Board Resolution 2003-06-10

WHEREAS, Section 7-141.1 of the Illinois Pension Code provides for the adoption, by units of local government, of early retirement incentive programs; and

WHEREAS, Illinois General Assembly has declared that the “primary purpose” of Section 7-141.1 of the Illinois Pension Code is “to encourage units of local government that can realize true cost savings, or have determined that [the implementation of] an early retirement incentive program is in their best interest”, and

WHEREAS, Sections 7-198 and 7-183 of the Illinois Pension Code authorize the Board of Trustees of the Illinois Municipal Retirement Fund (“IMRF”) to make rules necessary or desirable for the efficient administration of the Fund and to request information from any participating municipality or participating instrumentality; and

WHEREAS, the Board of Trustees of IMRF has previously determined that an actuarial cost study shall be required before a participating municipality or participating instrumentality adopts the early retirement incentive allowed under Section 7-141.1 of the Illinois Pension Code; and

WHEREAS, the Illinois Pension Code provides that the IMRF employer obligations of certain participating municipalities or participating instrumentalities are transferred to a successor unit(s) of local government upon dissolution under state law; and

WHEREAS, the Illinois Pension Code provides that the IMRF employer obligations of participating municipalities or participating instrumentalities that are not assumed by a successor unit(s) of local government are transferred to a Terminated Municipality Reserve Account with the cost of any deficiency in said account being borne by all remaining IMRF participating municipalities and participating instrumentalities; and

WHEREAS, the adoption of an early retirement incentive will increase the cost of IMRF employer obligations; and

WHEREAS, the additional unfunded liability accruing as a result of the adoption of an early retirement incentive is to be paid by the employer over a five (5) to ten (10) year period of time.

NOW, THEREFORE, BE IT RESOLVED that whenever a participating municipality or participating instrumentality desires to adopt an early retirement incentive under Section 7-141.1 of the Illinois Pension Code and,

1. the participating municipality or participating instrumentality is aware, or has reason to be aware, of its future dissolution under state law; and
2. the IMRF employer obligations of the participating municipality or participating instrumentality will be transferred to a successor unit(s) of local government;

the participating municipality or participating instrumentality must have IMRF prepare an actuarial cost study and copies of said cost study must be provided to the successor unit(s) of local government. Additionally, a majority of the successor unit(s) of local government shall adopt resolutions approving the adoption of the early retirement incentive and a copy of said resolutions shall be provided to IMRF upon request.

BE IT FURTHER RESOLVED that whenever a participating municipality or participating instrumentality desires to adopt an early retirement incentive under Section 7-141.1 of the Illinois Pension Code and,

1. the participating municipality or participating instrumentality is aware, or has reason to be aware, of its future dissolution under state law; and
2. the IMRF employer obligations of the participating municipality or participating instrumentality will not be transferred to a successor unit of local government;

the participating municipality or participating instrumentality must have IMRF prepare an actuarial cost study and copies of said cost study must be provided to the IMRF Board of Trustees which Board shall, on behalf of all IMRF employers, either approve or deny the adoption of the early retirement incentive.

BE IT FURTHER RESOLVED that any ERI resolution adopted without having complied with the foregoing requirements shall not be given effect by IMRF.

BE IT FURTHER RESOLVED that this IMRF Board Resolution is effective upon its adoption by the Board of Trustees of IMRF and shall apply to any early retirement incentive program that has not yet been given effect by IMRF.