General Memo 634
Impact of 2012 Investment Return on Employers
This preliminary information is based on unaudited investment return data and projected actuarial information. Finalized information will be available in early May 2013.
The estimated 2012 investment return for IMRF is 13.7%. This return translates into investment income of approximately $3.4 billion after expenses. From an actuarial basis, IMRF assumed it would earn $1.9 billion. The fact that IMRF earned approximately $1.5 billion more than its anticipated actuarial return will help to moderate future employer contribution rates.
Member and annuitant reserves will be credited approximately $1.4 billion as required by the Illinois Pension Code. Employer reserve balances will be credited with the balance, approximately $1.9 billion.
On average, employer accounts will be credited approximately 30% on their beginning of the year employer reserve balance. These credits reflect the fact that, as a sponsor of a defined benefit plan, IMRF employers share all the risks and rewards of investment returns.
The phase-in plan adopted by the IMRF Board of Trustees in 2009 (and modified in 2011) will remain in effect for 2014 rate purposes.
Upcoming Employer Rate meetings
Beginning on April 22, 2013, IMRF will present a series of Employer Rate meetings throughout the state. At these meetings we will discuss the impact of year-end financial and actuarial data on IMRF as a whole and its estimated impact on individual employers. We will also discuss other current topics impacting IMRF and pension plans in general. IMRF will also present the same information at a webinar in early May.
Read more in General Memo 634
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