When a member retires, his or her initial pension payments are always based on IMRF's standard (straight life) plan. However, the member may be eligible for other payment options.
Standard (straight life) payout
Under the standard payout, a member receives the same pension amount every month after he or she retires for the rest of his or her life, regardless of how long he or she lives. (A 3%, non-compounded increase. Retired members also receive an annual non-compounded increase. See Pension Increases After Retirement.)
Optional payout
If a member is less than 62 years of age on the effective date of his or her pension, the member can elect to receive the pension under an optional payout. (The optional payout is not available to members retiring under the Regular Plan Tier 2. The earliest retirement age under Regular Plan Tier 2 is 62.)
Under the optional payout, the member would receive a larger pension until age 62 and a reduced pension thereafter.
With the addition of a Social Security pension at age 62, or later, this enables the member to achieve a more level retirement income.
Note: To determine the amount of a member's optional pension, IMRF uses a table of estimated Social Security benefits. This table includes general assumptions about the average person's work record.
IMRF will advise members under age 62 at retirement of the amounts payable under the Standard payout and under the optional payout. The calculations of the optional plan vary and can be computed on an individual basis only.
Alternate pension formulas, that is, money purchase and reversionary annuities, are discussed in paragraph 13 in this section.