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2009 Revisions to IMRF's Web-Based
Manual for Authorized Agents

Read the current Web-based Manual for Authorized Agents

Read revisions for:   2010   2008   2007   2005  (none for 2006)

September 2009 (e-Ver. 4.2)

Summary of Key Changes:

  • Introduction section, page titled Retirement Application Check List
  • The following exhibits have been updated: 5F, 6Z, 6ZZ
  • 3.40 H. Earnings of Adult Ed. and Night School teachers updated.
  • 3.80 C. Police Chiefs updated.
  • 3.96 F. Health Insurance updated.
  • 4.24 I. Table showing examples updated.
  • 5.20 B. 5. Unused Sick Leave Service Credit updated.
  • 6.30 To Close an Account updated.
  • 7.00 B. Updated tables.
  • 7.20 D. Cost of financing updated.
  • 7.20 B. Amortization periods updated.
  • 7.20 D. Amortizing overfunded liability updated.
  • 7.21 C. Supplemental benefits dates updated.
  • 7.21 D. Normal retirement contributions percentage updated.
  • 7.21 F. Deleted.
  • 7.22 Employers costs table updated.

Detailed changes:

Section 3

3.80 H. Adult Education and Night School Teachers

Previously, certified teachers' school earnings for adult education and night school classes were reported to TRS. Now those earnings are reported to IMRF under the Regular plan if they meet the 600-hour standard.

3.80 C. Police Chiefs

Second bulleted item updated. See bold text:
Police chiefs with IMRF municipalities that have a police pension plan, but the chief chose not to enroll in the police pension plan when eligible to do so, and did not enroll in SLEP within the first three months of employment.

3.96 F. Non-Cash Earnings, Health Insurance

The following bold text was added:
This also includes policy coverage of dependents up to age 26 (or until 30 if honorably discharged from the military).
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Section 4

4.24 I. Employer-Paid Member Contributions

Table head of 4th column changed to "No Cafeteria Plan or Cafeteria Plan NOT reported as IMRF earnings and Employer pays member contribution
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Section 5

5.20 B. 5. Amount of IMRF Retirement Benefits, Unused and Unpaid Sick Leave Service Credit

Bold text was added: Retiring IMRF members may qualify for a maximum of one year of additional pension service credit for unpaid, unused sick leave accumulated with their last employer. In addition, members retiring from a school district may qualify for a maximum of one year of additional service credit for unused, unpaid sick leave accumulated with any prior school district employers. The effective date of the member’s pension must still be within 60 days of the member’s termination date.
 
Members currently participating with a school district and who have unused, unpaid sick leave with prior school district employer will be required to provide contemporaneous evidence of the unused, unpaid sick leave from previous employers. This means the member must have original documentation from the time period he or she worked for the employer. This includes copies of original payroll information or original paycheck stubs showing earned sick leave. IMRF cannot accept recreated documents or letters of certification.
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Section 6

6.30 To Close an Account

All new bulleted points were added as follows:

Reasons if employment continues but participation status changes:
• Change from an IMRF-covered position to a non-qualifying (Social Security only) position, or
• Move from an IMRF-covered position to a position covered by another Illinois public pension system, or
• Retire while working reduced hours (Member applied for an IMRF pension but will continue working in a non-qualifying position.)
 
Reasons if employment ends:
• Retirement
• Resignation
Member voluntarily resigned the position for other than medical reasons, e.g., accepted a position elsewhere, resigned for personal reasons.
• Resignation medical
Member voluntarily resigned the position for health/medical reasons. (Member voluntarily resigned because he/she is unable to perform the duties of the position because of a medical condition; member is unable to continue working or return to work. A member’s voluntary resignation must be documented by a resignation letter from the member to the employer, or by a letter from the employer to the member acknowledging the voluntary resignation. If the member is receiving IMRF disability benefits or has a pending claim for disability benefits, he/she will no longer be eligible for IMRF disability benefits. Exceptions apply if the member has filed a Workers’ Compensation claim. Refer to Paragraph 5.40 D.5.)
• Dismissal
The employer is terminating the member’s employment for reasons other than a medical condition, e.g., work performance issues, budget cuts.
• Dismissal medical
The employer is terminating the member’s employment for health/medical reasons. (A medical condition prevents the member from performing the duties of his/her position; the member is unable to continue working or return to work. If the member is receiving IMRF disability benefits or has a pending claim for disability benefits, he/she remains eligible for IMRF disability benefits.)
• Death
• Military leave
• Term expired (elected officials only)

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Section 7

7.00 B. Actuarial Assumptions

Percentage values were changed throughout the three tables in this section.

