Section 6 - IMRF

Illinois Municipal Retirement Fund Member Accounts / Past Service / Employer Resolutions / SECTION 6
If the member will continue working for his or her IMRF employer
A member may take a refund of Voluntary Additional Contributions without interest while he or she is still
working for an IMRF employer. The interest must stay on deposit until the member stops working for his or
her IMRF employer.
The interest will continue to earn interest until the member stops working for his or her IMRF employer and
applies for a refund of the interest.
If the member stops working for his or her IMRF employer and applies for a refund of Voluntary Additional
Contributions
A member may take a refund of Voluntary Additional Contributions with interest if he or she is no longer for
an IMRF employer.
If the member is less than age 59-1/2, the taxable portion of the refund (the interest earned) will be subject to
income tax penalties. The member can avoid these income tax penalties by rolling over the taxable portion
into an IRA or other qualified retirement plan. Unless the taxable portion is directly rolled over, federal law
requires IMRF to make a 20% tax withholding.
If the member stops working for his or her IMRF employer and applies for a refund of usual IMRF member
contributions (a “separation refund)
The Voluntary Additional Contributions with interest must be refunded at the same time.
If the member is less than age 59-1/2 when he or she applies for a separation refund, the taxable portion of the
refund (interest) will be subject to income tax penalties. The member can avoid these income tax penalties by
rolling over the taxable portion into an IRA or other qualified retirement plan. Unless the taxable portion is
directly rolled over, federal law requires IMRF to make a 20% tax withholding.
Upon termination of participation, if the member applies for a separation refund, the accumulated voluntary
additional contributions with interest must also be withdrawn. If the usual IMRF contributions are left on deposit,
the member has the option of leaving the voluntary additional contributions on deposit or withdrawing them.
Upon retirement, the voluntary additional contributions and interest may be applied to a monthly annuity payable
for life, provided the member’s account balance is $4500 or more, OR withdrawn in a lump sum.
Upon death, the accumulated voluntary additional contributions with interest are payable to the member’s
beneficiary(ies).
6.20 D. Election to Cease Making IMRF Contributions (Form 6.24, Exhibit 6V)
A member who currently participates in IMRF and has 40 or more years of service credit can elect to stop making
IMRF contributions. Use Form 6.24, “40-Year Service Election to Cease Contributions,” to stop member and
employer retirement contributions for the member.
A member with 40 years of IMRF service credit is allowed this option because the maximum IMRF pension
payable is 75% of a member’s final rate of earnings (FRE). That 75% is earned after 40 years.
If a member chooses to stop making contributions to IMRF, he or she will receive the 4-1/2% of salary that would
have been contributed to IMRF (less federal and state income taxes). The member’s FRE will be frozen as of the
effective date of the election.
The member will continue to be treated as a participating member for the purposes of death and disability benefits.
That is, the member will remain eligible for IMRF death and disability benefits (assuming all other benefit
eligibility requirements are met.)
January 2014 Page 237