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Early Retirement Incentive (ERI) for Tier 1 members

The information on this page applies only to participants of the IMRF Regular Tier 1 plan, Original ECO, Revised ECO Tier 1, and SLEP plans. If you participate in Tier 2, ERI may be available to you, but the age requirements will differ.

You can download a printable PDF version of this information here. This information is in a single printable document instead of spread across many pages. You will need the free Adobe Acrobat Reader to view this file.

Table of contents:

Eligible members

To be eligible to retire under the IMRF ERI:

  • Your employer must adopt the program.
  • You must be participating in IMRF on the effective date of your employer's ERI program. You would still be considered participating in IMRF if you are
    • on layoff status with right of re-employment,
    • on IMRF Benefit Protection Leave of Absence, or
    • receiving IMRF disability benefits for less than two years.
  • Under IMRF Tier 1 rules, you must be at least age 50 and have at least 20 years of service credit by your date of retirement.
    • The 20 years of service credit can include reciprocal service
    • The 20 years of service credit can include service with another IMRF employer
    • Unused, unpaid sick leave cannot be used to meet the 20-year service requirement
  • Your date of retirement must be no later than 12 months from your employer's ERI program effective date.
  • You cannot have previously received a pension using IMRF service credit.

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Member benefits under the IMRF ERI

  • Eligible members may purchase from one month up to five years of additional service credit. For each period of service established, your age at retirement will be increased accordingly.


Your actual age 56 yrs 5 months Your actual service 22 yrs 3 months
You purchase 3 yrs 7 months Adds to your actual service 3 yrs 7 months
Your ERI age 60 yrs 0 months Your ERI service 25 yrs 10 months
  • Tier 1 members age 60 or older may also purchase up to five years of additional service credit. Although age enhancement is no longer necessary, the additional service credit will result in a larger pension.
  • Please note: Although you can use reciprocal service credit to meet the service requirement for the IMRF ERI, you will not be eligible to receive a pension from the reciprocal system unless you meet its age requirement without the IMRF ERI age/service enhancements.

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Members participating in the Elected County Official (ECO) plan

  • The maximum Revised ECO Tier 1 pension (80% of final rate of earnings) is earned after 20 years of ECO service credit.
  • Age 55 is the minimum age to retire under Revised ECO Tier 1.
  • An ECO member who retires under ERI with 20 years of ECO Tier 1service will have his or her age enhanced for benefit calculation purposes, but the pension amount will not be increased (because it is already at the maximum amount).

    A Revised ECO Tier 1 or Original ECO member at age 50 with 20 years of ECO service can purchase five years of ECO service allowing him or her to retire at age 50 (instead of the minimum age of 55). However, the amount of the pension will not increase.

Notice of Intent to Retire Under Employer's IMRF ERI
  • If your employer adopts the ERI and you intend to retire under it, you would notify IMRF of your intention to do by submitting IMRF Form 5.21.
  • You can use Acrobat Reader to open IMRF Form 5.21, "Notice of Intent to Retire Under Employer's IMRF Early Retirement Incentive". You can then print, complete and mail this form to IMRF. Or you can call an IMRF Service Representative at 1-800-ASK-IMRF (1-800-275-4673) and have the form mailed to you.
  • You can also FAX the Notice of Intent to IMRF at 630-368-5397.
  • The Notice of Intent (form or phone call) must be received in the IMRF office before your date of retirement, preferably with your application for retirement (IMRF Form 5.20). But we recommend you file Form 5.21 as soon as your employer adopts the ERI and the member decides to retire under it.
  • Receipt of your notice does not guarantee your eligibility for the ERI nor for an IMRF pension.
  • As a general rule, your Notice of Intent is not a letter of resignation. Although you may file a Notice, you are not required to apply for an IMRF pension. However, some employers may treat a Notice of Intent as a letter of resignation. If you have any questions regarding this, talk with your employer.
  • IMRF will acknowledge receipt of your intent with a letter and the publication, "Can I Afford to Retire?" Your employer will receive a courtesy copy of the acknowledgment letter.

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How your ERI cost is calculated
  • For each year of service credit you purchase, you will pay 4.5% (7.5% for SLEP and ECO) of your highest 12 consecutive months of salary within the final rate of earnings period.