7.20 Financing the Cost of IMRF Pensions

The last sentence was added to this section as follows:
The housing collapse, credit crisis, and downturn in the global economy in 2008 resulted in IMRF suffering a negative 24.8 percent return. This resulted in employer reserve balances being charged with the residual loss.

7.20 B. Amortization Periods

Bold text has changed: For most employers, the unfunded liability is amortized over a 30-year open period beginning in 2010.

7.20 D. Amortization of Overfunded Liability

Bold text has changed: Amortization for employers who are 120% or more overfunded on a market basis is handled differently. Overfunding occurs when the total assets exceed the actuarial obligation. The funding ratio of an employer can be found on the GASB Statement Number 50 disclosure furnished annually by IMRF.

The primary goal of IMRF is to produce stable employer rates. However an employer who is 120% or more overfunded on a market basis will be given the option of selecting a minimum contribution amount as long as the employer remains over 120% funded on a market basis. Selecting the minimum contribution option will increase rate volatility. Some overfunded employers with limited ability to increase tax levies may want to continue with the normal amortization period since it provides more stable rates. Once overfunded amounts are used up, employer rates will increase to the (at a minimum) normal cost rate, death, disability, and supplemental rate plus amortization of any unfunded amounts.
(The last sentences were deleted.)
(Table was deleted.)

Employers who are over 120% funded on a market basis may use the overfunding to reduce or satisfy its early retirement incentive liability.

7.21 D. Normal Retirement Contributions

Second paragraph, bold text has changed.
The normal retirement contribution, also referred to as the normal cost, is the percent of payroll necessary to fund this year’s portion of the expected total cost of future benefits for the average IMRF member. Most IMRF employers have the same normal cost. For 2010 the normal cost is 7.58% for regular employers, 11.97% for SLEP employers, and 17.24% for ECO employers.

7.21 F. Minimum Contribution

This section was deleted.

7.22 How Costs are Reflected to Employers

Tables in this section have had many changes to percentages and dollar figures. See tables for changes.
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June 2009 (e-Ver. 4.1)

Summary of Key Changes:

  • These exhibits have been updated: 4C, 4D, 5B, 5D, 5E, 5F, 5G, 5H, 5I, 6K, 6X
  • The term “divorce certificate” has changed to “judgment of dissolution of marriage.”
  • 3.80 C. Reference to police chief's participation in IMRF because of a police pension board rejection has been deleted.
  • 3.96 A. Bullet points modified regarding health insurance.
  • 3.96 F. Clarification that life insurance premiums are not reportable to IMRF including policies exceeding $50,000 in value. Also not reportable to IMRF are payments meant for health insurance.
  • 4.15 and 7.25 - Tax levies for IMRF are not to be commingled with Social Security contributions.
  • 5.40 D. 5. Paragraph detailing resignations of disabled IMRF members
  • 6.20 C. The term “gross” earnings has changed to “reportable” earnings.

Detailed changes:
Section 3 Coverage

3.80 Police Officers
C. Police Chiefs

Under the statement "The following police chiefs are not entitled to become SLEP members," this second bulleted item has been removed from the list:

  • Police chiefs with IMRF municipalities that have a police pension plan, but the chief participates in IMRF because the police pension board rejected the chief for physical reasons.
    •

    3.96 A. Earnings Definition

    		 This bullet point was deleted:
    • Cash payments in lieu of health insurance.

    The bolded text in this bullet point was added:
    • Compensation deferred under Internal Revenue Code sections 401(k), 403(b), and 457 (including contributions made in lieu of health insurance)

    3.96 F. Non-Cash Earnings (Wages-In Kind)

    		 Under the paragraph heading Life Insurance, the following sentence in bold has been added.
    Life insurance of any kind or life insurance premiums are not IMRF earnings and are not reportable to IMRF. This includes the taxable value of life insurance provided in excess of $50,000.

    Under the paragraph heading Health Insurance, the following sentence in bold has been added.
    The cost of employer-provided health insurance is not IMRF earnings and is not reportable to IMRF. This includes all payments meant to pay for health insurance, even if not purchased directly by the employer.
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    Section 4 Reporting

    4.15 Tax Levy

    		Text in bold has been added.
    Governmental units with taxing powers and school districts may levy taxes to pay the employer contribution for IMRF and Social Security. The IMRF levy must be separate from the Social Security levy. The proceeds of the IMRF levy may not be used to make Social Security contributions.
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    Section 5 Benefits

    5.40 A. 1. f. 7.

    		 Text in bold has been added.
    7. The member resigns from the position with the employer he or she was working for when the member became disabled. Depending on the member’s situation, benefits may continue. The member should contact IMRF BEFORE resigning from his or her position. Also see Paragraph 5.40 D. 5.

