Board hears report on investment assumed rate of return
According to actuarial consultant GRS Retirement Consulting, the IMRF Board of Trustees should consider lowering the amount that IMRF assumes it can earn on its investment portfolio. GRS Senior Consultant Brian Murphy said at the Board’s November meeting that IMRF’s assumed rate of return of 7.5% net of fees should be decreased to 7.25% net of fees or lower. While the 7.5% assumption has been conservative historically, Murphy said that the investment portfolio is not expected to deliver that return over the course of the next 10 years.
You can review GRS’ full presentation to the Board here.
The Trustees agreed to consider the matter at their December 14 meeting.
Board approves 2019 rates
The Board approved 2019 IMRF employer contribution rates.
The rates, which are unique to each IMRF employer, are expressed as a percentage of payroll. The average employer contribution rate will drop from 11.24% in 2018 to 9.06% in 2019. The decrease is due to a combination of factors such as changes to actuarial assumptions, strong investment returns over the last five years, and lower costs associated with the Tier 2 benefit structure.
IMRF employers may access their 2018 Final Rate Notice within Employer Access.
Board approves 2019 Budget
The Board approved IMRF’s budget for 2019. The document estimates 2019 revenues (member contributions, employer contributions, and investment returns) and 2019 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. The 2019 Budget also includes expenditures to support an internal initiative to modernize the IT systems IMRF uses to administer its benefits program.
You can view the 2019 Budget within the Transparency Portal section of IMRF’s website.
Staff updates Board on Legislation
Two bills impacting IMRF were introduced during the General Assembly’s November veto session, according to a report from IMRF Legislative Liaison Bonnie Shadid.
Senate Bill 3638 would extend the definition of “emerging investment manager” to include investment managers with Assets Under Management (AUM) of between $10 million and $10 billion at the time of initial contract, even if their AUM increases above that amount later. It would also exempt from competitive bidding requirements any contract with an emerging investment manager.
Senate Bill 3639 would require all public pension funds, except downstate police and fire pension funds, to make pension board and committee meetings available by live stream on the Fund’s website.
The General Assembly adjourns its current session on January 8, 2019. All pending bills will be dead at that point and would need to be reintroduced as new bills into the new General Assembly session, which begins on January 9, 2019.
New units of government join IMRF
The Board approved the participation of the following new employers:
- City of Litchfield
- Hillsboro Area Public Library District
- Old Ripley Township
- Pilot-Norton Multi-Township Assessment District
- QComm 911 Emergency Communication Center
Next Board meeting
The next regular meeting of the IMRF Board of Trustees will be December 14 at 9 a.m. at IMRF’s Oak Brook headquarters.