4.15 Tax Levy

Governmental units with taxing powers and school districts may levy taxes to pay the employer contribution for IMRF. 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. In April, IMRF provides each employer a Preliminary Rate Notice with the IMRF rates for the next year. With this information, the taxing body may levy sufficient taxes to make full payment of the employer contributions on the appropriate due dates.

The levies adopted should include a provision for a ”working balance” that can be used to prevent a shortage of cash pending the receipt of tax collections. Non-taxing bodies in IMRF should include the necessary amounts in their budgets.

Unlike certain other funds, such as a general fund where resources may be transferred to meet budgetary needs, the Illinois Pension Code specifically provides that the revenue from an employer’s IMRF tax levy can be used only for required employer IMRF contributions. This ensures that the employer’s IMRF pension liability will be adequately funded.

Monies from the IMRF levy may not be used to cover member contribution costs. If an employer wishes to pay for the cost of its members’ contributions, the monies to cover the cost should come from the same source as the one for salaries or fringe benefits. The IMRF levy may not be used.

Monies from the IMRF tax levy may be used to pay the employer costs for IMRF Early Retirement Incentive (ERI). If an employer wishes to pay for a member’s portion of an ERI, the monies to cover the cost must come from a source other than the IMRF levy.

An employer may not transfer monies from its IMRF tax levy even if its IMRF account is over funded. To compensate for an over-funded IMRF fund, the employer may adjust its next year’s IMRF tax levy.

If an employer’s IMRF account is under funded, it may transfer funds into the IMRF account from other operating funds.