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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