6.60 I. To Adopt Amortization Period for IMRF Early Retirement Incentive

Once a unit of government adopts the IMRF Early Retirement Incentive (ERI), an amortization period One of the pieces of information an actuary uses to calculate an IMRF employer contribution rate. Generally, each IMRF employer (unit of government) has an unfunded liability due to "prior service" of employees when the employer joined IMRF and due to benefit increases. (Prior service refers to the years and months an employee worked for a unit of government before that unit joined IMRF-assuming the position the employee held qualified for IMRF). The unfunded liability is the estimated cost of retirement benefits earned to date that have not been funded. That is to say, the employer has no assets with IMRF to pay those benefits. A portion of the unfunded liability must be paid each year; the portion is determined by the employer's structure. For most employers, the unfunded liability is amortized over a 25-year period in 2007. Participating instrumentalities (employers without taxing authority) amortize their unfunded liabilities over a five-year period. of 10 years (to pay the employer costs) is assumed.

If an employer would like an amortization period of less than 10 years, it would submit a resolution (IMRF Suggested Form Resolution, "Resolution to Adopt Amortization Period") doing so.

To use IMRF’s suggested form of resolution, send a secure message to request a “Resolution to Adopt Amortization Period” form. If unable to send a secure message, contact IMRF through the employer-only phone number at 1-800-728-7971.

Refer to 5.20 C. IMRF Early Retirement Incentive (ERI) for more information on the IMRF ERI or to 7.23 Financing the Cost of IMRF Early Retirement Incentive (ERI) for information on financing ERI pensions.

Related Topics