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. � � ' Exhibit 1 - Page 1 <br /> � <br /> IMRF Early Retirement Incentive Program <br /> Introduction <br /> The accompanying report illustrates the potential effects of the IMRF Early Retirement Incentive (ERI) Program <br /> on your unit of government.The enclosed report is an estimate which illustrates the additional liability (cost) <br /> created if your employer offers the ERI program.This cost may be partially offset if the ERI results in payroll and <br /> fringe benefit savings.Your employer is in the best position to determine whether or not the ERI will generate any <br /> overall savings.Participation in the ERI by any unit of government is voluntary and at the discretion of the <br /> goveming body. <br /> The effect of the ERI on any particular unit of government depends on the: <br /> • number of eligible members <br /> • number of inembers electing to retire under the ERI <br /> • employer's re-staffing plans <br /> • salary and fringe benefit costs for replacement employees. <br /> Because of differing demographics and other local conditions,not all employers will be able to save money <br /> under the ERI program. <br /> Data used to produce the report <br /> The attached report was based upon December 31,2002 data(our most current).The data was adjusted to the <br /> extent possible for employees who have already retired,who are expected to retire before the beginning of the ERI <br /> window,or who have service with Illinois reciprocal public pension systems. Independent actuaries Gabriel, <br /> Roeder, Smith and Company created the software for this report.Your unit of government provided input variables <br /> that were selected for this report. If the input variables do not reflect actual practice if/when your employer adopts <br /> the program,the results may vary considerably. <br /> Timing of costs <br /> Increased retirement costs due to ERI aze reflected in future IMRF employer contribution rates. If your <br /> employer adopts the ERI program,the cost of the ERI will be based on actual experience and will be reflected in <br /> the second calendar year's rate.For example,if your employer adopts ERI in 2003 and one of your employees <br /> retires under it,the cost for ERI will begin to be reflected in your 2005 employer rate. <br /> We will charge your employer a minimum of 7.50%interest every January 1 st that your employer has an <br /> outstanding ERI balance.In the above example,the first interest charge would be January l,2004.This report <br /> reflects estimated employer costs of the ERI. <br /> Summary of Provisions <br /> Eligible Members <br /> To be eligible to retire under ERI, a member must be at least age 50 years old and have 20 or more years of <br /> IMRF service credit by their date of retirement.The 20 years of service can include service credit earned with <br /> another IMRF employer and/or reciprocal service credit.These ERI requirements apply to regular IMRF members, <br /> Sheriff's Law Enforcement Personnel (SLEP)members,and Elected County Officials(ECO). <br /> Eligible members include IMRF members who were actively participating in IMRF on the effective date of their <br /> employer's ERI program.A member is considered active if he or she is on layoff status with right of re- <br /> employment,on IMRF Benefit Protection Leave of Absence,or receiving IMRF disability benefits for less than <br /> two years. <br /> Rev.6/03 Page 1 <br />