Cost estimate requirement for Early Retirement Incentive
April 3, 2002
The IMRF Board of Trustees has changed the requirements for adoption of an Early Retirement Incentive (ERI). Effective February 22, 2002, a cost estimate must be prepared and shared with your employer’s governing body before it adopts ERI. The ERI resolution has been revised to acknowledge this requirement.
Not only will a cost estimate provide an employer with potential and estimated costs of ERI, it will also make employers aware of eligible employees (with 20 or more years of IMRF service credit) an employer may not know about.
The cost estimate must be based on the same time period as the ERI being considered by the governing body. If your employer does not know when it will offer the ERI, your IMRF Field Representative can prepare multiple cost estimates each using a different time period.
When an employer submits the ERI resolution (IMRF Form 6.77) to IMRF, it should include a copy of the cost estimate for the period of the adopted ERI.
If your employer submits the ERI resolution without a cost estimate, IMRF will not implement the program, and your employer will need to both conduct the cost estimate and adopt a second resolution.
Please note: beginning this summer, ERI cost estimates prepared by IMRF will no longer include potential cost savings of the ERI. Because the figures used to estimate cost savings are not under IMRF’s control, estimates of potential cost savings are more appropriately prepared by the employer using the ERI costs provided by IMRF.
If your employer is considering adopting an ERI, please contact your IMRF Field Representative to request a cost estimate. Your local Field Representative will be able to calculate the annual increased pension costs. The cost estimate will be completed at no charge to your employer.
IMRF ERI materials are being updated to reflect this new requirement. A copy of the revised resolution is enclosed.
If you have any questions, please contact your IMRF Field Representative or call an IMRF Member Service Representative at 1-800-ASK-IMRF (1-800-275-4673) Monday through Friday, 730 A.M. to 5:30 P.M.
IMPORTANT NOTE REGARDING ERI COST ESTIMATES
- When an employer submits the ERI resolution to IMRF, it should include a copy of the cost estimate for the period of the adopted ERI.
- If an employer submits the ERI resolution without a cost estimate:
- IMRF will not implement the program, and
- the employer will need to both conduct the cost estimate and adopt a second resolution.
- Contact your IMRF Field Representative to request a cost estimate. Your local Field Representative will be able to calculate the annual increased pension costs. The cost estimate will be completed at no charge to the employer.