Illinois Compiled Statutes 40 ILCS 5/9-169.2 – Minimum required employer contribution
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The minimum required employer contribution for a specified year, as set forth in the annual actuarial report required under Section 9-169.1, shall be the amount determined by the Fund’s actuary to be equal to the sum of: (i) the projected normal cost for pensions for that fiscal year based on the entry age actuarial cost method, plus (ii) a projected unfunded actuarial accrued liability amortization payment for pensions for the fiscal year, plus (iii) projected expenses for that fiscal year, plus (iv) interest to adjust for payment pattern during the fiscal year, less (v) projected employee contributions for that fiscal year.
The minimum required employer contribution for the next year shall be submitted annually by the county on or before June 14 of each year unless another time frame is agreed upon by the county and the Fund.
For the purposes of this Section:
“5-Year smoothed actuarial value of assets” means the value of assets as determined by a method that spreads the effect of each year’s investment return in excess of or below the expected return.
“Entry age actuarial cost method” means a method of determining the normal cost and is determined as a level percentage of pay that, if paid from entry age to the assumed retirement age, assuming all the actuarial assumptions are exactly met by experience and no changes in assumptions or benefit provisions, would accumulate to a fund sufficient to pay all benefits provided by the Fund.
“Layered amortization” means a technique that separately layers the different components of the unfunded actuarial accrued liabilities to be amortized over a fixed period not to exceed 30 years.
“Projected expenses” means the projected administrative expenses for the cost of administrating the Fund.
“Projected normal costs for pensions” means the cost of the benefits that accrue during the year for active members under the entry age actuarial cost method.
“Unfunded actuarial accrued liability amortization payment” means the annual contribution equal to the difference between the values of assets and the accrued liabilities of the plan, calculated by an actuary, needed to amortize the Fund’s liabilities over a period of 30 years starting in 2017, with layered amortization of the Fund’s unexpected unfunded actuarial accrued liability amortization payment following 2017 in periods of 30 years, with amortization payments increasing 2% per year, and reflecting a discount rate for all liabilities consistent with the assumed investment rate of return on fund assets and a 5-year smoothed actuarial value of assets.
The minimum required employer contribution for the next year shall be submitted annually by the county on or before June 14 of each year unless another time frame is agreed upon by the county and the Fund.
Terms Used In Illinois Compiled Statutes 40 ILCS 5/9-169.2
- Amortization: Paying off a loan by regular installments.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
For the purposes of this Section:
“5-Year smoothed actuarial value of assets” means the value of assets as determined by a method that spreads the effect of each year’s investment return in excess of or below the expected return.
“Entry age actuarial cost method” means a method of determining the normal cost and is determined as a level percentage of pay that, if paid from entry age to the assumed retirement age, assuming all the actuarial assumptions are exactly met by experience and no changes in assumptions or benefit provisions, would accumulate to a fund sufficient to pay all benefits provided by the Fund.
“Layered amortization” means a technique that separately layers the different components of the unfunded actuarial accrued liabilities to be amortized over a fixed period not to exceed 30 years.
“Projected expenses” means the projected administrative expenses for the cost of administrating the Fund.
“Projected normal costs for pensions” means the cost of the benefits that accrue during the year for active members under the entry age actuarial cost method.
“Unfunded actuarial accrued liability amortization payment” means the annual contribution equal to the difference between the values of assets and the accrued liabilities of the plan, calculated by an actuary, needed to amortize the Fund’s liabilities over a period of 30 years starting in 2017, with layered amortization of the Fund’s unexpected unfunded actuarial accrued liability amortization payment following 2017 in periods of 30 years, with amortization payments increasing 2% per year, and reflecting a discount rate for all liabilities consistent with the assumed investment rate of return on fund assets and a 5-year smoothed actuarial value of assets.