This was in my newsletter last month, but with tax bills coming out, I thought it would be pertinent to include it again.
Many of you have asked what Lake County's role is in overseeing pensions for our employees.
The bottom line is, we pay into the Illinois Municipal Retirement Fund, but policy decisions regarding who is entitled to what is set in Springfield.
Most importantly, you may have read about the Elected County Official (ECO) pension system (click here to read more). Lake County does not participate in this pension plan.
Here is how it works:
Lake County employees participate in IMRF (The Illinois Municipal Retirement Fund). IMRF was created by the Illinois General Assembly.
IMRF is not a state agency, and IMRF is not funded by the State of Illinois. IMRF is funded by participating individual municipal employers, participating employees and primarily by investment returns. IMRF has more than 180,000 active members working for nearly 3,000 different units of government, including school districts, counties, cities and villages, parks and libraries. It has more than 93,000 retirees.
Both County employees and Lake County government (as the employer) contribute into IMRF. Per State law, IMRF calculates the amount Lake County is required to contribute toward full funding; in other words, so the pension fund has enough money in reserve today to meet future pension obligations for benefits earned to date.
In 2010, IMRF earned a rate of return on investments of 13.4 percent, resulting in an 86.5% "Funded Status." This means for IMRF pension plans are 86% fully funded, which is very good - especially compared to state employee pension systems which legislators have underfunded for decades.
Members who retired in 2009 (with approximately 21 years of service) received an average annual benefit of approximately $11,000.
The State recently passed some reforms:
The State reformed the pension system last year, creating a "two-tier" system, where current employees keep their existing pension plans, but new hires join a tighter new system. New hires aren't able to retire with full benefits until age 67. The maximum salary on which their pension can be based is capped at $106,800. Their payout will be based on their highest salary during eight consecutive years of the last ten. Also, "Double-dipping," where a government employee retires, is re-hired by the government elsewhere, retires again, and collects two pensions, has been banned.
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