The Madison County Record Oct. 7, 2015, 7:52am


To the Editor:

It was disappointing to see the Sept. 25 edition of the Madison-St. Clair Record print the Illinois Policy Institute’s (IPI) unbalanced editorial, "Five things to know about Illinois' unsustainable municipal pension fund."

In its report, IPI authors use faulty reasoning to advance a false argument that the Illinois Municipal Retirement Fund (IMRF) is “unsustainable.” Public pension experts recognize IMRF as a national leader in the public pension industry. Illinois government watchdogs at the Better Government Association call IMRF “the state's best managed and most financially stable pension provider" and "a shining example" of how defined benefit plans can work.

For context, Record readers should know that the IPI seeks to eliminate defined benefit pensions. In pursuit of this goal, the IPI is willing to overlook facts that get in the way. In doing so, the IPI does a disservice not only to IMRF, but to Record readers as well.

Here are five facts that speak to IMRF’s sustainability:

1. IMRF’s fiduciary net position increased from $25.1 billion in 2010 to $34.9 billion in 2014, an increase of almost $10 billion.

2. IMRF’s funded status increased from 86.3 percent in 2010 to 93.1 percent in 2014. Experts consider a funded status above 80 percent to be healthy. Our goal remains to be 100 percent funded.

3. The typical IMRF retiree receives a modest pension, earned after decades of public service. In 2014, 63 percent of IMRF’s 112,762 retirees received an annual benefit of $12,000 or less. About 39 percent of those received a benefit of less than $6,000 annually. Less than one-half of 1 percent of retirees – many of whom include physicians, attorneys and others with advanced degrees – received more than $100,000.

4. Investment returns have historically funded 63 percent of all IMRF benefits. From 1982-2014, IMRF’s total fund return has topped 10 percent.

5. The Tier 2 reform of 2011 reduces the cost to taxpayers of an IMRF pension by 40 percent. As a result, the average contribution rate from local government to IMRF decreased from 2014 to 2015. By 2019, half of IMRF’s membership will be in Tier 2.

IMRF is highly sustainable. Indeed, the amount a retiree receives is 100 percent funded the day he retirees. We have never missed a pension payment to our retirees, and we never will.

For more information on IMRF’s sustainability, read our 2014 Popular Annual Financial Report at www.imrf.org.

John Krupa, IMRF Communications Manager

Oak Brook, Ill.

Organizations in this Story

Illinois Municipal Retirement Fund
2211 York Road
Oak Brook, IL 60523

Illinois Policy Institute
190 S La salle St
Chicago, IL 60603

Get notified the next time we write about any of these organizations!

More News