County staff outlines IMRF pretax option; committee directs education and employee survey before budget decision

Treasury staff presented a proposal to change how IMRF (Illinois Municipal Retirement Fund) contributions are calculated for employees who pay health-insurance premiums through payroll.

Paul (treasury staff) explained that the current IMRF calculation treats pay net of the employee's health-insurance premium, which reduces the reported salary used for IMRF calculations. The proposed change would calculate IMRF on gross pay (pre-health-insurance deduction) so affected employees would have a higher reported salary for pension calculations and thus potentially higher retirement benefits. Paul said the county's estimated additional cost under this approach would be about $3,974 per month if all eligible employees elected the pretax option; the estimate is the county's incremental contribution under the pretax calculation for the affected cohort in the current year.

Paul also explained the practical effect on employees: an employee who pays health insurance (for example, family coverage) would see a slightly smaller net pay because additional amounts would be contributed to IMRF pretax rather than remaining in take-home pay, but the employee's IMRF account and final rate-of-earnings calculation would increase. The change would convert an existing after-tax option into a pretax payroll process. Treasury staff and committee members discussed operational considerations: payroll pay codes, IMRF rules, union contracts, and whether the change would require memoranda of understanding with bargaining units. Legal staff said the change would likely be elective and not require contract re-opening, but the committee asked staff to confirm with labor counsel.

Committee members pressed both cost and process questions. Several members suggested the county should not implement the change midyear and that the preferred path would be to educate employees, solicit input by survey, discuss with department heads, and, if supported, include the change in the next budget cycle so costs can be planned. The committee agreed to proceed with education and a survey: staff will present information at the upcoming department-head meeting, prepare educational materials, issue an employee survey on interest, and return to the committee with survey results and budget implications. No formal policy change or payroll implementation was approved at the meeting.

Ending: The committee directed staff to prepare employee education materials, run a survey on interest in the pretax IMRF option, and include findings for consideration in the next budget cycle.