New amortization method decreases unfunded liability, employer rates in long-term
The Board voted to change the amortization method for employers from a 30-year, open method to a 30-year, closed method that converts to an open method after 15 years.
Actuarial Consultant Gabriel Roeder Smith & Company recommended the change in conjunction with its most recent Experience Study. At the request of the Board, GRS performed a 100-year study that examined the two amortization methods’ impact on unfunded liability and employer rates.
The study showed that the unfunded liability would grow by nearly $30 billion over 100 years under the old 30-year, open method.
The study also showed that the new amortization method will decrease employer contributions in the long-term.
The new method will slightly increase employer rates in the short-term. In 2014, it is estimated that the average employer rate would increase .08%. The new method will have no impact on employer rates in 2013.
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Trustee vacancy
The Board voted to invite prior candidates to interview for the vacant Employee Trustee position. Past candidates for vacant Employee Trustee positions, plus another candidate who has been recommended for the position, will be invited to be interviewed on February 23.
The Board is seeking a candidate to serve for the balance of 2012 for former Employee Trustee Marvin R. Shoop, Jr. Shoop retired at the end of 2011 but his term of office expires December 2015. In the fall, IMRF members will elect a candidate to fill Shoop’s remaining term of office, January 2013 through December 2015.
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Nannini submits Oath of Office, participates in first meeting
New Executive Trustee Mark F. Nannini submitted his signed Constitutional Oath of Office and participated in his first Board meeting. Nannini is Director of Finance and Treasurer of the City of Crystal Lake. His five-year term runs through 2016.
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2012
Board Committees
The Board approved the following 2012 committees:
- Audit Committee
Mark Nannini, Chair
Bill Stafford, Vice Chair
Gwen Henry
Sharon U. Thompson
- Benefit Review Committee
Ruth Faklis, Chair
Natalie Copper, Vice Chair
Gwen Henry
John Piechocinski
- Investment Committee
Bill Stafford, Chair
Mark Nannini, Vice Chair
Natalie Copper
Gwen Henry
John Piechocinski
Sharon U. Thompson
- Legislative Committee
Sharon U. Thompson, Chair
John Piechocinski, Vice Chair
Natalie Copper
Ruth Faklis
Gwen Henry
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4th Quarter Strategic Objectives update
The Board heard a 4th Quarter Strategic Objectives update from Executive Director Louis W. Kosiba. His report covered staff activities in support of the Board’s 2011-2013 Strategic Plan. During the meeting, Kosiba highlighted successes in the Key Results Areas of Customer Satisfaction and Workforce Engagement.
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Legislative update
Legislative Liaison Bonnie Shadid told the Board that the Spring Legislative Session is scheduled to begin January 31. No new legislation impacting IMRF or pensions in general has been introduced since the fall veto session. Governor Pat Quinn has formed a pension working group to discuss changes to benefits for current members of the state systems.
Shadid also said that Gov. Quinn signed House Bill 3813 into law on January 5. The bill requires trustees and executive directors of all Illinois pension funds, including IMRF, to report any reasonable suspicion of fraud.
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Next Board meeting
The next monthly Board meeting will be held at 9:00 a.m. on Friday,
Friday, February 24, 2012.
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