    5.40 B. 2. a.

    		 After the 8th paragraph these two paragraphs were added.
    Signing a workers’ compensation resignation agreement
    In some cases, an employer may offer to settle a workers’ compensation claim if the member agrees to resign from his or her position and give up all rights as an employee of that employer.

    NOTE: If a member signs such a resignation agreement, he or she also gives up any rights to IMRF disability benefits, unless the agreement specifically states that the member is not giving up his or her right to IMRF disability benefits. Also see Paragraph 5.40 D. 5.

    5.40 D. Disability Payment Procedures

    5. Resignations of Disabled IMRF Members

    		 This is all new.
    Termination vs. Resignation
    IMRF disability benefits are terminated if the member resigns from the employment held when the member became disabled. If a member has a choice of being terminated or resigning and chooses to resign, IMRF will not terminate member disability benefits. IMRF treats those members as terminated by the employer and the member remains eligible for disability benefits for the disabling condition.
    Different Position vs. Resignation
    If a disabled member has a choice between accepting a different position at the same IMRF employer to accommodate medical restrictions OR resigning, and the member choose to resign, disability benefits will be terminated. In most situations like this, the doctor has placed restrictions on the member returning to their original job. If the member resigns, IMRF will verify whether or not the member was offered a “reasonable” alternative position prior to resigning. Claims that involve this situation will be reviewed before a decision is made to terminate benefits.
    Workers’ Compensation and Resignation
    In another type of member resignation, the member also files a Workers’ Compensation claim. Often during negotiations to settle the Workers’ Compensation claim, the employer offers to settle the Workers’ Compensation matter if the member resigns from their IMRF position and agrees to give up all rights as an employee of that employer. When the member signs such a resignation agreement, the member gives up the right to receive IMRF disability benefits unless the agreement specifically states that the member is not giving up their right to IMRF disability benefits. This is true even if the agreement mentions that the member is resigning due to a health condition. The reasoning is that by signing such an agreement, the member is separating from service.
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    Section 6 Member Accounts

    6.20 C.

    		 The term "gross earnings" has been replaced by "reportable earnings."
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    Section 7 Employer Contributions

    7.25 Tax Levy for Employer Contributions

    		 Text in bold has been added.
    Section 40 ILCS 5/7-171 of the Illinois Pension Code specifically provides that the revenue from the tax levy can be used only for employer IMRF contributions and may not be transferred for any other use. The proceeds of the IMRF and Social Security levies must be accounted for separately and may not be commingled.
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    January 2009 (e-Ver. 4.0)

    Summary of Key Changes:

    • These exhibits have changed: 4A (Notice of Contribution Rates), 5E (5.40), 5I (5.48), 5J (7.10), 5N (7.12D), 5O (7.12E), 6A (Member Statement), 6C (discontinued), 6E (6.02J), 6I (6.05), 6K (6.07), 6KK (6.77), 6NN (6.80), 6O (6.11), 6R (6.21), 6YY (6.88), 6ZZ (6.93)
    • Board of Trustees updated
    • Police and Fire groups updated
    • Terminology change from Advance Rate notice to Preliminary Rate Notice, and Official Rate Notice to Final Rate Notice.
    • An action for admin review takes place in circuit court of either DuPage or Sangamon county
    • Taxing information has changed in sections 5, 6, and 9

    Detailed changes:
    Introduction

    Enrollment Forms
    updated

    Update page 17 Table titled: Terminating an employee

    		These forms have been updated:
    page 5 - Should this employee be enrolled in IMRF?
    page 7 - Steps to enroll employees in IMRF.
    page 17 added text in bold: Member wants to have his or her pension payments “revert” (become payable) to someone else upon the member's death. Special Needs Annuity Application, Form 5.20R (filed with the member's retirement application, formerly "Reversionary Annuity Application") Read more in the Special Needs Annuities brochure.
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    Section 1 Authorized Agent

    Glossary definition change.

    		Pension Protection Act of 2006 (wording change in bold): a retired or disabled public safety employee can elect to take a tax deduction of up to $3000 for health insurance or long term care insurance
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    Section 3 Coverage

    3.80 and 3.85

    Added to Group III - McClean
    Added to Group IV - South Barrington
    Added to Group V - Hainesville and Leland Grove
    Added to Group I Fire Protection Districts - Beach Park, Glen Carbon, Marshall, North Park, and Oswego

    3.96 and 3.96 A

    Earnings for IMRF purposes changes from $230,000 to $245,000

    3.96 N

    Text deleted in italics: are not reported unless the employer is making a mandatory member contribution on behalf of the employee.

