Friday, January 11, 2019
Welcome to Employer Digest, your monthly source for IMRF news and information to help you stay connected with IMRF.
Effects of Assumed Rate of Return Reduction on IMRF Employer and Members
Please forward this email to your chief financial officer and the senior member of your governing body.
In December 2018, the IMRF Board of Trustees reduced the return it assumes it will earn on IMRF's investment portfolio from 7.5% to 7.25%. This change affects IMRF employers and members in certain ways.


Each year, IMRF calculates a contribution rate for each IMRF employer. A significant factor in the contribution rate calculation is the assumed rate of return on investments. Since the return assumption is decreasing slightly, employer contribution rates will increase slightly in 2020. IMRF estimates the average employer contribution rate in 2020 will range between 10.15% and 10.65% of payroll. This estimate is higher than the 2019 average employer contribution rate of 9.06%, but lower than the 2018 rate of 11.24%. Each employer’s actual rate will vary based on its IMRF assets, liabilities, and workforce demographics.

While the assumption change won’t effect employer rates until 2020, it will effect multiple financial planning, accounting, and reporting calculations involving IMRF employer accounts in 2019. In addition to the employer rate calculation, the assumption change also effects the calculation of each employer’s unfunded liabilities, and as a result, the calculation of its funded status. The calculation changes will be reflected in employers’ 2019 GASB 50 statement, GASB 68 statement, Preliminary Rate Notice, and Final Rate Notice.


IMRF members may make voluntary additional contributions (VAC) to supplement their standard IMRF pension. Interest paid on VAC is linked to the IMRF assumed rate of return. Therefore, a decrease to the assumed rate of return lowers the rate of interest earned on VAC. IMRF credits VAC interest on December 31 each year, based on the VAC in the member's account on January 1 of the same year. Interest credited on December 31, 2018, was 7.5%, but due to the assumed rate of return change, interest credited on December 31, 2019, will be 7.25%. IMRF will inform members with VAC on file of the interest rate change.

Additionally, in certain circumstances, members may purchase IMRF past service credit. When members purchase additional past service credit, interest is included in calculating the amount owed. The amount of interest paid it linked to the assumed rate of return. As a result, an interest rate of 7.25% will be charged on past service purchases for service starting January 1, 2019, or later.

Read more about the effects of the assumed rate of return reduction on IMRF employers and members here.
Important IMRF Documents Available in 2019
In 2019, IMRF employers will receive six key documents with information necessary for financial planning, accounting, and reporting purposes. The documents will be located in the "Display Annual Documents" section under "Documents" in Employer Access.

  • The Employer Reserve Account Statement (to release February 2019) provides accounting of your employer's IMRF assets for 2018. It reports the opening balance on January 1, 2018, the closing balance on December 31, 2018, investment earnings, interest charges, charges for employee retirements, and credits for contributions made to IMRF.

  • Employer copies of member statements (to release February 2019) are for your employer's records and provide summaries of your IMRF members' accounts for 2018.

  • The Preliminary Rate Notice (to release April 2019) provides your employer's estimated contribution rate for 2020.

  • The GASB 50 and GASB 68 statements (to release April 2019) provide the funded status of your IMRF plan(s) as of December 31, 2018. One or both of these statements are needed to complete your employer's financial statements.

  • The Final Rate Notice (to release November 2019) provides your employer's actual contribution rate for 2020.

IMRF will notify employers via secure messages and Employer Digest when documents become available. If you have questions about the document schedule, contact IMRF's exclusive, employer-only phone number, 1-800-728-7971.
Please Complete Employer Survey by January 22
Earlier this week, Authorized Agents and Web Assistants received IMRF's 2018 Fourth Quarter Employer Survey. Please complete the survey by Tuesday, January 22. The survey asks about your general experience with IMRF and any ideas you have for improvements to our employer services.

IMRF actively seeks employer feedback to help us improve the services we provide. Over the last year, we have made several changes based on employer input, such as:

  • Changing Employer Digest from a bi-monthly to a monthly e-newsletter, and redesigning the publication to be more modern and easier to read.
  • Updating hold messages on the employer-only phone line to make the information more clear.
  • Adding the employer-only phone number to the public website for easier accessibility.
  • Reviewing calls to the employer-only phone line to improve the quality of answers and ensure employers receive more accurate information.

Thank you for providing your feedback through our quarterly employer surveys. If you have any questions about the survey, please contact us at 1-800-728-7971.
Termination Notices Reminder
Did you know you can submit termination notices to IMRF with a future date? IMRF employers are encouraged to submit IMRF Form 6.41, "Termination of IMRF Participation" (available in Employer Access) as soon as the termination date is known. It is important for this form to be completed as early as possible with the correct termination date to avoid payment issues to members following termination. Employers may also make revisions to IMRF Form 6.41 after it is submitted, if necessary.

If you have any questions about submitting termination notices to IMRF, contact us at 1-800-728-7971.
December 2018 Board Meeting Highlights
On Friday, December 14, 2018, the IMRF Board of Trustees:

  • Certified the 2018 Executive Trustee election results
  • Appointed the 2019 Board officers
  • Reduced the assumed rate of return

You can read the full December 2018 Board Meeting Highlights here. The next regular meeting of the Board will be Friday, February 15, at 9 AM at IMRF's Oak Brook office.
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