IMRF Achieves Fully Funded Status
Second Year In A Row

— Illinois Municipal Retirement Fund 100 percent funding goal
results in guaranteed benefits and lower long-term taxpayer cost —

OAK BROOK, Ill. – April 14, 2008 – The Illinois Municipal Retirement Fund (IMRF) today announced that it was 100 percent funded on a market value basis at the end of 2007, according to current estimates. This marks the second year in a row that IMRF was the only major public pension in Illinois to achieve this funding level.

During a time when Illinois public pensions are facing increasing scrutiny, this achievement further differentiates IMRF as a well-managed, well-funded public pension system. IMRF provides death, disability and retirement benefits to Illinois municipal government workers.

The announcement is good news not only for IMRF members, but for taxpayers as well, because working toward 100 percent funding allows IMRF to maximize investment gains and provide benefits at the lowest possible long-term cost. Additionally, a solid defined benefit pension like IMRF helps employers attract and retain qualified workers who provide vital taxpayer services.

IMRF's success can be attributed partially to its highly diversified investment portfolio. Equally important is the ability of its independent board of trustees to set and collect employer contribution rates based on sound actuarial principles. This maximizes IMRF's assets and enables it to earn the best possible returns in the market. During 2007 IMRF saw an estimated market value investment return of 8.5 percent.

“Our 100 percent funding goal and disciplined funding method for each of our 2,900 employers is critical to our success,” said Louis Kosiba, executive director of IMRF. “As a result, our members can rest assured that the money for their pension will be there when they retire.”

IMRF's actuarial return, which uses a five-year averaging technique to minimize large fluctuations in employer contributions, was 8.9 percent in 2007. As a result, the average employer rate for IMRF's Regular plan dropped from 9.72 percent in 2007 to 9.47 percent in 2008 and will drop to 9.27 percent in 2009 -- a 45 basis point reduction over two years. On a preliminary basis, 66.6 percent of IMRF's 2007 revenue came from investment income, while only 11 percent came from employee contributions and 22.4 percent from employer contributions.

“Systematic underfunding of defined benefit pension plans leads to higher employer contribution rates,” Kosiba said. “Pre-funding helps lower employers’ cost, which translates to lower taxpayer cost over the long term. It also ensures transparency of the full cost of benefits and intergenerational equity.”

About IMRF
The IMRF was created in 1939 by the Illinois General Assembly to provide death, disability and retirement benefits for employees of local units of government. Today, IMRF has more than 177,000 active members working for over 2,900 different units of government, including school districts, counties, cities and villages, parks and libraries. It has more than 87,000 retirees receiving an average monthly benefit of $833. At December 31, 2007, it is estimated that IMRF had more than $24 billion in assets and was 100 percent funded on a market value basis.

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