Financial Results for FY 2022

IMRF Announces Preliminary Financial Results For FY 2022

IMRF saw a decrease in its investment portfolio in FY2022, but the good news is IMRF’s funded status remained strong.

Financial Highlights

During 2022, IMRF:

• had an investment portfolio decrease of about 16.5%, or $9.5 billion, resulting in a fiduciary net position of $48.2 billion as of December 31, 2022.
• maintained an actuarial funded status of about 98.2%.

These figures are estimates and unaudited. IMRF will share final figures in its Fiscal Year 2022 Annual Comprehensive Financial Report.

IMRF Is Nearly 100% Funded

Funded status is a key barometer of a pension plan’s fiscal health. The typical U.S. pension plan is about 74.9% funded, according to the National Association of State Retirement Administrators. IMRF’s 98.2% funded status means it has on hand today nearly all the money needed to pay the entirety of its pension obligations to all current retirees and active workers.

“Our funded status gives us complete confidence in our ability to deliver on our mission of providing retirement, disability, and death benefits to our nearly half a million members,” said Brian Collins, IMRF Executive Director.

Impact on Municipal Government Contributions

There will be some upward pressure on IMRF employer contribution rates in future years. The 2022 investment loss will first impact employer contribution rates in 2024. We do not know yet exactly how it will impact employer contribution rates. This information will be available to IMRF Employers in April when preliminary rate notices for 2024 are distributed.

Employers can be assured that IMRF’s use of the standard industry practice of ‘smoothing’ will help mitigate the impact on employer rates in any one year, because investment gains from prior years remain that IMRF has yet to recognize. For employer rate-setting purposes, this will counteract some of the impact of the 2022 negative investment return.

Market Outlook for 2023

Looking ahead to 2023, we expect continued market volatility due to high interest rates, persistent inflation, and economic fallout from the war in Ukraine.

The good news is that IMRF doesn’t invest the way an individual does, with a target date in mind. We are long-term investors, with a long-term investment time horizon, which means we can weather market downturns.

“By sticking to our proven strategies, the fund will maintain its superior funded status,” Collins said.

*Please note the numbers in the video were preliminary (February). The numbers in the article above are finalized (June).

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