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Governor Rauner recently signed into law the Illinois Local Government Wage Increase Transparency Act. The Act requires the advance disclosure in a public meeting of certain wage payments made by employers to retiring IMRF employees. Additionally, the bill amends the Open Meetings Act to require that a meeting to consider such a disclosable payment must be open to the public with proper notice. Public Act 99-646 took effect July 28, 2016.

The Act applies only to employees who became participants in IMRF before January 1, 2011, and are not subject to a collective bargaining agreement.  The Act defines “disclosable payment” as any payment, through an increase in rate of earnings or as a lump-payment, that: (1) is made after an IMRF participating employee expresses to the employer the intent to retire or withdraw from service; (2) would increase the employee’s IMRF reportable monthly earnings from that employer by more than 6% over the previous month; and (3) would be made between 12 months and 90 days prior to the IMRF employee’s termination of service.  A disclosable payment does not include any payment required to be made by State or federal law.

The Act provides that, before a disclosable payment may be made to an IMRF employee, the public body must discuss that specific payment at an open session meeting held in accordance with OMA. At the meeting, the public body must at least disclose the identity of the employee, the purpose and amount of the payment, the proposed retirement date, the effect of the payment on the retirement annuity of the employee, and the effect of the payment upon the liability of the employer to the IMRF.  The IMRF has established a page on its website, “Payments to Retiring Employees” under its “Employers” tab, for employers to use to gain more insight into this law.  This page also contains a Quicklink to a “Pension Cost Estimation Spreadsheet” that employers can use to determine their financial liability to IMRF as a result of the payment. The determination of whether the disclosable payment is permissible under the law shall rest exclusively with the employer.   Please contact Heather Brickman or Barbara Erickson with questions about this new law.