Board Resolution 2008-01-05(b)

Meeting room

Topic: Creditable Service
Subtopic: Interest Charges - Omitted Service
Date: 1/25/2008
Status: Active

WHEREAS, the Illinois Pension Code 7-209(f) provides that the Board of Trustees shall fix the rate of interest to be charged on past service contributions and shall fix the method of computation to be used and the interest to be credited to employee and employer reserves, and

WHEREAS, the IMRF Board of Trustees has previously ruled that interest shall be charged participants eligible for omitted service from the end of the omitted service period to December 31 of the year prior to the payment date;

WHEREAS, participants are eligible for omitted service only when employers fail to comply with Article 7 of the Illinois Pension Code by not enrolling employees at the earliest eligible participation date;

WHEREAS, charging employees interest at the effective rate on contributions that would have been payable had the participant been properly enrolled can create a financial hardship on participants resulting in their inability to pay for omitted service credit.

NOW, THEREFORE BE IT RESOLVED, that no interest shall be charged participants for omitted service credit effective March 1, 2008; that current pending applications charging interest be amended to eliminate the interest charge; and that there be no refund of interest to participants who previously paid for omitted service credit.

NOW, THEREFORE BE IT FURTHER RESOLVED, that Board Resolutions 2005-11-06 (c) and 2005-12-10 (c) be amended so as to delete any requirement that participants pay interest to establish omitted service.