Board Resolution 2022-05-10

WHEREAS, HB 4209 inserts new statutory sections into Articles 3 and 7 to provide a transfer window from July 1, 2022 through December 1, 2023 for active SLEP members to transfer up to ten years of creditable service from an Article 3 fund to IMRF SLEP, and

WHEREAS, upon transfer of the amounts accumulated to the credit of the member in Article 3 and employer contributions in an equal amount, IMRF is required to determine according to the statute how much SLEP service that would purchase; and

WHEREAS, after IMRF determines the amount of SLEP service the Article 3 contributions will purchase, the member shall be given the option to pay an additional amount in order to purchase up to the full amount of Article 3 service transferred or may have his/her account credited with the amount of SLEP service that the Article 3 service will purchase without supplementing that amount;

NOW, THEREFORE, BE IT RESOLVED by the Board of Trustees that the following rules and regulations be adopted:

1. For applications received by an Article 3 fund between July 1, 2022 and December 1, 2023 and by IMRF between July 1, 2022 and January 1, 2023, the Article 3 Fund shall transfer to IMRF as soon as practicable, an amount equal to:
1. The amounts accumulated to the credit of the applicant on the books of the fund on the date of the transfer; and
2. Employer contributions in an equal amount to that transferred under (a).
3. The Article 3 fund must additionally provide IMRF with monthly wages for the period of time being transferred so that IMRF can calculate SLEP contributions for the same period of time.
2. IMRF shall then determine the amount necessary to convert the Article 3 credits to SLEP credits by calculating the difference between:
1. the combined employer and employee contributions transferred from the Article 3 fund and
2. the combined amount that would have been contributed if the member had participated in SLEP during that time, which includes
1. Member contributions using the member contribution rate that would have been required during the period of time being transferred plus interest
   (a) 7.5% for period from June 1, 2006 to present
   (b) 6.5% from July 1, 1988 to May 31, 2006; and
   (c) 5.5% for periods prior to July 1, 1988,
2. Employer contributions using the normal SLEP rate for the member’s SLEP employer during the period of time being transferred
plus interest thereon at the prescribed rate, compounded annually, from the date of service to the date of payment.
3. Once IMRF has calculated the total amount required to be paid to transfer the full amount of Article 3 service, the member has two options:
1. The member may pay the additional amount determined in 2 above and be credited with the full amount of transferred service, or
2. The amount of transferred service shall be reduced by an amount corresponding to the amount determined in 2 above.
4. The member must make an election to pay the additional amount required under item 3(a) above within 60 days after notification by the Fund of the total cost. If such election is not received by IMRF within 60 days, they will receive the reduced service amount calculated in item 3(b) above.
5. Neither the amount transferred from the Article 3 fund, nor the amount credited in IMRF shall exceed the lesser of 10 years or the actual amount of service credit earned in the Article 3 fund.
6. If the amount calculated in item 2a above is greater than the amount calculated in item 2b, the member shall be automatically credited with the lesser of 10 years or the amount of service credit earned in the Article 3 fund and the excess shall be credited to the account of the member’s SLEP employer.