Ill. Admin. Code tit. 50, § 4404.50 - Method for Calculation of the True Cost

Current through Register Vol. 46, No. 15, April 8, 2022

a) The qualified actuary shall provide the current pension fund with the actuarial accrued liability assuming continuation of active status, and the amount of reserve for each possible status that may apply to the officer as set forth in subsection (b) of this Section. The actuarial accrued liability and reserve amounts shall be computed utilizing the actuarial cost method and the same assumptions that were used for determining the most recent actuarial valuation for the current pension fund.
b) The possible status choices that may be considered, in addition to the requirement of remaining active as an officer until the completion of the transfer, are: retirement, deferred retirement, disability and withdrawal. For each applicable status choice, the actuary shall provide the current pension fund with two actuarial accrued liability, or reserve, amounts. The first amount shall be the actuarial accrued liability, or reserve, computed using the combined years of service in the current fund and previous funds. The second amount shall be the actuarial accrued liability, or reserve, computed using only the years of service in the current fund. These amounts shall be computed as of the date the current pension fund receives the request for transfer of creditable service. The benefit amounts used in computing the actuarial accrued liability or reserve, amounts shall be consistent with the years of service used in each separate actuarial accrued liability, or reserve, amount calculation. The true cost for each status shall be equal to the excess of the amount computed using the combined years of service in all funds over the amount computed using the years of service in the current pension fund.
c) The method of calculating the true cost of transferring creditable service time shall be dependent on the anticipated status of the officer as determined by the current pension fund at the time of the service transfer or immediately thereafter. It is the current pension fund's responsibility to determine the most likely status of the officer after the transfer of creditable service time.
d) The current pension fund board of trustees shall determine the true cost for the requested period of creditable service time with information provided to the current pension fund by either:
1) the Illinois Department of Insurance, upon written request submitted in the format prescribed by Illustration A of this Part. The Department will return the information requested within 30 days after receipt of the request, if the Department's actuarial valuation was used for determining the most recent funding requirements of the current pension fund; or
2) the qualified actuary who was retained by the municipality or pension fund to determine the most recent actuarial valuation used for determining the funding requirements of the current fund.

Notes

Ill. Admin. Code tit. 50, § 4404.50

Amended at 35 Ill. Reg. 2120, effective January 24, 2011

The following state regulations pages link to this page.



State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.