Board Resolution 2017-12-17

Meeting room

Topic: Earnings
Subtopic: Cash earnings related to healthcare
Date: 12/15/2017
Status: Active

WHEREAS, section 7-114 of the Illinois Pension Code provides that earnings as reported to the Illinois Municipal Retirement Fund for use in the calculation of IMRF benefits shall be an amount to be determined by the Board of Trustees equal to the total amount of money paid to any employee for personal services or official duties as an employee including compensation, fees, allowances and other emoluments paid for official duties, and also the money value of any board, lodging and other allowances provided to the employee in lieu of cash; and

WHEREAS, the Board of Trustees is required under section 7-114 of the Illinois Pension Code to specifically define earnings to be reported to the Illinois Municipal Retirement Fund; and

WHEREAS, the Board of Trustees must periodically review its definition of earnings and update that definition as needed; and

WHEREAS, the value of employer provided health insurance is not reportable to IMRF as earnings; and

WHEREAS, some employers provide cash as an alternative to employer provided health insurance or for the purpose of purchasing other healthcare related benefits, and

WHEREAS, Cash payments given by an employer to an employee (in lieu of or in addition to employer provided insurance) to purchase health insurance or other healthcare related benefits on an insurance exchange, through the employer itself, through a spouse’s plan, or any other source have been found to be not reportable to IMRF based on the rule that the value of employer provided health insurance is not reportable; and

WHEREAS, the Board of Trustees has determined that an amendment to the definition of reportable earnings for cash payments made to an employee in lieu of or related to healthcare benefits is needed.

NOW THEREFORE BE IT RESOLVED by the Board of Trustees of the Illinois Municipal Retirement Fund that the IMRF definition of earnings is amended as follows:

IMRF reportable earnings includes all cash payments made separately from salary and made in lieu of employer provided health insurance or cash payments made in association with or related to healthcare benefits, at the option of a participating unit of government. The participating unit of government must affirmatively allow IMRF reporting of such compensation by adoption of a resolution by its governing body.

BE IT FURTHER RESOLVED that, unless the participating unit of government has affirmatively elected to allow IMRF reporting of such compensation, any cash payments made to an employee in lieu of or related in any way to healthcare benefits is excluded from IMRF reportable earnings.