Board approves 2023 rates
The Board approved IMRF employer contribution rates for the 2023 calendar year. The rates, which are unique to each IMRF employer, are expressed as a percentage of payroll. The average employer contribution rate for the Regular Plan will decrease from 8.59% in 2022 to 6.55% in 2023.
IMRF employers may access their 2023 Final Rate Notice in Employer Access.
Actuarial consultant provides forecast
Independent actuary GRS Consulting provided the Board a forecast of how future employer contribution rates might be impacted if the investment markets continue to struggle during 2022.
Senior Consultant Mark Buis said that IMRF assumes its investment portfolio will earn 7.25% in the long-term. When IMRF exceeds that return assumption, employer contribution rates go down in future years. When IMRF falls below that return assumption, employer contribution rates go up in future years. If IMRF falls below its return assumption during 2022, employer contribution rates will first be affected in 2024.
Buis said that any potential investment loss during 2022 will be partially offset by unrecognized investment gains from prior years. As is common in the pension industry, every year IMRF only recognizes 20% of the investment gain or loss for rate-setting purposes. This practice reduces annual volatility in employer contribution rates, “smoothing” rates from year-to-year. Because of historically high investment returns from 2019-2021, IMRF had about $7 billion worth of unrecognized investment gains at the end of 2021 for rate-setting purposes.
This is good news and will help mitigate any investment loss during 2022, Buis said.
“This is a perfect example of why we smooth investment gains and losses in a pension plan,” he said. “IMRF is well-funded and in great shape to withstand a difficult year.”
IMRF ranks near top of North American public pensions in cost-effective customer service, report concludes
IMRF continues to be one of the leading public pensions in North America in terms of cost-effective customer service, according to a new report. Michael Everett, IMRF’s Organizational Excellence Officer, presented the 2021 CEM Benchmarking report.
This type of peer comparative analysis can result in significant benefits:
- Improved service, quality, and productivity
- Improved performance measurement
- Exposes our organization to new methods, ideas, and tools
In 2021, IMRF continued to have either a perfect score or scored above peer median across all measured activities. IMRF attained a score of 87, compared to a peer median of 75. The CEM annual study compares public pensions’ customer-service levels and total spending. The study includes some of the largest public pensions in North America. The CEM report showed IMRF’s total cost per member and annuitant of $94, which was $32 below the peer average. This came despite operating in the third-highest cost environment.
The study helps us identify customer service activities offering improvement possibilities, Everett said. This is consistent with our ongoing Journey of Excellence initiatives, and with our approach to continuous process improvement. In 2019, IMRF became the first public pension fund in the nation to receive the Malcolm Baldrige National Quality Award.
Staff provides quarterly update on 2020-2022 Strategic Plan’s implementation
IMRF Executive Director Brian Collins updated the Board on activities undertaken during the third 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
Wilshire, IMRF’s Investment Consultant, and IMRF staff presented an educational session for the Board of Trustees on Public Markets Risk.
Customer Engagement
A new technology allowing 1-800-ASK-IMRF callers placed on hold to receive a return phone call was rolled out in early November 2022. IMRF is experiencing strong usage of this new feature.
Workforce Engagement
IMRF hosted a staff event as part of efforts to enhance inter-departmental relationships.
Operational Excellence
Knowledge gathering continues regarding Enterprise Risk Management. This initiative will continue in the 2023-2025 Strategic Plan.
New units of government join IMRF
The Board approved the participation of the following new employers:
- Village of Equality
- Sangamon Valley Public Water District
- Bradford Public Library District
Next Board meeting
The next regular meeting of the IMRF Board of Trustees will be December 16 at 9 AM.