Higher Returns, Lower Expenses
OAK BROOK, Ill. -- With a nearly perfect funding level across the board, the Illinois Municipal Retirement Fund (IMRF), is poised to help communities save more money. In 2017, the market delivered significantly higher numbers, decreasing the average employer contribution rate for – from 11.24 percent of payroll in 2018 to 9.06 percent of payroll in 2019.
“Last year was outstanding for IMRF. Our plan realized a return on investments of more than 15 percent, and that’s pretty impressive,” said IMRF Executive Director Brian Collins. “IMRF’s assumed rate of return is 7.5 percent. Simply put, we doubled our goal. So, this is great news for units of government that participate in IMRF and taxpayers statewide.”
In addition, Illinois’ second-largest and best-funded statewide public pension plan paid $1.71 billion to retirees in Illinois in 2017, resulting in $2.51 billion in local economic activity, according to IMRF estimates based on data from the U.S. Bureau of Economic Analysis.
“Our public service employees are retiring and staying right here in Illinois. In fact, 86 percent continue living in the Land of Lincoln,” said Collins. “Of course, while they are here, they are shopping, eating, traveling, and paying sales taxes. Our retirees have a collective, positive impact on local and statewide economies.”
Funded status approaches 100 percent
IMRF’s investment portfolio realized an impressive gain of 15.73 percent, net of fees, during 2017. That generated $5.6 billion in net investment income, growing the total value of the portfolio to $41.3 billion as of December 31, 2017, the close of IMRF’s fiscal year. The 2017 investment return increased IMRF’s funded status on a market basis from 88.3 percent on December 31, 2016, to 97.1 percent on December 31, 2017.
From a $5,000 investment in 1941 to more than $40 billion in assets last year, IMRF is the 47th largest retirement plan in the United States, according to Pensions & Investments magazine. Since 1982, when IMRF received the authority to invest outside of bonds and government securities, IMRF’s annualized total fund return has been 10.05 percent. About 64 percent of the plan's assets come from investment returns, resulting in lower contribution rates from government and taxpayers in communities across Illinois.
New leader hits the road to release rates
Collins, who started his new executive director post in January, visited with local units of government between April 23 and May 1. At the meetings, Collins and Chief Financial Officer Mark Nannini shared updates on of IMRF’s investment portfolio performance and critical information on procedures and policies for employers.
IMRF has presented Rate Meetings to leaders at governmental units for more than 10 years, at no additional cost to partners.
