Board Resolution 2021-05-12(c)

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

WHEREAS, Section 7-217(c) of the Illinois Pension Code further authorizes the Board of Trustees to retain out of any annuity or benefit payable to a person amounts owed to the Fund resulting from money paid to any annuitant or employee through misrepresentation, fraud, or error; and

WHEREAS, when monies owed under Section 7-217(c) resulting from improper payment of benefits, it is the fiduciary obligation of the Board of Trustees to collect these prepayments; and

WHEREAS, the Board of Trustees has determined that it is desirable that rules be established to direct staff in the collection of such prepayments; and

WHEREAS, the Board of Trustees has determined that the following rules are necessary and appropriate for the efficient administration of the fund.

NOW THEREFORE BE IT RESOLVED that the following rules shall govern the collection of prepayments:

1. IMRF will make all attempts to recover any payment of benefits made due to misrepresentation, fraud, or error. Such erroneous payment constitutes a prepayment.
2. If there is a payable benefit from which the prepayment can be collected, then the benefit(s) will be withheld at a rate of 100% until the prepayment is recovered. This includes both recurring benefit payments and lump sum benefit payments.
1. If a payee wishes to enter into a repayment agreement at a rate of less than 100% withholding due to financial hardship, such request may be made and approved by the Benefits Manager or Disability Manager. The approved repayment schedule must be no longer than 5 years, or 60 months.
2. When a prepayment accrues as a result of retiree return to work or another retiree benefit recoupment, then the payee will be given appeal rights. If the appeal is not taken, the prepayment will be recovered at 100% withholding unless another schedule is approved in accordance with Section 2(a). If the appeal is taken, it will be resolved in accordance with the IMRF Non-Disability Appeal Procedures.
3. In the event that there is no payable benefit from which the prepayment may be collected, staff is directed to make contact with the payee, financial institution, or any other party who may assist in the collection. These efforts will be conducted in accordance with staff procedure.
4. If the prepayment cannot be entirely recovered after all collection efforts have been exhausted:
1. For amounts less than $1000, the Benefits Manager or Disability Manager may approve a write-off of the remaining prepayment amount.
2. For amounts of $1000 or greater, the appropriate Manager will refer the prepayment to the Legal Department to determine what collection efforts, if any to pursue. A recommendation will be made to the Benefit Review Committee who will determine whether to pursue legal action or approve a write-off of the remaining amount. The Benefit Review Committee will make a recommendation on the disposition of the prepayment(s) to the Board of Trustees.