Employers may now access their 2020 Preliminary Contribution Rate Notice in Employer Access. This notice provides employers with their estimated 2020 actuarial determined contribution (ADC) rate for its IMRF plans, and is necessary for financial planning, accounting, and reporting purposes.
Optional Phase-In Rate
This year, the IMRF Board of Trustees approved a phase-in rate for the Regular plan only that employers may select at their option. Due to the change to IMRF’s assumed rate of return and the 2018 investment loss, some employers my experience an increase in their 2020 rates. Selecting the phase-in rate spreads that increased cost over multiple years.
The optional phase-in rate for each employer’s Regular plan is calculated by IMRF’s actuaries using each employer’s ADC rate. Employers with an ADC rate higher than the phase-in rate will see this option on their notice and will have until Friday, August 30, 2019, to select their 2020 contribution rate via email to Dionne Green, Employer/Member Data Unit Supervisor at dngreen@imrf.org.
For 2020, certain employers may select one of the following rate options for their Regular plan:
- ADC rate
- Optional phase-in rate
- Rate between the ADC and phase-in
If IMRF does not hear back from an employer by August 30, we will assume the employer has chosen their ADC rate for 2020. Your employer’s optional phase-in rate can be found on its 2020 Preliminary Rate Contribution Notice in Employer Access.
Impact of Selecting Phase-In Rate
Selecting the optional phase-in rate for the Regular plan will result in lower total contributions in 2020. However, this option will also result in higher contributions over the long term due to carrying costs related to an employer’s higher unfunded liability. IMRF encourages employers with the financial capability to contribute at the ADC rate in 2020.
Lump Sum Contributions
In addition to paying normal contributions through the monthly wage reporting process, employers may also make lump sum contributions to reduce their unfunded liability. Lump sum contributions can be made any time during the year; however, it is most advantageous for employers to make these payments in December due to IMRF granting interest on new calendar year balances.
Employer considering additional payments should contact IMRF first for assistance. To make lump sum payments, employers may use IMRF’s online or pay-by-phone Electronic Funds Transfer (EFT) system.
Questions and Information
For questions about 2020 Preliminary Contribution Rate Notices and the optional phase-in rate, please send IMRF a secure message, or contact Employer/Member Data Unit Supervisor Dionne Green at 630-706-4234 or Financial Relations Manager Audrey Brown-Ryce at 630-706-4246.
To learn more about how IMRF calculates employer rates, attend an Employer Rate Meeting this spring. Click here for more details.