    The highest 12 months of salary
    x (times) member contribution
    x (times) 4.5%
    $ 1,215
    x (times) 3 years 7 months* =

    x (times) 3.583
    Member ERI cost
    $ 4,353
    *Service conversion chart
    .083 = 1 month .417 = 5 months .750 = 9 months 2.00 = 2 years
    .167 = 2 months .500 = 6 months .833 = 10 months 3.00 = 3 years
    .250 = 3 months .583 = 7 months .917 = 11 months 4.00 = 4 years
    .333 = 4 months .667 = 8 months 1.00 = 1 year 5.00 = 5 years

    Example of months of service conversion

    1 year 6 months=
    3 year 4 months=
    4 years 9 months=
    3 year 4 months=
  • If you do not have an eligible surviving spouse when you retire, your contribution is reduced to 3.75% and 5.75% respectively.
  • A maximum payment of 22.5% (32.5% for SLEP) will be made to IMRF for five years of service credit and age enhancement.
  • You can also request an ERI pension estimate (IMRF Form BF-20 "Pension Estimate Request,") which will include your ERI costs.

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Paying member costs for the ERI

Lump sum payments from employer

  • If you receive any lump sum payments for vacation, sick leave and/or personal leave, your employer must forward the net payment (gross amount less federal and state taxes, IMRF member contributions, etc.) to IMRF. The net payment will be applied toward your ERI cost.
  • If the net payment for sick, vacation, and/or personal time is greater than your ERI cost, your employer would forward to IMRF an amount required to pay your cost. Your employer would forward to you any remaining balance of the net payment. If the net payment is less than your ERI cost, you will be billed separately by IMRF. Please do not send any payment to IMRF until you receive an invoice from IMRF.
  • This payment must be remitted to IMRF. As long as the payment for vacation, sick leave and/or personal leave is due to your retirement, it is payable to IMRF.

Refunds from IMRF

  • If you are entitled to a refund from IMRF for surviving spouse, SLEP, or voluntary additional contributions, you may request that the refund be applied toward your ERI cost. If the refund is greater than your ERI cost, IMRF will refund the balance to you.

Rollover from conduit IRA

  • You may roll over funds from a conduit IRA to pay your ERI cost. Funds from a regular IRA cannot be used to pay for the ERI. A conduit IRA is one which holds a rollover from a qualified pension plan (like IMRF) and to which other money has not been added.

24 equal installments

  • Your contributions for the ERI can be paid in a single sum or deducted from your pension in 24 equal monthly installments. Interest is not charged during the 24 months. The 24-month payment period is fixed by law and cannot be extended.

Additional member payments

  • Once deductions for the 24 equal monthly installments begin, you can forward additional payments or pay off the balance of your ERI cost at any time.

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If you return to work

  • If you retire under the ERI and you return to work for any IMRF employer in any position, even as an independent contractor, you will
    • lose the ERI enhancements and
    • pay IMRF the difference between the ERI enhanced pension and the pension you would have received without the ERI-less the amount you paid for the ERI

    Exception: you can hold an elected position and continue to receive your ERI pension if you choose to not participate in IMRF and your pension is not based on any service earned in that position during any term of office.

  • If you would not have been entitled to a pension without an ERI, i.e., you were less than age 55 at retirement:
    • you would be required to repay IMRF for all pension payments received less the amount you paid
    • when you again retire, your pension will be recalculated without the enhancements.
  • You may retire under ERI only once. For example, you retire under ERI and return to work for an IMRF employer. If that employer adopted ERI, you would not be eligible to retire under it.

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If death occurs

  • If a surviving spouse pension is payable, your spouse would receive approximately one-half of your enhanced ERI pension.
  • If you die and a balance for your ERI cost remains, the remainder will be deducted from the IMRF death benefit:
    • If a surviving spouse pension is payable, the remainder of the 24 equal installments will be deducted from the surviving spouse pension
    • If a surviving spouse pension is not payable, the balance will be deducted from the lump sum death benefit payment.
  • If you paid more for the ERI than you received in an enhanced pension, the amount not paid out as a benefit will be refunded to your beneficiary or to your estate.

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If you participate in more than one plan or in the ECO plan

If you have both regular IMRF and SLEP service credit

The type of service credit you can purchase under the ERI will be determined by your current employer:

  • If your current employer is SLEP and it adopts the ERI, you would purchase SLEP service credit.
  • If your current employer is regular IMRF, you would purchase regular IMRF service credit
  • If you are participating under two IMRF employers, one SLEP and one regular IMRF:
    • the type of service credit purchased under the ERI will be determined by which employer adopts the ERI.
    • if both employers adopt the program and of your 20 years of total service credit you have:
      • Less than 15 years of SLEP service credit.:
        • you would purchase regular service credit
      • 15 or more years of SLEP service credit:
        • you would purchase the number of years desired; your cost would be calculated as follows:
          7.5% per year purchased x SLEP ERI final rate of earnings
          4.5% per year purchased x Regular ERI final rate of earnings

If you participate in the Elected County Official plan

  • If a member participating in the Original ECO plan participates under two employers, the member will purchase ECO service credit, regardless which employer adopts ERI.
  • If a member participating in the Revised ECO plan participates under two employers, the type of service credit purchased under ERI will be determined by which eemployer adopts the ERI.

