The information on this page applies to participants of all IMRF plans.
You may plan to stay at your current job for years, or maybe you’ve already got an eye on the exit. Either way, it’s never too early to think about what you’d do with your IMRF retirement savings if you did move on.
Note that you must terminate employment with your IMRF employer, not just change positions, to receive a refund or rollover of member contributions.
What are your options when you leave your IMRF employer?
With some exceptions, when you leave your job you can:
Learn your options and then decide
Each of the options has details and variables that may save or cost you money, so let us tell you more about each option. Note: there is no charge or penalty for leaving contributions on deposit with IMRF, and there is no amount of time in which you have to make a decision about contributions before age 70-1/2. However, it is important to understand that you will not receive interest when you apply for a separation refund, no matter how long the funds are on deposit with IMRF.
When you take a refund of your IMRF contributions, you give up your right to a future IMRF benefit. Consider this decision carefully.
Is a refund the choice for you?
You can leave your contributions on deposit with IMRF after you leave your employer.
If you are vested, (have enough service credit to qualify for a monthly pension), you are eligible to receive a pension that will be paid for the rest of your life.
In fact, if you of retirement age and eligible to receive a monthly pension of $30 or more, you cannot take a refund of your contributions (unless you are going to roll your contributions into another defined benefit retirement plan to purchase qualifying service credit).
If you participate in an Illinois Reciprocal System, your service credit and contributions can be combined to meet the vesting requirements for both systems. Please note you must have at least 12 months of service credit with any single system in order for the service to be combined. So, if you are leaving your employer and have less than 12 months of service credit with IMRF, you may find that a refund or rollover is the right choice for you when you leave your employer.
This brings us to the most prudent choice for most members who are not vested.
When you leave your IMRF employer, you can roll your IMRF member contributions into a traditional IRA or another eligible retirement plan. In these plans, your refunded contributions will remain sheltered from taxes until withdrawn. An IRA offers a great way to consolidate assets because you can combine your retirement savings from different jobs into one place—and you are usually able to move these IRA assets into a new workplace account later on. (Note that a Roth IRA is not tax sheltered.)
Keep in mind, if you think you might ever want to return to work for an IMRF employer or a Reciprocal system, your contributions will be available to use to repurchase your refunded contributions.
You can view and print IMRF Form 5.10, "Application for Separation Refund" which details the steps and qualifications to roll your contributions into a qualified plan. It is important to remember that regardless of whether you rollover or take a refund of your contributions, you forfeit—give up—all IMRF benefits and are no longer eligible for any retirement or disability benefit, and your beneficiaries will not be entitled to any death benefit.
If you have questions regarding IMRF, Communicate with Us.
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IMRF Online provides a brief summary of IMRF benefits and the adminstration of those benefits. IMRF members' and employers' rights and obligations are governed by Article 7 of the Illinois Pension Code. Statements in these publications are general, and the Illinois state law governing IMRF is complex and specific. If a conflict arises between information in these publications and the law, all decisions are based on the law.
Copyright © Illinois Municipal Retirement FundPage Last Updated by LH on 10-11-11