Generally, each IMRF employer has an unfunded liability due to prior service of employees when the employer joined IMRF and due to benefit increases. The unfunded liability is the estimated cost of retirement benefits earned to date that have not been funded. That is to say, the employer does not have enough assets with IMRF to pay those benefits. A portion of the unfunded liability must be paid each year; that portion is determined by the employer’s structure.
For most employers, the unfunded liability is amortized over a 19-year closed period beginning in 2024 reducing to 15 years, and then rolling at 15 years.
For participating instrumentalities (non-taxing bodies), a shorter amortization is imposed due to IMRF not having recourse against the entity for pension obligations should the instrumentality dissolve. Their unfunded liability is amortized over a 10-year open period.