Illinois Municipal Retirement Fund
Encyclopedia
The Illinois Municipal Retirement Fund (or IMRF) is a pension fund created in 1939 by the Illinois General Assembly
for municipal employees in the state of Illinois
. IMRF began operating in 1941 with 5 original employers and $5,000 in assets. Presently, IMRF serves approximately 2,900 employers (Illinois units of government) and has more than $19 billion in assets.
Since 1941, IMRF has provided employees of local governments and school districts in Illinois (with the exception of the City of Chicago and Cook County, Illinois
) with a sound and efficient system for the payment of retirement, disability, and death benefits.
At the end of 2010, IMRF had $25 billion in assets and was 86.3% funded on a market basis. It administers benefits for approximately 176,000 actively participating local government workers and provides monthly retirement benefits to approximately 97,000 retired local government workers.
in Chicago. A.S. Hansen was appointed actuarial consultant and keeper of records; and at a subsequent meeting on December 17, 1937 he was appointed clerk of the board.
The only way employees of a local public utility could be covered by the fund was by local referendum. When employees petitioned for a referendum, other municipal employees were opposed on the grounds that it was unfair to give pensions only to MPU employees. After an MPU referendum was soundly defeated by the electorate of the City of Quincy, Illinois
, John Kerkering, an active member of ILPUE, was instrumental in forming the Illinois League of Municipal Employees (ILME). The primary purpose of ILME was to promote enactment of legislation to form IMRF.
The Illinois Municipal Retirement Fund was created through legislation enacted by the 61st General Assembly of the State of Illinois, effective July 29, 1939. The legislation directed the board of the MPU annuity and benefit fund to act for IMRF through December 31, 1940. At that time, the two trustees from the two largest utilities would remain on the board, and the remaining three would be replaced by one executive trustee elected by employers and two employee trustees elected by members.
The original board consisted of S.T. Anderson and Dennie Simmons of Springfield, Illinois
, H.S. Merz and Fred Yone of Rockford, Illinois
, and Manley A. Clark of Geneseo, Illinois
. No one petitioned the board for election as a board trustee in 1940, so the board remained unchanged. In 1941 S.G. Ingraham of Evanston, Illinois
was elected to the board with a total of two votes (no other candidate received any votes). In 1942 Alfred Nystrom of Galesburg
was the only candidate for board trustee to receive any votes, a total of seven. Mr. Nystrom was destined to play a key role in IMRF’s formative years and early development. He served on the board for 25 years and was president for 11 of those years.
The first meeting of the IMRF board was held on September 8, 1939, in the office of the MPU annuity and benefit fund at 135 S.
LaSalle St. in Chicago. A.S. Hansen was appointed actuary and clerk of the fund, responsible for records and benefits. The board directed a letter be sent to all municipalities in the state with a population of 5,000 or more advising them of their right to join IMRF. Employers could join IMRF by referendum only. The effective date was always January 1 of the year following passage of the referendum. It isn’t clear how the board met expenses during the early months of IMRF’s existence. The board directed the clerk to have stationery printed sometime in 1940 with the understanding that payment would be made when funds were received. This, of course, could not take place until some employers qualified to enter IMRF.
, City of Galesburg
, Village of Riverside
, Rockford Park District and City of Rockford
, entered IMRF. Contribution rates for members were set at 3½ percent of earnings. At the February 14, 1941, board meeting, employer contribution rates were set for the five original employers. IMRF finally had money coming in which could be used to meet operating expenses as well as pay benefits. The first benefit awards were approved at the March 28, 1941, board meeting. The awards consisted of one beneficiary and four retirement annuities. These were all money purchase annuities, the only type available in the early years. Money purchase annuities are funded by contributions made by the member and matched at a designated rate by the employer. At that same meeting, the board approved IMRF’s first investment, a $5,000 U.S. Treasury Bond
at 2½ percent due on March 15 of 1952 or 1954, with the assumption that 1952 was an option year.
the printing of 7,500 membership cards; but apparently they were never used. If they were used, they were discontinued within a short time.
The board meeting of November 23, 1945, was a significant one. At that meeting the board:
• Received the first actuarial report (for 1944).
• Appointed E.G. Hanson as the first executive director, effective January 1, 1946.
• Approved arrangements be made for space and equipment for a separate fund administrative office.
