Board Resolution 2023-12-13(a)

WHEREAS, Section 7-102 of the Illinois Pension Code provides that it is the purpose of the Illinois Municipal Retirement Fund to provide a sound and efficient system for the payment of annuities and other benefits to certain officers and employees, and their beneficiaries, of municipalities; and

WHEREAS, Section 7-174 of the Illinois Pension Code creates a Board of Trustees to carry out the provisions of Article 7 of the Pension Code; and

WHEREAS, the Board of Trustees has adopted Strategic Objectives that include achieving a funding level whereby IMRF is in the top 10% on a market value basis, as measured versus a universe of public pension funds with a December 31st year end; and

WHEREAS, Section 1-109 of the Illinois Pension Code requires the Board of Trustees, as fiduciaries, to discharge its duties solely in the interest of all participants and beneficiaries and for the exclusive purpose of providing benefits to participants and their beneficiaries; and defraying reasonable expenses of administering the pension fund; and

WHEREAS, legislation is often introduced that creates temporary transfer windows outside of the Reciprocal Act of the Illinois Pension Code that allow IMRF members to transfer service between IMRF and other public pension systems, often without requiring actuarial calculations of the cost, that increase the unfunded liability of IMRF’s employers; and

WHEREAS, legislation enhances the benefits of select participating groups diverts monies away from benefit enhancements that should be available to all participating members and may violate IRS nondiscrimination rules for qualifies pension plans; and

WHEREAS, the Board has determined that IMRF staff must respond immediately to any legislative proposals that would negatively impact certain areas of operations; and

WHEREAS, the Board of Trustees must have a physical quorum present in order to take positions on new legislation outside of any pre-determined positions, which may not be possible in time to respond to new proposals.

NOW, THEREFORE BE IT RESOLVED, that the following policy will govern the administration of legislative proposals introduced by outside parties during General Assembly sessions.

Legislative Positions

The Board of Trustees will default to taking no position on new legislation, except that IMRF staff will oppose any legislative proposals that:

1. Create temporary transfer windows that allow IMRF members to transfer service between IMRF and other public pension systems outside of the Reciprocal Act;
2. Reduce the IMRF funding goal to anything less than 100%;
3. Interfere with the Board’s authority to set employer contribution rates;
4. Limit the Board’s authority to invest the Fund’s assets under the prudent person rule;
5. Interfere with the Board’s authority to administer the IMRF plan;
6. Increase benefits for select categories of its members without making corresponding benefits available to all its members;
7. Adversely impact the operational abilities of the Fund; or
8. Potentially violate state or federal law, including the Internal Revenue Code and the Pension Protection Clause of the Illinois Constitution.

If legislation on any of these topics is introduced, staff shall contact the Board immediately and provide a report on staff’s activities related thereto.

New Legislation

Staff will provide regular updates on newly introduced legislation to the Board as soon as is practicable after introduction. If a proposal outside one of the above topics is introduced but a trustee believes that the Board should take a position, he or she must contact staff to attempt to schedule a special meeting of the Board as soon as possible. If a meeting cannot be scheduled before action by the General Assembly, then the Board shall take no position.

Other Action

Board Resolution 2008-12-21 is hereby rescinded.