Lump Sum Death Benefit
Upon the death of a member in participating status who has at least one year of IMRF service credit or dies because of a job related injury, the death benefit is a lump sum payment consisting of an amount equal to the member’s average annual earnings (for Tier 2 subject to the wage cap) plus a refund of the balance of the member’s account (IMRF member contributions with interest less any benefit prepayment).
The average annual earnings are normally equal to the total earnings (for Tier 2 subject to the wage cap) of the member during the 12 months immediately preceding the date of death.
If death is not job related and the member has less than one year of service, only a refund of all IMRF member contributions is paid (less any benefit prepayment). Job related injuries are only those where an accident or incident at work was the cause of death.
Option to Convert a Lump Sum to Monthly Installments (Beneficiary Annuity)
A beneficiary may elect to receive the lump sum amount as a monthly benefit. The amount of the monthly benefit is actuarially determined by the amount of the lump sum benefit and the age of the beneficiary.
If the beneficiary chooses to receive monthly payments instead of a lump sum benefit, he or she will be paid for life. This election cannot be revoked.
The member’s spouse may qualify for a monthly surviving spouse pension if:
The spouse was married to or in a civil union with the member for at least one year prior to the member’s death and
The deceased member had at least eight years of Tier 1 service or 10 years of Tier 2 service and named the spouse as sole beneficiary for IMRF death benefits.
If a surviving spouse pension is payable, the spouse has the option of choosing either the lump sum death benefit or the monthly surviving spouse pension. If the spouse chooses the monthly pension, the election cannot be revoked. The option to take the surviving spouse annuity is usually advantageous for spouses of members with long service who die at or near retirement age.
Surviving
Spouse pension under Tier 1
The surviving spouse pension is equal to 50% of the pension earned by the
deceased member as of the date of death.
Surviving
Spouse pension under Tier 2
The surviving spouse pension is equal to 66-2/3% of the pension earned
by the deceased member as of the date of death.