• Directed E.G. Hanson to hire a staff of four.
• Authorized an operating expense budget for 1946 of $24,666.
The original staff consisted of E.G. Hanson, executive director, James Glasgow, Cora Bradley and Virginia Salika. The office was located at 175 W. Jackson Blvd. in Chicago.
Bill 813 was passed by the legislature, effective January 1, 1948. It mandated participation by all Illinois school districts (except those located in the city of Chicago) and all their employees except those covered by the State Teachers Retirement System. The Illinois Education Association, at that time a professional association, was instrumental in bringing schools under IMRF, primarily because the Teachers Retirement System opposed including non-certificated personnel in its system. Coverage of schools increased the number of employers in IMRF from 156 to 652 and the number of members from 11,171 to 17,119.
In September 1947 the board estimated that the effect of school participation was additional space requirements. IMRF now required new office space of 2000 square feet (185.8 m²), a staff of 18 to 20, and equipment. The executive director was authorized to procure the necessary resources. At the October meeting the board approved a recommendation to move the fund offices to 309 W. Jackson Blvd., Chicago, effective January 1, 1948. At the December meeting of the board, the tallying of the ballots for executive trustee resulted in a tie, 243 to 243. Jack DeRosa was declared (by statute) to be the winner, as he was the candidate from the employer with the greater number of employees (DuPage County had 196, Champaign School District #4 had 49).
In September 1949 the board authorized a Blue Cross plan for IMRF staff. In December of that year, John Kerkering was declared winner of the position of executive trustee, then announced he could not accept it because he had resigned his position at Quincy. During those years the board seemed to make a distinction between employers who entered IMRF via resolution versus those who were mandated into the fund by legislation. One sees references to the number of employers to be,
for example, 276 by resolution, with no mention of the hundreds of schools which entered by mandate on January 1, 1948.
Some employers and employees were frustrated by their inability to get resolutions for IMRF participation passed at the local level. This situation apparently led to later efforts by the Illinois League of Municipal Employees to enact legislation which required participation by certain employer groups or at designated population levels.
Illinois General Assembly
The Illinois General Assembly is the state legislature of the U.S. state of Illinois and comprises the Illinois House of Representatives and the Illinois Senate. The General Assembly was created by the first state constitution adopted in 1818. Illinois has 59 legislative districts, with two...
for municipal employees in the state of Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...
. IMRF began operating in 1941 with 5 original employers and $5,000 in assets. Presently, IMRF serves approximately 2,900 employers (Illinois units of government) and has more than $19 billion in assets.
Since 1941, IMRF has provided employees of local governments and school districts in Illinois (with the exception of the City of Chicago and Cook County, Illinois
Cook County, Illinois
Cook County is a county in the U.S. state of Illinois, with its county seat in Chicago. It is the second most populous county in the United States after Los Angeles County. The county has 5,194,675 residents, which is 40.5 percent of all Illinois residents. Cook County's population is larger than...
) with a sound and efficient system for the payment of retirement, disability, and death benefits.
At the end of 2010, IMRF had $25 billion in assets and was 86.3% funded on a market basis. It administers benefits for approximately 176,000 actively participating local government workers and provides monthly retirement benefits to approximately 97,000 retired local government workers.
How IMRF was founded
An annuity and benefit fund for Illinois Municipal Public Utility (MPU) employees was established by the Illinois State Legislature, effective July 13, 1937. The MPU annuity and benefit fund was created through the effort of the Illinois League of Public Utility Employees (ILPUE) to get it passed by the Illinois General Assembly. A five-member board was established to administer the plan. The first meeting of the board took place on November 10, 1937, at 135 S. LaSalle StreetLaSalle Street
LaSalle Street is a major north-south street in Chicago named for Sieur de La Salle, an early explorer of Illinois. The portion that runs through the Loop is considered to be Chicago's financial district...
in Chicago. A.S. Hansen was appointed actuarial consultant and keeper of records; and at a subsequent meeting on December 17, 1937 he was appointed clerk of the board.
