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Wednesday, August 10, 2016

New Law Creates Potential Liability for Public Employers Who Hire IMRF Retirees

Municipalities that hire individuals who are receiving an IMRF pension may be required to pay a penalty to IMRF if the employer knowingly fails to notify IMRF to suspend that individual’s annuity during the term of employment under a new law just passed by the Illinois General Assembly.

The Illinois Pension Code requires the suspension of a retiree's IMRF pension if the retiree returns to work for an IMRF employer and works more than the government employer’s hourly standard for participation in IMRF (599 hours or 999 hours).  Public Act 099-0745 (effective immediately) will now create a duty for the government employer to notify IMRF that it has hired or re-hired an IMRF retiree. If the government employer knowingly fails to notify IMRF to suspend the annuity, and the employee works more than the employer’s IMRF hourly standard, the employer and the employee will each be liable to reimburse IMRF for up to one-half of the amount of any IMRF annuity payments made to the employee after the date the annuity should have been suspended.   The reimbursement provision is not applicable if the individual returned to work for less than twelve months.

IMRF employers should ask candidates if they are receiving an IMRF annuity and contact IMRF to discuss the potential ramifications of hiring an IMRF retiree prior to making an offer of employment.  If the government employer decides to hire the retiree to work a number of hours in excess of the IMRF hourly standard, the employer must provide the required notice to IMRF. 

Post authored by Jim Rock, Ancel Glink


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