Board Resolution 2013-10-06

WHEREAS, Section 7-198 of the Illinois Pension Code authorizes the Board of Trustees of the Illinois Municipal Retirement Fund (IMRF) to establish rules necessary or desirable for the efficient administration of the Fund; and

WHEREAS, P.A. 98-0439 added subsection 11 to section 7-139(a) of the Pension Code to provide for an actuarial computation to calculate the member cost of transfer of service credit under section 3-110.3 of the Pension Code (the police chief transfer provision); and

WHEREAS, P.A. 98-0439 requires the Board of Trustees to establish by Board rule the manner of making this calculation "taking into account the appropriate actuarial assumptions; the member's service, age, and salary history, and any other factors that the Board determines to be relevant."

THEREFORE BE IT RESOLVED by the Board of Trustees that the actuarial computation to calculate the member cost of a transfer of service credit under section 3-110.3 of the Pension Code shall be determined as follows:

1. The participant's projected monthly retirement benefit will be computed at the participant's earliest retirement date, with and without the service to be transferred under section 3-110.3;
2. The projected monthly retirement benefit computations will be performed using the following assumptions:
   • Retirement is at the date the member is first eligible for an immediate unreduced retirement benefit.
   • Service credited from the date of the calculation through the earliest unreduced retirement date.
   • Possible future employee contributions to be included in the calculation on the above cost.
   • Future final average compensation increases of 4.0% per year;
3. The present value of the benefits calculated without the transferred service will be compared to the present value of benefits calculated with the transferred service. The difference in the present value of benefits is the member's cost to transfer the service;
4. The present value of benefits calculations will be performed using the following assumptions:
   • 50% Joint and Survivor benefit normal form of payment.
   • The then current investment return assumption (currently 7.5%).
   • The then current mortality assumptions (currently a 50% male/50% female blend of the RP-2000 Combined Healthy Mortality Table, adjusted for mortality improvements to 2020 using projection scale AA.) For men 120% of the table rates will be used. For women 92% of the table rates will be used.