Refunds
of Contributions—Regular Tier 2 Plan Members
The information on this page applies
to participants of IMRF’s
Regular Tier 2 Plan only.
IMRF
is required by federal law to withhold 20% of the taxable portion of
your refund unless you elect to have the taxable portion directly rolled
over to a traditional IRA (not a Roth IRA) or other qualified retirement
plan.
Depending
on your age, you may also be liable for a penalty of 10% of the taxable
amount. You may defer the 10% penalty by directly rolling your refund
into a traditional IRA or other qualified pension plan.
Under the Public
Protection Act of 2006, former public
safety employees are not subject to the 10% penalty tax on member
contribution refunds if the member was age 50 or older when the member
stopped working for his or her IMRF employer.
Regular
Tier 2 Plan refund requirements and limitations
If
you stop working for your IMRF employer and have:
Less
than 10 years of service credit:
All
of your IMRF contributions will be returned to you upon request. You
can complete IMRF
Form 5.10 to request a refund.
10
or more years of service credit
Less
than age 62 - All of your IMRF contributions will be returned
to you upon request. You can complete IMRF
Form 5.10 to request a refund. However, you will be forfeiting
a right to a future pension.
Age
62 or older - If your IMRF service qualifies you for a monthly
pension of $30 or more, you cannot withdraw your contributions, but
instead will receive them as a part of your monthly pension. Exception: you
can receive a refund only if you will roll it over into another defined
benefit retirement plan to purchase qualifying service credit.
To
apply for a refund, complete and submit IMRF
Form 5.10, “Application for Separation Refund,” to
IMRF. You are not eligible for a refund if you stop participating
in IMRF but continue working for the same employer.
IMRF
is required by federal law to withhold 20% of the taxable portion of
your separation refund unless you elect to have the taxable portion
directly rolled over to a traditional IRA (not a Roth IRA) or other
qualified retirement plan. Depending on your years of service and age,
you may also be liable for a penalty of 10% of the taxable amount. You
may defer the 10% penalty by directly rolling your refund into a traditional
IRA or other qualified pension plan.
Under the Public
Protection Act of 2006, former public
safety employees are not subject to the 10% penalty tax on member
contribution refunds if the member was age 50 or older when the member
stopped working for his or her IMRF employer.
Please
note: when you take a refund of your IMRF contributions,
you forfeit—give
up—all of your IMRF benefits. You will not be eligible for any
retirement or disability benefit, and your beneficiary(ies) will not
be entitled to any death benefit.
Return to top
If
you do not have an eligible spouse when you retire (married or in
a civil union for at least one year before you stopped participating
in IMRF), IMRF will refund your surviving spouse contributions, with
interest.
You can receive the
contributions in a lump sum or as an additional monthly annuity.
Return to top
If you participate in the SLEP plan, and retire
with less than 20 years of SLEP service credit, but you have 10
or more years of SLEP and/or Regular Tier 2 service credit, your service
will be combined for a regular
IMRF pension
at age 62.
Your SLEP contributions will be refunded with interest.
Note
that if your first IMRF participation date is on or after January 1,
2011, you will participate in the Regular Tier 2 Plan if you do not
vest for a SLEP pension.
Return to top
If
you joined the ECO on or after January 1, 2010,
you participate in the Revised ECO Tier 2 plan. Under Revised ECO TIer 2,
you need eight years of service in the same elected county position
with the same county to qualify for the ECO Tier 2 formula for those years,
and 10 years of service to qualify for a pension.
If you retire
with less than eight years of service in the same position for the same county,
but have 10 years any IMRF plan service, your service will be
combined to determine a Regular Tier 2 IMRF pension at age 62.
Your ECO contributions will be refunded
with interest.
Return
to top
You
can apply for a refund of your voluntary
additional contributions at any time, even while still participating
in IMRF. If you stop participating in IMRF and apply for a separation
refund, your voluntary additional contributions must be refunded as
well. The interest earned on the contributions will be subject to federal
tax withholding.
Return
to top
- A lump sum refund
cannot be converted unless the monthly annuity payment is at least $10
a month.
- The additional
annuity will be paid for your lifetime. However, there is no annual
increase nor is this annuity eligible for the supplemental benefit
( "13th payment").
- The original lump
sum amount is the guaranteed minimum payout. There is no maximum payout.
- If you die before
receiving annuity payments that equal your contributions, the balance
will be paid to your beneficiary(ies).
If, upon your death, all of your member contributions have not been
returned to you as a refund or pension, your beneficiary will receive
the remainder of your IMRF contributions (less any benefit payments),
with interest.
Return to top
If
you stopped participating in IMRF and took a refund of your contributions,
you may redeposit those withdrawn contributions with interest and reinstate
your months of service credit. This type of past service is known as Reinstated
Service Credit.
In order to be eligible to repay your refund, you must be currently participating
in IMRF or another Illinois reciprocal
system and
-
If you participate in the Regular or Elected County Official plans: you must have
contributed for at least two years following
the date of your last refund.
-
If you participate in the Sheriff's Law Enforcement Personnel Plan (SLEP): you would
have to return to IMRF participation as
a SLEP member. You could repay the refund after participating
for at least 1,000 hours in IMRF.
You
must submit IMRF Form
6.03, "Application for Reinstatement of Service Credit"
to receive an accurate cost to repay your refund and reestablish your
service credit.
Return to top
| 