The only way employees of a local public utility could be covered by the fund was by local referendum. When employees petitioned for a referendum, other municipal employees were opposed on the grounds that it was unfair to give pensions only to MPU employees. After an MPU referendum was soundly defeated by the electorate of the City of Quincy, Illinois
Quincy, Illinois
Quincy, known as Illinois' "Gem City," is a river city along the Mississippi River and the county seat of Adams County. As of the 2010 census the city held a population of 40,633. The city anchors its own micropolitan area and is the economic and regional hub of West-central Illinois, catering a...
, John Kerkering, an active member of ILPUE, was instrumental in forming the Illinois League of Municipal Employees (ILME). The primary purpose of ILME was to promote enactment of legislation to form IMRF.
The Illinois Municipal Retirement Fund was created through legislation enacted by the 61st General Assembly of the State of Illinois, effective July 29, 1939. The legislation directed the board of the MPU annuity and benefit fund to act for IMRF through December 31, 1940. At that time, the two trustees from the two largest utilities would remain on the board, and the remaining three would be replaced by one executive trustee elected by employers and two employee trustees elected by members.
The original board consisted of S.T. Anderson and Dennie Simmons of Springfield, Illinois
Springfield, Illinois
Springfield is the third and current capital of the US state of Illinois and the county seat of Sangamon County with a population of 117,400 , making it the sixth most populated city in the state and the second most populated Illinois city outside of the Chicago Metropolitan Area...
, H.S. Merz and Fred Yone of Rockford, Illinois
Rockford, Illinois
Rockford is a mid-sized city located on both banks of the Rock River in far northern Illinois. Often referred to as "The Forest City", Rockford is the county seat of Winnebago County, Illinois, USA. As reported in the 2010 U.S. census, the city was home to 152,871 people, the third most populated...
, and Manley A. Clark of Geneseo, Illinois
Geneseo, Illinois
Geneseo is a city in Henry County, Illinois, United States. The population was 6,586 at the 2010 census, up from 6,571 at the 2000 census. Geneseo is located 20 miles east of The Quad Cities and Geneseo is part of the Quad Cities Metro Area....
. No one petitioned the board for election as a board trustee in 1940, so the board remained unchanged. In 1941 S.G. Ingraham of Evanston, Illinois
Evanston, Illinois
Evanston is a suburban municipality in Cook County, Illinois 12 miles north of downtown Chicago, bordering Chicago to the south, Skokie to the west, and Wilmette to the north, with an estimated population of 74,360 as of 2003. It is one of the North Shore communities that adjoin Lake Michigan...
was elected to the board with a total of two votes (no other candidate received any votes). In 1942 Alfred Nystrom of Galesburg
Galesburg, Illinois
Galesburg is a city in Knox County, Illinois, in the United States. As of the 2010 census, the city population was 32,195. It is the county seat of Knox County....
was the only candidate for board trustee to receive any votes, a total of seven. Mr. Nystrom was destined to play a key role in IMRF’s formative years and early development. He served on the board for 25 years and was president for 11 of those years.
The first meeting of the IMRF board was held on September 8, 1939, in the office of the MPU annuity and benefit fund at 135 S.
LaSalle St. in Chicago. A.S. Hansen was appointed actuary and clerk of the fund, responsible for records and benefits. The board directed a letter be sent to all municipalities in the state with a population of 5,000 or more advising them of their right to join IMRF. Employers could join IMRF by referendum only. The effective date was always January 1 of the year following passage of the referendum. It isn’t clear how the board met expenses during the early months of IMRF’s existence. The board directed the clerk to have stationery printed sometime in 1940 with the understanding that payment would be made when funds were received. This, of course, could not take place until some employers qualified to enter IMRF.
Five original employers enroll
On January 1, 1941, the five original employers, City of EvanstonEvanston, Illinois
Evanston is a suburban municipality in Cook County, Illinois 12 miles north of downtown Chicago, bordering Chicago to the south, Skokie to the west, and Wilmette to the north, with an estimated population of 74,360 as of 2003. It is one of the North Shore communities that adjoin Lake Michigan...
, City of Galesburg
Galesburg, Illinois
Galesburg is a city in Knox County, Illinois, in the United States. As of the 2010 census, the city population was 32,195. It is the county seat of Knox County....
, Village of Riverside
Riverside, Illinois
Riverside is an affluent suburban village in Cook County, Illinois. A significant portion of the village is in the Riverside Landscape Architecture District, designated a National Historic Landmark in 1970. The population was 8,895 at the 2000 census...
