General Memo 516

Paperwork

Meetings to discuss IMRF’s 2003 Investment Return and the impact on Employer Contribution Rates

March 12, 2004

In late March and early April 2004, you will receive your Advance Rate Notice for employer contributions to IMRF in calendar year 2005, your Employer Reserve Statement, and your GASB 27 Footnote Disclosure.

While IMRF earned 22.5% on a market basis in 2003, its actuarial return—the return that impacts employer contribution rates—was 5%. The difference between the returns is due to the five-year averaging technique used to minimize large annual fluctuations in employer contribution rates.

As of December 31, 2003, IMRF had $1.2 billion of unrecognized investment losses from the 2000 through 2002 period. As a result of these losses, most employers will see an increase in rates. The increases will vary greatly. We know you and others in your unit of government may have questions about these increases and the prospects for future increases to employer rates.

The IMRF Chief Financial Officer and I have scheduled meetings throughout the state to meet with you and other representatives of your employer to discuss IMRF’s recent results and to answer your questions.

The meetings will take an hour-and-a-half, consisting of both a formal presentation and a question and answer period. We encourage you, the chief financial officer, other officials, governing board members, and other interested parties from your employer to attend.