Illinois Municipal Retirement Fund Employer Digest
January 31, 2013
In This Issue
General Memo 634: 2012 Investment Returns
2013 Maximum Wages
2013 Employer Rates
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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 

 

2013 maximum IMRF wages

Maximum wages for Tier 2 members
Tier 2 member wages do not include compensation in excess of $109,971.43 (for 2013). You continue to report earnings over $109,971.43. But you do not withhold IMRF contributions for any wages that exceed this amount. IMRF will not  accept contributions over this amount for Tier 2 members.

Maximum wages for Tier 1 members
IMRF Tier 1 member wages do not include compensation in excess of $255,000 (for 2013). Federal law limits the amount of wages that can be used for pension purposes. This limit only applies to IMRF Tier 1 members who started IMRF participation after 1995. 

You do not withhold IMRF contributions nor report earnings for any wages that exceed this amount.

 

See more details in the full January 2013 Reminder.   

 

Reminder: 2013 employer rates

In November 2012, we provided all Authorized Agents with an Official Rate Notice for 2013. The Official Rate Notice gives a breakdown of your employer's 2013 rate (including early retirement incentive, if appropriate).
  • Retirement benefits: each employer's rate is calculated separately, based upon actuarial costs.
  • Death benefits: each employer's rate is calculated separately based on the average age of its employees.   
  • Disability benefits: all employers pay the same rate.   
  • Supplemental benefit payment (13th payment): the rate is fixed by statute and all employers pay the same rate.
Use your 2013 employer rate when reporting wages paid in January 2013. This month is the first month you will calculate employer contributions using your 2013 employer rate.

Your rate is displayed on your Web Wage Reporting electronic summary, and your contributions will be automatically calculated for you. The employer rate for 2013 is the same for Tier 1 and Tier 2.

To view your employer's rate on the web using your Employer Access account, click on the  "Display Contribution Rates" link. To view a copy of your Official Rate Notice, click on the "Display Document Archive" link. For additional questions about your rate, please call IMRF's Employer Relations Supervisor,  Audrey Brown-Ryce, at (630) 706-4246.

 

See more details in the full January 2013 Reminder.   

 

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