allowances in IMRF reportable earnings. The governing body must adopt a resolution to include taxable expense allowances as IMRF earnings by adopting a resolution (Form 6.74, Exhibit 6XX). Non-taxable expense reimbursements are not included as earnings and are not to be reported to IMRF. This is true even if an employer elects to make taxable expense allowances reportable. 6.60 P. To Adopt the IMRF Sheriff’s Law Enforcement Personnel Program for a Forest Preserve District (Form 1.56, Exhibit 6AAA) A Forest Preserve District may elect to allow its personnel to become SLEP by having its governing board adopt an irrevocable resolution (Form 1.56) authorizing its law enforcement officers to be reported as SLEP members. There is no requirement that a Forest Preserve District allow its law enforcement officers to join SLEP. However, once the SLEP plan has been adopted for Forest Preserve District law enforcement officers, it cannot be rescinded. The Forest Preserve District law enforcement officers would join IMRF SLEP prospectively. The officers joining SLEP will retain their Regular IMRF service credit and start with no credit towards a SLEP pension. If any of the officers participated in SLEP with another employer before August 8, 2011, he or she would be eligible to convert up to 10 years of Regular Plan service to SLEP. January 2014 Page 263
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Instructions EXHIBIT 6S Page 1 of 2
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EXPLANATION AND INCOME TAX INFORMAT
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A RESOLUTION RELATING TO PARTICIPAT
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Limitation on Frequency • Employe
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Section 6 - IMRF

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