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Pension reduction for under age 60 with less than 35 years of service

The IMRF ERI does not alter the existing IMRF benefit formula. Under Tier 1, the current benefit formula calls for a pension reduction if you retire before age 60. (This reduction does not apply to SLEP pensions.) This reduction will apply if your ERI enhanced age is less than 60.

If when you retire under Tier 1 ERI:

  • Your ERI enhanced age is between 55 and 60 and your ERI enhanced service is less than 30 years, your pension will be reduced by 1/4% for each month your ERI enhanced age is under age 60.
  • Your ERI enhanced age is between 55 and 60 and your ERI enhanced service is at least 30 but less than 35 years, your pension will be reduced by the lesser of
    • 1/4% for each month your ERI enhanced age is less 60 or
    • 1/4% for each month your ERI enhanced service is less than 35 years.
    • Your ERI enhanced age is 60 or your ERI enhanced service is 35 years, the full amount of the pension is paid.
  • If your actual age is 55 or greater, you can avoid the reduction by purchasing sufficient service to reach an enhanced age of 60 or 35 years of service credit.
  • If your actual age is less than 55, the pension reduction will be calculated using your enhanced age and service credit.


    Actual Age 51 yrs. 4 months Actual Service 22 yrs. 3 months
    You purchase 5 yrs. 0 months Add to actual service 5 yrs. 0 months
    ERI age 56 yrs. 4 mo ERI service 27 yrs. 3 mo.
    ERI age 56 yrs. 4 MO ERI service 27 yrs. 3 mo.
    Months ERI enhanced age less than 60: 44
    Pension would be reduced 1/4% for each month under age 60: 44 months x .25% = 11

In this example, the amount of your ERI enhanced pension would be permanently reduced by 11%.

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Steps to Retire Under IMRF ERI for Members

  • Step 1 Employer passes the resolution adopting the IMRF ERI.
  • Step 2 Employer informs its IMRF members of the adoption of the ERI and of the program's effective date.
  • Step 3 Members intending to retire under the ERI notify IMRF of their intent by completing Form 5.21, "Member's Notice of Intent to Retire Under the IMRF ERI," or by calling an IMRF Service Representative at 1-800-ASK-IMRF (1-800-275-4673). The Notice of Intent does not guarantee a member's eligibility for the ERI nor for an IMRF pension.
  • Step 4 IMRF acknowledges receipt of the member's intent to the member and the employer.
  • Step 5 Employer determines retiring members' termination dates. Employer is to give members 30 days notice of the date. Members may waive the 30-day notice. However, if a member requests to retire before July 1st so he or she will be eligible for the 13th payment the following year, the employer must allow the member to do so.
  • Step 6 Member submits IMRF Form 5.20, "Application for Retirement Annuity," to IMRF 30 days before termination date.
  • Step 7 Employer submits IMRF Form 6.41, "Notice of Termination of IMRF Participation" for member.
  • Step 8 IMRF begins paying an estimated ERI enhanced pension. If member is eligible for a refund of contributions (surviving spouse, SLEP, voluntary additional), IMRF notifies member of refund. Member can use refund to pay member ERI costs, if desired.
  • Step 9 Employer sends in member's final payroll report.
  • Step 10 After final payroll received, IMRF recalculates member's pension to determine final pension amount.
  • Step 11 If a member is eligible for level option pension (actual age less than 62), IMRF notifies member of the option.
  • Step 12 IMRF calculates the member's cost for the ERI and sends an invoice to employer.
  • Step 13 Employer returns invoice with the net payment for the member's sick, vacation, and/or personal time. If net payment greater than member's ERI cost, employer forwards balance of net payment to member.
  • Step 14 After 30 days, IMRF sends an invoice to the member indicating ERI service purchased, payments received, and balance remaining. Member can return invoice with any payments toward his or her cost of the ERI.
  • Step 15 After 30 days have passed or payment received from the member, if any balance remains for member's ERI cost, IMRF begins deducting 24 equal installments (without interest) from the member's pension.

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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.

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Page Last Updated by JC on 12.01.2010