Information for units of government considering participation in IMRF

IMRF is created by state law to administer a retirement, death, and disability benefit plan for employees of local governments in Illinois. About 2,900 employers (school districts, cities, villages, counties, townships, and other local governmental units) and more than 175,000 members are covered by the program. IMRF provides pensions to approximately 80,000 retired members. IMRF members are also covered by Social Security. IMRF is not a department of state government.

Detailed information about this process is available in IMRF Bulletin No. 52, "Questions and answers for units of government considering participation." Please read this publication carefully. This booklet will provide you with information about IMRF, such as:

• How IMRF is administered
• What benefits are offered
• How those benefits are financed
• How members earn service credit.

What kind of pension plan is IMRF?

IMRF is a defined benefit plan. The pension benefit is based on a set formula determined by the Illinois Pension Code and guaranteed by the Illinois Constitution. Part of the cost of the retirement benefit is paid by the member’s own contributions and the interest those contributions earn. However, the majority of the cost of the retirement benefit is paid for by the employer’s contributions and the investment earnings of those contributions.

Member benefits of the Regular IMRF Plan are available by reading the plan benefit booklet.

Which units of government participate in IMRF?

All school districts in Illinois (outside the City of Chicago) and all Illinois counties
(except Cook) must participate in IMRF. Certain educational entities are also mandated to participate in IMRF.

Cities, villages, townships, park districts, fire protection districts, sanitary districts and other local districts with general continuous power to levy property taxes may choose to join IMRF. Certain local governmental units without taxing authority also may participate in IMRF. Other non-taxing units of government are not eligible to join IMRF under the current provisions of Illinois law. The list of non-taxing units eligible to participate is found in Section 7-132 of the Pension Code. A non-taxing unit of government which is not on the list is not eligible to participate in IMRF.
The Pension Code requires all departments and instrumentalities of a unit of government to join IMRF as one unit. For example, the village library comes into IMRF with the village. In townships, the township road district and township library come into IMRF with the township. Separate special districts participate on their own.

Once a unit of government joins IMRF, either voluntarily or because it is mandated by law, it cannot withdraw. The Illinois Supreme Court has ruled that a governmental unit, after having properly joined IMRF, does not have a right to terminate participation.

How are employer costs determined?

IMRF consulting actuaries calculate the employer costs and set a contribution rate for each employer. The rate is set at an amount that will allow all benefit costs for each employer’s members to be paid for by employer and member contributions and investment earnings.
The following costs are involved:

• Cost of providing retirement pensions to members when they retire, and
  
• Costs for payment of disability and death benefits and surviving spouse pensions.
  

Employer contributions are calculated as a percentage of the employer’s payroll. Detailed information about how costs are determined, what contribution rates can be expected for a new employer, and what sources of revenue may be used to pay employer contributions can be found in Bulletin no. 51 and in the "How Employer Rates are Calculated" publication. Be sure to read this information carefully.

How does a unit of government join IMRF?

Most governmental units join IMRF voluntarily by action of their governing bodies. Certain educational entities are mandated to participate in IMRF by the Illinois Pension Code. Townships join IMRF by vote of the town electors.

The process of joining IMRF is different for different types of governmental units. However, the process has two main steps:

• An initial application and cost study request, and
• An ordinance or resolution to join IMRF passed by the governing body (in townships, the electors) after review of the cost of participation.
  

All units of government joining IMRF on a voluntary basis must first have a cost study performed by the IMRF actuaries. This study will determine the required employer contributions for the first year. The cost study will help the unit decide whether it can afford IMRF participation.
IMRF will not accept a unit of government if it has not first had a cost study prepared.

The rules for adopting IMRF participation are set by statute. Therefore, IMRF cannot waive them or make exceptions if a unit of government misses a step or makes a mistake. Please make sure to contact us before taking any steps to join IMRF.

A unit of government attempting to join IMRF must precisely follow the required procedures. Once you start the process with IMRF, you will receive a step by step instruction sheet assistance in the process of joining IMRF.

For more information

Contact IMRF New Account Representative Carla Bermes for more detailed information about joining IMRF. She can be reached at 1-800-ASK-IMRF (1-800-275-4673) or directly at (630)706-4203.You can also connect with IMRF online.