IMRF Annual Valuation presented
Actuaries Gabriel, Roeder, Smith (GRS) and Co. presented IMRF's Actuarial Valuation for 2020 to the IMRF Board of Trustees. The 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 uses to set employer contribution rates for future years.
IMRF’s average employer cost is about 8.6% of payroll compared to the average Annual Required Contribution for employers in American public pension systems, which is currently about 18% of payroll. This underscores the value IMRF brings to its members at a very moderate cost.
According to the valuation:
- IMRF experienced a net gain in 2020, mostly due to the strong investment returns in recent years and changes in actuarial assumptions.
- Average 2022 rates will be lower than 2021 rates.
- 2023 employer rates will be affected by:
- An increase in Tier 2 members
- Continued recognition of $4.2 billion in unrecognized investment gains
- Market volatility
- Potential ongoing impact of the pandemic
- IMRF is now 94.1% funded, which is well above the national average.
Some demographic highlights from the valuation include:
Number of IMRF Members
| Members | As of 12/31/20 | As of 12/31/19 |
|---|---|---|
| Tier 1 Active | 87,731 | 96,333 |
| Tier 2 Active | 82,906 | 81,462 |
| Retirees | 140,808 | 136,707 |
| Inactive | 153,267 | 146,866 |
| Total | 464,712 | 461,368 |
Trustees approve plans for 2020 elections
The Board approved IMRF’s plan for conducting the Trustee election later this year. IMRF employers will elect one Executive Trustee for a five-year term that begins on January 1, 2022. This position will open when Executive Trustee David Miller’s current term expires on December 31, 2021.
The Trustee election will be administered similarly to past elections. The Board approved a ballot return due date of December 9, 2021, and a ballot counting date of December 10, 2021. IMRF’s website will be updated with the detailed election procedures on June 30.
Board passes resolutions
The Board passed the following resolutions:
- 2021-05-12(a) Surviving Spouse Repayment Resolution: Provides the rules regarding repayment of the surviving spouse refund when a retiree who retires without a qualified spouse then returns to service and re-retires with a qualified spouse.
- 2021-05-12(b) Security Offset Resolution: Sets forth rules regarding the reduction in disability benefits for Social Security Disability.
- 2021-05-12(c) Prepayment Recovery Resolution: Establishes a formal procedure to recover benefit prepayments from members and beneficiaries.
- 2021-05-12(d) Payment Procedure Resolution: Updates the process for granting a retirement benefit.
- 2021-05-12(e) Inactive Member Contributions Resolution: Sets forth rules regarding inactive member accounts with a balance under $100.
- 2021-05-12(f) Death During Retirement Process Resolution: Clarifies the death benefit available at different stages of the retirement process with statutory references.
- 2021-05-12(g) May 2021 Rescinding Resolution: Rescinds 2010-01-07 and 1992-06-02, which have been superseded by statute or resolution.
Staff provides update on implementing 2020-2022 Strategic Plan objectives
IMRF Executive Director Brian Collins updated the Board on activities undertaken during the first quarter in support of the 2020-2022 Strategic Plan. Key successes within each of the Strategic Plan’s Key Result Areas (KRAs) included:
Financial Health
Approved $415 million in commitments to four private equity funds.
Customer Engagement
Successfully executed IMRF’s project to transition to online-only Member Statements. The initiative encouraged Member Access account creation (2,480 new accounts created in April), avoided printing 2.6 million pages, and saved IMRF more than $230,000 in printing/mailing costs.
Workforce Engagement
Developed and delivered IMRF’s first-ever Virtual Town Hall for IMRF staff. The sessions provided a look back at key organizational successes from 2020, highlighted key focus areas for 2021, and included an exercise aimed at underscoring the importance of maintaining connections with colleagues as staff spent more time working remotely. 89% of staff were “very satisfied” or “satisfied” with the Town Hall, which was an increase over the prior two administrations.
Operational Excellence
Presented at the virtual Baldrige Quest Conference in April. As a 2019 Baldrige Award recipient, IMRF had its own track of sessions highlighting our best practices across the Baldrige framework. IMRF will have an opportunity to formally accept the award during the 2022 event once the conference can be held in-person again.
Intergovernmental Agreement with Collinsville Area Recreation District
The Board approved an intergovernmental agreement with the Collinsville Area Recreation District (CARD), which was dissolved by voter referendum in November 2018. Since its dissolution, CARD has existed only to wind down its business and pay off debts. One of the open items that needed to be resolved before CARD could legally complete its dissolution was CARD’s IMRF liability. This intergovernmental agreement provides for a refund of an excess balance to CARD and allows IMRF to retain the remaining assets to pay any future claims for refunds of contributions or retirement annuities from inactive members.
Next Board meeting
The next meeting of the full IMRF Board of Trustees will be August 27.