General Memorandum 599

On April 14, 2010, the governor signed Senate Bill 1946 (Public Act 96-0889). This new law creates a second tier of IMRF benefits for members who are first enrolled in IMRF's Regular Plan on or after January 1, 2011.

We created a chart that provides a comparison between the Regular Plan Tier 1 and Tier 2.

This new law does not affect members currently participating in IMRF or members who ever participated in IMRF or in a reciprocal system prior to the effective date of this legislation. These members remain in Tier 1.

This new law made no changes to benefits payable to current or future members of IMRF's Sheriff's Law Enforcement Personnel (SLEP) plan.

A separate memorandum will be sent to counties regarding changes to the Elected County Official plan.

Estimated impact of Tier 2 on employer contribution rates
Our actuaries estimate that the initial normal cost of the Regular Plan Tier 2 will be 4.67%, a 38.4% decrease from the current cost of 7.58%. Over time, this reduction will increase.

For example, our actuaries estimate that by 2021, the blended normal cost for both Tier 1 and Tier 2 on an IMRF-wide basis will be 5.95%, a 21.5% decrease from the current normal cost of 7.58%.

The impact of Tier 2 on an individual employer’s rate will depend on the number of Tier 2 members in its workforce.

Employers will see the impact of Tier 2 beginning with their 2013 rates. The 2013 Regular plan rate will be a blended rate covering both Tier 1 and Tier 2 members.

Analysis continues
IMRF continues to analyze this legislation and work with our sister reciprocal systems to ensure
consistent interpretation. IMRF will be updating our communications to reflect this new Tier 2.

There has been discussion that the General Assembly may work on a “trailer bill” that could include technical corrections, which may impact the current provisions of this new tier.

Questions?
If you have any questions, please call an IMRF Member Services Representative at 1-800-ASK-IMRF (1-800-275-4673) 7:30 A.M. to 5:30 P.M., Monday through Friday.