    6.5% changed to 7.5% in this sentence: However, if the employer pays on behalf of its employees the mandatory 4.5% (7.5% SLEP and ECO)

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    Section 4 Reporting

    Term Rename

    Advance Rate Notice is renamed to Preliminary Rate Notice.
    Official Rate Notice has been rernamed to Final Rate Notice    .

    4.15 Tax Levy

    Added text in bold: The IMRF levy must be separate from the Social Security levy and the two levies must be accounted for separately.
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    Section 5 Benefits

    5.40 B. 2.b.

    Change 5 months to 6 months.

    5.40 C. 1.c.

    Text added in bold: IMRF cannot accept doctor’s statements that certify a disability for a date prior to the member’s visit or for a date in the future.

    5.40 C. 5.

    Terminology change in bold: from physical/psychiatric consultant to rehabilitative medicine/occupational psychiatric consultant.

    5.40 C. 6.

    Text added in bold: This form is sent to the member when he or she is notified of the disability claim denial. The completed form must include a Statement of Claim; a detailed statement of why the member believes that the decision to deny/terminate disability benefits is incorrect.

    5.70 Summary of Appeal Procedures

    Second paragraph. 90 days was changed to 63 days.
    Fourth paragraph last sentence new text is bold: If a member wishes to pursue a claim, he or she must file an action for Administrative Review in the Circuit Court of either DuPage or Sangamon county, Illinois within 35 days ....

    5.70 Summary of Appeal Procedures – Non-Disability

    Fifth paragraph, text added in bold: ... Article III of the Illinois Code of Civil Procedure [735 ILCS 5/3-101 et seq. (West 2006)]. If a member wishes to pursue a claim, he or she must file an action for Administrative Review in the Circuit Court of either DuPage or Sangamon county, Illinois within 35 days ...

    5.70 Summary of Appeal Procedures

    IMRF Administrative Decisions Not Affecting Benefits and/or Service Credit - This section including its six paragraphs was deleted.

    5.80 C.

    Text added in bold: ... a tax deduction of up to $3,000 from their federal income tax return for health insurance or long-term care insurance premiums deducted from their pension payment and paid by IMRF to the insurance company or employer.
     
    A maximum of a $3,000 tax deduction can be taken annually on the member’s federal tax return. IMRF reduces the amount of federal income tax withholding to reflect the lower taxable amount of your pension. However, your 1099-R tax statement will show your full pension payments before the deduction for insurance premiums. You take the deduction by reducing the taxable amount of your pension by the amount you paid for insurance premiums when completing Form 1040 or Form 1040A, “U.S. Individual Income Tax Return.”
     
    In the bullet points the terms Pre Tax were deleted. See Italics:
    Election For Pre-Tax Deductions for Health or Long Term Care

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    Section 6 Member Accounts

    6.20 C.

    Text changed in bold: ... contributions are limited to 10% of reportable earnings ...

    6.70

    Text added in bold: a hearing before the Board of Trustees Benefit Review Committee.

    received by IMRF within 63 days after the date of the staff determination letter.

    Board of Trustees Benefit Review Committee meeting.

    the Circuit Court of either DuPage or Sangamon county, Illinois,

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    Section 7 Employer Contributions

    Term rename

    Advance Rate Notice has been changed to Preliminary Rate Notice.
    Official Rate Notice has been changed to Final Rate Notice
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    Appendix 9 Federal Tax Reporting/Social Security
    9.10 G. Box 12 - Deferred Compensation Text added in bold: The tax deferral of IMRF member contributions is covered by Section 414(h) of the Internal Revenue Code.

    The W-2 instructions specify that required employee contributions (such as IMRF) are not elective deferrals and may be reported in Box 14, but not in Box 12.

    The tax deferral of IMRF member contributions is covered by section 414(h) of the Internal Revenue Code; it is not one of the retirement plans reported in Box 12 (plans under Section 401(k), 403(b), 408(k), 457, or 501(c)(18)(D) of the Internal Revenue Code). Therefore, you should not enter any IMRF contributions in Box 12.

    Appendix A.

    The 2009 Social Security Wage Base is $106,800.
    The Federal Income Tax Withholding for IMRF Pension Payments for 2009 is $1579.50.

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