Refunds of Contributions

Federal withholding on all refunds

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.

Refunds of voluntary additional contributions

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.

Topics on this page:

• Refund of member contributions
  • Regular Plan
  • SLEP Plan
• Refund of surviving spouse contributions
• SLEP contributions if you do not qualify for a SLEP pension
• ECO contribution if you do not qualify for an ECO pension
• Refunds of voluntary additional contributions
• Converting a lump sum refund into a monthly annuity:
• Contributions not received as a benefit
• Repaying a refund

Refund of member contributions

Regular IMRF Plan refund requirements and limitations

If you stop working for your IMRF employer and have:

Less than eight 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.

Eight or more years of service credit

Less than age 55 - 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 55 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.

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SLEP Plan refund requirements and limitations

If you stop working for your IMRF employer and have:

Less than eight years of SLEP and/or Regular service

Your 7.50% IMRF SLEP contributions (6.50% before June 1, 2006) will be returned to you upon request.

Eight or more years of SLEP and/or Regular service

Less than age 55 — Your 7.50% IMRF SLEP contributions (6.50% before June 1, 2006) will be returned to you upon request. However, you will be giving up the right to a future pension. (You can convert up to 10 years of Regular Plan service to SLEP. If you have at least 10 years of SLEP service, converting your Regular Plan service may allow you to become eligible for a SLEP pension.

Age 55 or older — If your service qualifies you for a Regular plan pension of $30 a month or more, you cannot withdraw your contributions. You will receive them as part of your Regular plan pension, and your SLEP contributions will be refunded with interest. Exception: you can receive a refund only if you will roll it over into another defined benefit retirement plan to purchase qualifying service credit.

20 or more years of SLEP service

Less than age 50 — All of your contributions will be returned to you upon request. However, you will be forfeiting a right to a future SLEP pension.

Age 50 or older — If you have 20 or more years of SLEP service that qualifies you for a monthly SLEP pension, you cannot withdraw your contributions. You will receive them as 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.

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Refund of Surviving spouse contributions

If you do not have an eligible spouse when you retire (married to you 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.

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SLEP contributions if you do not qualify for a SLEP pension

If you retire with less than 20 years' SLEP service credit, but eight or more years of SLEP and regular IMRF service credit, your service will be combined to determine a regular IMRF pension at age 55. Your SLEP contributions will be refunded with interest.

If you apply for a separation refund of your IMRF contributions, like any other refund of member contributions that is paid when a member terminates employment with an IMRF employer, separation refunds under the SLEP plan are payable without interest

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ECO contributions if you do not qualify for an ECO pension

If you joined the ECO plan on or after January 26, 2000, you participate in the Revised ECO plan. Under Revised ECO, you need eight years of service in the same elected county position with the same county to qualify for an ECO pension. If you retire with less than eight years of service in the same position for the same county, but eight or more years of ECO, SLEP and/or Regular IMRF service credit, your service will be combined to determine a Regular IMRF pension at age 55. Your ECO contributions will be refunded with interest.

If you apply for a separation refund of all of your IMRF contributions, like any other refund of member contributions that is paid when a member terminates employment with an IMRF employer, separation refunds under the ECO plan are payable without interest.

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Refunds of voluntary additional contributions

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.

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Converting a lump sum refund into a monthly annuity:

• A lump sum refund cannot be converted unless the monthly annuity payment is at least $10 a month.
• If you have both a surviving spouse and SLEP contribution refund, both must be converted to an annuity. You cannot annuitize one refund but not the other. You must also convert the entire amount.
• The additional annuity will be paid for your lifetime. However, there is no annual 3% 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).

Contributions not received as a benefit

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.

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Repaying a refund

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.

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