Bill
SB 1267
IMRF board may apportion repayment responsibility between an employer and annuitant when an annuitant wasn’t properly suspended after returning to work.
Status & context
- Bill: SB 1267 — “PEN CD‑IMRF‑ANNUITY SUSPENSION”
- Introduced: January 28 / filed Feb 13, 2025 (by Sen. Karina Villa)
- Code sections amended: 40 ILCS 5/7‑141 and 40 ILCS 5/7‑144 (Illinois Pension Code, IMRF Article); adds 30 ILCS 805/8.49 (State Mandates Act)
- Current status (as provided): Rule 3‑9(a) / Re‑referred to Assignments (March 2025)
- Note: the supplied document contains unrelated text from other states; this summary addresses the Illinois IMRF provisions of SB 1267.
Purpose / intent
The bill clarifies how the Illinois Municipal Retirement Fund (IMRF) handles situations where an annuitant (a retired member receiving an IMRF annuity) did not have a formal separation from service or returned to work, and the participating employer knowingly failed to notify IMRF to suspend the annuity. It gives the IMRF Board discretion to apportion responsibility for repayment of annuity payments made after the date the annuity should have been suspended.
Key provisions
- New Board authority (40 ILCS 5/7‑141(a‑5) and parallel changes to 7‑144):
- If an annuitant must be treated as a participating employee because there was no separation from service (or because the annuitant returned to qualifying employment) and the participating municipality/instrumentality knowingly failed to notify the IMRF Board to suspend the annuity, the IMRF Board may:
- Review the totality of circumstances and
- Assign proportionate responsibility for reimbursement of the total annuity payments made after the date the annuity should have been suspended between the employer and the annuitant, offset by any amount the annuitant has already repaid.
- A strict recovery limit: the sum of amounts repaid by the annuitant plus any employer reimbursement to the Fund may not exceed the total of annuity payments made after the suspension date.
- Removal of a prior exception: language exempting application of these provisions where the annuitant returned to work for the employer for less than 12 months is removed.
- Conforming changes: similar language added to the provision governing separation from service and entitlement to a retirement annuity.
- State Mandates Act (30 ILCS 805/8.49 — new): requires implementation of these provisions “without reimbursement,” meaning local governments would not receive state reimbursement for any costs imposed by the mandate.
Who would be affected
- IMRF annuitants who return to work or did not formally separate from service.
- Participating municipalities and instrumentalities (local governments and other IMRF employers) that employ or re‑employ annuitants.
- The IMRF Board (additional review and discretionary assignment duties).
- IMRF (financial/accounting impacts when recovering overpayments).
- Local governments could bear unreimbursed costs due to the State Mandates Act amendment.
Potential impacts and considerations
- Shifts decision authority to the IMRF Board to apportion repayment responsibility based on circumstances, replacing (or broadening) earlier fixed limits (previous statutory language had allowed employer reimbursement “up to one‑half” in some cases).
- Removes a brief‑employment safe harbor (<12 months), potentially expanding recovery exposure for employers and annuitants.
- Caps total recovery at the amount of annuity payments improperly received — protecting against over‑recovery.
- The State Mandates Act change could expose local governments to unreimbursed financial obligations arising from Board determinations.
- Administrative workload for IMRF: investigations and case‑by‑case determinations of proportional responsibility.
Next procedural steps
- The bill was re‑referred to Assignments (Rule 3‑9a) after initial referral to Pensions. Further committee consideration and floor action will determine advancement.
Compiled from official sources — confirm details with the bill’s official record.
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