a. Stipends
c. Expense Reimbursements (Mileage, Meals)
d. Premium Pay
e. Vacation, Sick Leave, Personal Leave, etc.
f. Determining an Original ECO plan member's final earnings
g. Determining a Revised ECO plan member’s final earnings
Many elected officials receive stipends paid by the State of Illinois. Stipends are IMRF earnings for all benefit calculation purposes if they are paid to the member while he or she is in an IMRF qualifying position or within one month of the month in which he or she terminates IMRF participation.
IMRF member contributions are to be deducted from the payment and remitted to IMRF. In addition, counties are required to make employer contributions on the gross amount. The ECO employer contribution rate is applied to stipends for those officials enrolled in the ECO plan.
Generally stipends are paid once a year and cover 12 months of elected service. There is an exception if the official ceases to hold office. In that case, the stipend is prorated and payment is made for each month the official held office since his or her last stipend payment.
Stipends are an annual payment and if not previously reported should be reported as such when terminating an ECO plan member's participation. The total amount reported for the final earnings should never exceed the annual salary plus one annual stipend amount. In other words, if during one calendar year an official receives both the usual 12-month stipend payment plus a second stipend payment for a partial year to reflect the last portion of his or her term in office, you would report only the 12-month amount.
Example 1
An official makes $40,000 per year and receives an annual stipend of $3,600. The stipend is paid every July for the previous July 1 through June 30 period. The official resigns on September 30. When completing the termination, you would report at an annual salary of $40,000 and an annual stipend of $3,600. Do not report a stipend of $4,500 ($3,600 plus $900 for 3 months at $300 per month).
Example 2
An official makes $44,500 per year with an annual stipend of $3,600 paid in July. However, beginning July 1, the annual stipend was increased to $5,000. The official leaves office on December 2. At the time he left office he has yet to receive his prorated stipend for the July through November period (in fact, payment is not received until the following February). When completing the Form 6.41, you would report an annual salary of $44,500 and an annual stipend of $5,000. This is because the statute requires IMRF to use the salary in effect on the date of termination ($44,500 and $5,000).
Some County Board members receive a payment for each County Board or Committee meeting attended. Unlike salaried officials, you cannot merely rely on the salary schedule in effect on the date of termination. The per diem payments vary widely from month to month. When completing the final earnings and contributions report, include as final annual salary the total per diems paid to the official within the last 12 months of his or her service.
Example 3
The County pays per meeting attended. The Board member leaves office on December 2 (without attending any meetings that month). During the last 12 months of the term, the board member attended one meeting in December of last year, no meeting in January, three meetings per month for nine months, and six meetings in the last month for a total of 34 meetings. He or she was paid $3,400 during the 12-month period. Enter $3,400 as the final annual salary earned.
Example 4
Same facts as in Example 5, except the official turns in all his or her per diem requests in November, the month before leaving office. His or her final annual salary earned is $3,400. It is not $3,400 times 12 months or $40,800.
Expense reimbursements are not IMRF earnings and should not be added to an official’s salary or per diem. They should not be reported to IMRF as part of the official’s final annual salary.
Many Counties pay Board members an additional amount to participate on committees, to be committee chairpersons or to be Board President. Some Board Presidents receive an additional payment to be liquor commissioner. This premium pay is considered IMRF earnings and should be reported to IMRF.
Example 5
A County Board member is paid $100 per meeting and $500 extra to be a committee chairperson. In his last 12 months of office, he attended 53 meetings. You should report his final annual salary as $5,800 (53 times $100 plus $500).
Example 6
A County Board President is paid $6,000 per year as salary. Your Board President decides to also act as liquor commissioner and is paid an additional $1,200. You should report his final annual salary as $7,200.
Normally, elected officials do not earn and are not paid for unused vacation, sick leave, personal leave or other such forms of paid leave. However, an occasion may arise that a non-elected employee becomes an elected official, and the County permits them to carry over any unpaid leave to their elected position.
Upon termination of office, the official may be eligible for payment of such unpaid leave earned in the former non-elected position. If the monies are paid before termination or the first month after termination, the monies are reportable earnings and employee contributions are deductible.
However, those payments may not be reported for a terminating member as either the ECO member’s final annual salary or the member’s stipend. These payments are neither salary nor stipends as those terms apply when determining an elected official’s retirement benefit.
Determining an Original ECO plan member’s final earnings
If a county has officials participating in the Original Elected County Official (ECO) plan (official joined ECO prior to January 26, 2000), reporting an original ECO member’s final earnings can be complicated. When calculating an original ECO retirement benefit, IMRF must use the official’s salary at the termination of service.
There is no requirement that the final salary be in effect for any stated period of time. The number of payments or their amount in the official’s last month or year becomes irrelevant. What is crucial is the annual salary rate at which the official was paid on his or her last day of office. NOTE: The member must have worked in the position for at least 600 or 1,000 hours (as applicable) in order for the salary of that position to be used as the final earnings.
Example 7
At the beginning of the official’s term, the salary is set at $40,000 with 3% increases authorized for the second, third, and fourth years ($40,000; $41,200; $42,436; and $43,709). The term begins on December 1 and the salary increases occur annually each December 1st thereafter.
If the official completes his or her term and retires, the ECO retirement benefit will be calculated using a final salary of $43,709. The $43,709 is the salary in effect at the time of retirement. It is an annual number.
Example 8
Same facts as in the preceding example except the official resigns and leaves office on December 3 of his or her fourth year in office. The official will have been in office for 3 days during the $43,709 salary schedule. Although the official has not held office for the entire fourth year, the salary in effect at the time of retirement is $43,709. The ECO retirement benefit will be calculated using that amount as the final salary.
If a county has officials participating in the Revised Elected County Official (ECO) Plan (official joined ECO on or after January 26, 2000), the Revised ECO member’s final rate of earnings (FRE) is calculated in the same manner as the Regular Plan FRE. However, a separate FRE is calculated for each elected county position the member held in the same county. The ECO monthly FRE does not include any lump sum payments for vacation, sick leave, overtime, personal leave, etc.