Consultant presents annual Actuarial Valuation
Actuaries Gabriel, Roeder, Smith (GRS) and Co. presented IMRF's Actuarial Valuation for 2014 to the IMRF Board of Trustees.
The annual valuation details IMRF's financial position and highlights changes to the demographics of the IMRF membership during the prior calendar year. The valuation also makes recommendations that the Board relies on to set employer contribution rates for the coming calendar year.
According to the valuation:
- The rate of return of IMRF investments was approximately 6.1% during 2014.
- The market value of IMRF's assets was approximately $34.8 billion as of 12/31/14, an increase of approximately $1.6 billion versus 12/31/13.
- IMRF was approximately 93% funded on a market basis as of 12/31/14, down from approximately 96% on a market basis as of 12/31/13.
- GRS said that the Board's recent adoption of updated mortality tables is primarily responsible for the decrease in funded status. The updated, more conservative tables increase the life span assumption of the average IMRF member, which increases IMRF's projected costs.
Demographic highlights from the valuation include:
| Number of All IMRF Members | As of 12/31/14 | As of 12/31/13 |
|---|---|---|
| Tier 1 Active | 133,884 | 142,892 |
| Tier 2 Active | 39,695 | 30,589 |
| Retirees | 111,989 | 106,997 |
| Inactive | 137,941 | 136,749 |
| Total | 423,509 | 417,227 |
| Number of IMRF Active Members | As of 12/31/14 | As of 12/31/13 |
|---|---|---|
| Regular Plan | 169,146 | 168,977 |
| SLEP Plan | 4,194 | 4,204 |
| ECO Plan | 239 | 300 |
| Total | 173,579 | 173,481 |
The valuation also said that the average employer contribution rate would remain basically flat in 2016. GRS actuaries said the 2016 average rate for the Regular Plan would be 11.73% of payroll in 2016 versus 11.69% in 2015 (a change of just 0.34%).
Board hears report on GASB 68 implications
GRS actuaries also discussed reports recently provided to IMRF employers to help them comply with the requirements of Governmental Accounting Standards Board (GASB) Statement No. 68.
GASB No. 68 changes the way many IMRF employers must account for their pension liabilities (though it has no effect on how IMRF sets employer contribution rates).
Under the new accounting standards, many IMRF employers now need to share more detail related to their IMRF pension liabilities on their annual financial statements. Earlier this year, IMRF provided the data employers would need to comply with these requirements.
The GRS actuaries told the Board that for most IMRF employers, the funded status of their IMRF plans will increase under the requirements of GASB 68. Prior to GASB 68, IMRF calculated the funded status of employer plans considering only the assets and liabilities of non-retirees. Under GASB 68, IMRF now includes the assets and liabilities for retirees when calculating each employer's IMRF funded status. As each IMRF employer has 100% of the assets to fund the pensions of its IMRF retirees, the funded ratio of most IMRF employers will increase as a result.
Board approves 2015 election procedures and materials
The Board approved the procedures and materials IMRF staff will use to administer the 2015 Board of Trustees elections.
IMRF will administer three elections in 2015. Employers will elect one Executive Trustee, active members will elect two Employee Trustees, and retirees will elect one Annuitant Trustee.
IMRF staff will update www.imrf.org with all election information—including nominating petitions, election rules, and candidate biography forms—on June 30.
Board hears legislative update
IMRF General Counsel Kathy O'Brien updated the Board on legislative activity relevant to IMRF as part of the 99th General Assembly.
No bills to which IMRF is opposed are currently active in the General Assembly.
In addition, three of the four bills that make up the Board's 2015 Legislative Agenda have passed both the House and the Senate and await the Governor's signature:
- House Bill 2916: Reduces the time required before IMRF can begin the offset process for delinquent employers with the treasurer or comptroller from 90 days delinquent to 60 days delinquent.
- House Bill 3592: Updates a reference in the Early Retirement Incentive (ERI) statute that refers to old employee contribution rates.
- House Bill 3757: Allows for an employer penalty for return to work violations, up to the total annuity paid to the annuitant during the return to work period.
More information on these and other bills impacting IMRF.
New IMRF employers
The Board approved the participation of the following new IMRF employers:
- Shawnee Mass Transit District
- Exceptional Learners Collaborative
Next Board meeting
The next regularly scheduled Board meeting will be held August 28 at IMRF’s Oak Brook headquarters.