R97-142 AUTHORIZING IMRF MILITARY SERVICE CREDITS

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FINANCIAL MANAGEMENT DEPARTMENT #97 - 25 September 23, 1997 MEMO TO: The Honorable Mayor and City Council Members FROM: James L. Willi ity Manager Beth B. Couter, ector of Financial Management � �^�'G SUBJECT: IMRF - Military Service Credit Legislation On August 16, 1997, Governor Edgar signed into law Public Act 90-0448, which allows Illinois Municipal Retirement Fund (IMRF)members to purchase Military Service Credit. • This is a purely optional program. It is up to each governing body of the local unit of government to determine whether it wishes to pass a resolution making its IMRF members eligible for service credit under this legislation. • The purchase of military service credit by IMRF members is a benefit designed to partially compensate veterans for their service in the armed forces. Public Act 90-0448 contains the language allowing IMRF members to purchase up to two years of IMRF service credit for time served in the military before the member began participating in IMRF. • Previously, members could purchase military service only if their IMRF employment was interrupted by military duty. • The expense of buying this additional service credit is paid solely by the employee. The employee is responsible for the payment of both the member and employer contributions plus interest. • The employee can pay all the amount due in one lump sum, or choose a payment plan which allows them to purchase one or more months at a time. • The legislation includes a "six-month window" reduced interest rate. If the IMRF member purchases the service credit during the "six-month window" (November 16, 1997 through May 16, 1998)the interest rate will be 2.5%. • Attached is a resolution which authorizes this benefit for the City's IMRF members.