As the sponsor of a defined benefit pension, your employer bears the risks of the IMRF investment portfolio. When IMRF fails to earn its assumed rate of return of 7.25%, like in 2022, the difference is drawn from IMRF Employer Reserve accounts. As a result, the average IMRF employer saw a (48.5)% decrease in its Employer Reserve account. But why was this average decrease so substantial if IMRF only lost (12.8)% in 2022? To explain, it's important to first understand that the 2022 market loss does not correlate directly to the residual impact on employer reserves. 

The residual amount is the difference between how much IMRF’s investments actually earned and the 7.25% interest granted on the opening balances of reserve accounts plus 0.5% for operating costs.

The reported market investment rate of return does not consider the 7.25% IMRF expected to make for the year. In good years, the residual percent will always be less than the investment return and in bad years, the residual percent will be more negative. 

The residual calculation takes into account the annuitant reserve and the employer reserve. When you add these amounts together, the result is (23)% for all employers.

Additional information

See more details, including an example, at imrf.org.

IMRF does not "pay out" on unused, unpaid sick days from IMRF employers. Instead, IMRF members can convert unused/unpaid sick time they have with their employer when they retire. These days can add service credit, which may increase their monthly pension payments. 

Service credit is the member’s total time under IMRF, stated in years and months, and it is used along with the Final Rate of Earnings (FRE) to determine the amount of each member’s pension. The more service credit members have, the larger their pension amount will be. 

For more information

For details, select the member’s specific plan below:

• Regular Plan Tier 1
• Regular Plan Tier 2
• SLEP Plan Tier 1
• SLEP Plan Tier 2
• Original ECO Plan
• Revised Tier 1 ECO Plan

Independent contractors are not eligible to participate in IMRF. An IMRF employer cannot simply designate an employee as an independent contractor. A worker is either an employee or an independent contractor based on the facts of the relationship between the employer and the worker.

There are specific characteristics of an independent contractor that employers need to consider before classifying a worker as such. Employers are encouraged to review Section 3.10A (schools) and Section 3.60A (others) of the Manual for Authorized Agents to help determine and classify an independent contractor.

On Friday, February 3, 2023, the IMRF Board of Trustees:

• Approved the 2024 death and disability rates
• Reviewed the 2020-2022 Strategic Plan’s key accomplishments
• Passed Board Resolution 2023-02-05(b), which updates IMRF’s plan administration policies to align with current tax law, including the required minimum distribution age.
• Approved the participation of two new employers

Additional information

You can read the full report in the February 2023 Board Meeting Highlights. See the 2023 Board schedule here.

The next Board meeting will be held Friday, March 31, at 9 AM.

We offer these online webinars for Authorized Agents to learn more about IMRF procedures and how to administer IMRF. Register today!

March 2023

• Module 1: Introduction, Enrollment, Wage Reporting, and Termination – March 14
• Module 2: IMRF Benefits, Employer Rates, and Legislation – March 28

April 2023

• Module 1: Introduction, Enrollment, Wage Reporting, and Termination – April 11
• Module 2: IMRF Benefits, Employer Rates, and Legislation – April 25

All sessions run 9:00 AM to 10:30 AM.

Webinar structure

This 2-part webinar series prepares IMRF Authorized Agents to perform common IMRF tasks. Note: to receive a completion certificate, you must attend the session live, not watch a recording.

Together, these two 90-minute webinars cover the topics included in the former one-day workshop. Each webinar stands alone, and you can attend them in either order. You are unable to cancel registration from a single module.