Employers are required to request a Pension Impact Statement from IMRF before increasing the earnings of certain members by 12% or more, effective January 1, 2012.
Before an IMRF employer can increase the earnings of an officer, executive, or manager by 12% or more, the employer must request from IMRF a written Pension Impact Statement. See Exhibit 7C – Request for Pension Impact Statement (Form 3.22). The statement will provide the following:
The effect the earnings increase could have on the member’s pension.
The estimated Accelerated Payment, defined as the amount the employer would be required to pay immediately: that portion of the present value of the pension attributable to salary increases exceeding 6% or 1.5 times the increase in the Consumer Price Index-Urban as of the previous September if the member retired.
When completed, employers will be required to sign and return the Pension Impact Statement to IMRF.
NOTE: This new provision does not apply to earnings increases for members who are more than 10 years from retirement eligibility.
The following earnings increases are exempted from this requirement. Earnings increases:
Resulting from standard employment promotions resulting in increased responsibility and workload
Resulting from an increase in the number of hours required to be worked
Paid under contracts or collective bargaining agreements entered into, amended or renewed before January 1, 2012