, Rockford Park District and City of Rockford
Rockford, Illinois
Rockford is a mid-sized city located on both banks of the Rock River in far northern Illinois. Often referred to as "The Forest City", Rockford is the county seat of Winnebago County, Illinois, USA. As reported in the 2010 U.S. census, the city was home to 152,871 people, the third most populated...
, entered IMRF. Contribution rates for members were set at 3½ percent of earnings. At the February 14, 1941, board meeting, employer contribution rates were set for the five original employers. IMRF finally had money coming in which could be used to meet operating expenses as well as pay benefits. The first benefit awards were approved at the March 28, 1941, board meeting. The awards consisted of one beneficiary and four retirement annuities. These were all money purchase annuities, the only type available in the early years. Money purchase annuities are funded by contributions made by the member and matched at a designated rate by the employer. At that same meeting, the board approved IMRF’s first investment, a $5,000 U.S. Treasury Bond
Treasury security
A United States Treasury security is government debt issued by the United States Department of the Treasury through the Bureau of the Public Debt. Treasury securities are the debt financing instruments of the United States federal government, and they are often referred to simply as Treasuries...
at 2½ percent due on March 15 of 1952 or 1954, with the assumption that 1952 was an option year.
The early years of IMRF
Things were rather quiet at IMRF over the next few years. On January 1, 1942, 10 more employers entered for a total of 15. On June 25, 1943, E.G. Hanson was authorized by the board to act for the fund in the absence of A.S. Hansen. The fund opened the year 1944 with 47 employers and almost 4,000 members. During the year the board engaged the firm of Doty & Dawson to perform an audit for 1941 and 1942, the first audit of IMRF. The report was received on December 15. During 1945 the board orderedthe printing of 7,500 membership cards; but apparently they were never used. If they were used, they were discontinued within a short time.
The board meeting of November 23, 1945, was a significant one. At that meeting the board:
• Received the first actuarial report (for 1944).
• Appointed E.G. Hanson as the first executive director, effective January 1, 1946.
• Approved arrangements be made for space and equipment for a separate fund administrative office.
• Directed E.G. Hanson to hire a staff of four.
• Authorized an operating expense budget for 1946 of $24,666.
The original staff consisted of E.G. Hanson, executive director, James Glasgow, Cora Bradley and Virginia Salika. The office was located at 175 W. Jackson Blvd. in Chicago.
Additional groups covered
In 1947 the Illinois legislature required the IMRF staff to participate as members of the system. Later in that same year HouseBill 813 was passed by the legislature, effective January 1, 1948. It mandated participation by all Illinois school districts (except those located in the city of Chicago) and all their employees except those covered by the State Teachers Retirement System. The Illinois Education Association, at that time a professional association, was instrumental in bringing schools under IMRF, primarily because the Teachers Retirement System opposed including non-certificated personnel in its system. Coverage of schools increased the number of employers in IMRF from 156 to 652 and the number of members from 11,171 to 17,119.
In September 1947 the board estimated that the effect of school participation was additional space requirements. IMRF now required new office space of 2000 square feet (185.8 m²), a staff of 18 to 20, and equipment. The executive director was authorized to procure the necessary resources. At the October meeting the board approved a recommendation to move the fund offices to 309 W. Jackson Blvd., Chicago, effective January 1, 1948. At the December meeting of the board, the tallying of the ballots for executive trustee resulted in a tie, 243 to 243. Jack DeRosa was declared (by statute) to be the winner, as he was the candidate from the employer with the greater number of employees (DuPage County had 196, Champaign School District #4 had 49).
In September 1949 the board authorized a Blue Cross plan for IMRF staff. In December of that year, John Kerkering was declared winner of the position of executive trustee, then announced he could not accept it because he had resigned his position at Quincy. During those years the board seemed to make a distinction between employers who entered IMRF via resolution versus those who were mandated into the fund by legislation. One sees references to the number of employers to be,
for example, 276 by resolution, with no mention of the hundreds of schools which entered by mandate on January 1, 1948.
Some employers and employees were frustrated by their inability to get resolutions for IMRF participation passed at the local level. This situation apparently led to later efforts by the Illinois League of Municipal Employees to enact legislation which required participation by certain employer groups or at designated population levels.