Board names Brian Collins future Executive Director
The IMRF Board of Trustees voted unanimously to appoint Brian Collins the organization’s next Executive Director following the retirement of Louis W. Kosiba at the end of the year.
Collins, the current Chief Financial Officer and Director of Finance and Administration for the City of Memphis, will start on January 8, 2018.
Board approves changes to actuarial assumptions; to consider investment return assumption in December
The Board approved a number of changes to the demographic and economic assumptions that IMRF relies on when estimating the fund’s liabilities, and ultimately, computing employer contribution rates.
The Board made the adjustments at the recommendation of actuary Gabriel, Roeder, Smith & Co. (GRS). GRS suggested the changes after comparing the prior assumptions to IMRF’s actual experience over a three-year period from January 1, 2014, to December 31, 2016, and considering future trends.
In terms of demographic assumptions, the adjustments include modifying the rate of:
- quitting for active members
- disability for active members
- retirement for active members
- merit and longevity pay for active members
- and mortality for active members, retirees, and beneficiaries.
In terms of economic assumptions, the adjustments included:
- lowering price inflation from 2.75% to 2.5%
- lowering wage inflation from 3.5% to 3.25%
- and lowering payroll growth from 3.5% to 2.5%
GRS also recommended that the Board consider lowering IMRF’s assumed rate of investment return from 7.5% to 7.25%. The Board agreed to make this decision in December, after considering additional information. If the investment assumption is lowered, GRS estimated that the negative impact on the average employer contribution rate would be largely offset by the positive impact from other changes to the economic and demographic assumptions. If the investment return assumption is not lowered, the average employer contribution rate will decrease in future years, according to GRS estimates.
Any changes to assumptions will not impact employer contribution rates until 2019.
Board approves 2018 rates
The Board approved IMRF employer contribution rates for the 2018 calendar year. The rates, which are unique to each IMRF employer, are expressed as a percentage of pay roll. The average employer contribution rate will drop from 11.34% in 2017 to 11.24% in 2018, largely due to lower costs associated with the Tier 2 benefit structure.
IMRF employers may access their 2018 Final Rate Notice within Employer Access.
Board approves 2018 Budget
The Board approved IMRF’s budget for 2018. The document estimates 2018 revenues (member contributions, employer contributions, and investment returns) and 2018 expenses (benefit payments, refunds, investment fees, administrative expenses, and capital projects). IMRF’s primary budgetary objective is to plan for sufficient funds to continue to pay benefits, while providing IMRF members and employers outstanding customer service. All expenditures are reviewed closely for alignment with IMRF’s Strategic Plan.
You can view the 2018 Budget within the Transparency Portal section of IMRF’s website (click the "About IMRF" tab, select "Transparency Portal" from the menu, then select "2018 Budget").
State Sen. Clayborne, Jr. urges Board to maintain commitment to diversity
Illinois State Sen. James F. Clayborne, Jr. (D), of Belleville, spoke to the Board about the importance of IMRF maintaining its commitment to diversity throughout its procurement process. Clayborne said that both IMRF and the State of Illinois are leaders in terms of providing opportunities to firms owned by minorities, females, and persons with a disability. IMRF has set a minimum goal that 20% of contracts and purchases be from businesses owned by minorities, females, or persons with a disability, including contracts for investment-management services.
“I want to commend you all for making sure that diversity is present in your portfolio,” Clayborne said. “I hope that going forward you will consider providing even greater opportunities.”
Board passes new resolutions
The Board passed two new resolutions:
- Board Resolution 2017-11-16 establishes that vacation payouts within the last three months of employment are exempt from the Accelerated Payment calculation.
- Board Resolution 2017-11-15 establishes that on or after November 17, 2017, employers may no longer pass resolutions to make vehicle allowances IMRF reportable earnings. Resolutions adopted before that date will continue to apply only for employees who first began IMRF participation before August 25, 2017.
New units of government join IMRF
The Board approved the participation of the following new employers:
- Northern Moraine Wastewater Reclamation District
- Bismarck-Henning/Rossville-Alvin Cooperative High School
Next Board meeting
The next regular meeting of the IMRF Board of Trustees will be December 15 at 9 a.m. at IMRF’s Oak Brook headquarters.