IMRF members can receive service credit for time spent in the military under two separate provisions of the Pension Code (Paragraphs 1(A) and 1(B) below) or under federal law (Paragraph 2 in this section).
Regardless of the statute the member is applying under, the form used is IMRF Form entitled, "Application for Military Service Credit."
To access this form, members can visit the Member Access area on IMRF's website (www.imrf.org).
Under the Pension Code, a member may earn service credit under two different provisions depending on the circumstances surrounding the military leave:
OR
Military service earned prior to IMRF participation or member did not return to IMRF participation within 90 days of discharge
Under this provision a member can purchase up to four years of military service credit if the:
Military service occurred before the member began participation in IMRF or
Member did not return to IMRF participation within 90 days of discharge.
If a member purchases military service under this part of the Pension Code, he or she may still use the service in the computation of a pension or retirement pay from the U.S. government.
The member’s employer must adopt a resolution allowing its member to purchase up to four years of military service. Refer to paragraph 6.60 C. To Allow Service Credit for Military Service prior to IMRF Participation.
Eligible members
A member must be participating in IMRF to purchase military service under this provision of the Pension Code. A member would be eligible to purchase military service under this provision if the member was participating in IMRF on or after the date his or her employer adopts the authorizing resolution and the member was participating in IMRF on the date IMRF receives the member’s application
Adopting the resolution
This type of military service credit is available only if the employer agrees to it. Employer adoption of the resolution allowing military service credit under this statute is optional. Refer to 6.60 C. To Allow Service Credit for Military Service prior to IMRF Participation.
If the employer requests to use IMRF's suggested form of resolution, please send a secure message to request. If unable to send a secure message, please contact IMRF via the employer-only phone number at 1-800-728-7971.
Ineligible members
A member would not be eligible to purchase military service under this statute if the:
Member’s previous IMRF employer adopts the resolution. The member’s current employer must adopt the resolution allowing him or her to purchase the service. A member cannot purchase military service based on a previous employer adopting the resolution.
Employer rescinds the resolution before the member is hired.
Member received a discharge that does not qualify for veteran’s benefits, such as a dishonorable discharge.
Eligible military service
Eligible members are able to purchase the following military service and convert it IMRF service:
Regular service in the United States Armed Forces
Reserve duty (active or inactive)
National Guard duty (active or inactive)
Public Health Service commissioned duty
Ineligible military service
The following service cannot be converted to IMRF service:
Peace Corps work
ROTC
Member application process
A member must apply in writing by completing IMRF Form entitled, "Application for Military Service Credit,” and attaching a copy of his or her DD Form 214 (Armed Forces of the United States Report of Transfer or Discharge).
Online spreadsheets to estimate member and employer costs
The cost to the member of converting military service to IMRF service varies widely depending on when the military service occurred, when the member began IMRF participation, and the member’s salary upon participation.
IMRF has developed spreadsheets that allow you to estimate the total cost for this program, the member cost, and the resulting difference which is the employer cost. The incremental employer costs are paid through future employer contribution rates.
To download these Excel spreadsheets, visit Employees with Past Service You will need Microsoft Excel installed on your computer to use these spreadsheets.
Member costs
The cost of military leave to the member varies widely depending on when the military service occurred, when the member began IMRF participation, and the member’s salary upon participation.
The member’s first IMRF salary is to be used in the calculation of member costs, assuming the member did not take a refund. If the member took a refund, IMRF uses the first salary as of the member’s most recent uninterrupted IMRF participation date.
The member pays:
Member contributions in effect at the time of the military service. Contributions are based on the member’s salary when he or she first began participating in IMRF (see paragraph above),
Plus: Employer ”normal cost” contributions (”normal cost” is the rate which would have been required to fund pension benefits if the member had remained in IMRF until an assumed retirement age.)
Plus: Interest from the beginning of the member’s first IMRF participation date to December 31st of the year prior to the date of payment. (IMRF charges interest based on the current assumed rate of return.)
The member may purchase the service credit in a lump sum or on a payment plan. Refer to 6.40 C. Member Application and Payments for details.
Employer costs
The cost of military leave to the employer equals the difference between the value of the increased benefit to the member and the contributions paid by the member. Therefore, the eventual employer cost is dependent upon the member’s benefit and the member’s payment. This can be expressed as follows:
Estimated cost for the increase in member’s benefit
Less: Member total cost for military leave
Equals: Estimated employer cost (b)
Estimated cost for the increase in member’s benefit
The exact increase in the member’s benefit cannot be determined until the member retires. To calculate the exact amount IMRF must know:
The age of the member at retirement
The amount of service the member has upon retirement
The amount of the member’s final salary
Whether the member has an eligible spouse
IMRF developed guidelines for estimating the costs for the increase in member’s benefit if the member purchased two years of military service. Multiply the member’s current salary times the cost factor to estimate the total cost for the increase:
Member Age
When |
Increase
in Member's Benefit |
Less than 35 |
22% |
35 to 40 |
29% |
41 to 45 |
37% |
46 to 50 |
47% |
51 to 55 |
60% |
56 to 62 |
55% |
63 to 67 |
50% |
68 to 73 |
45% |
Estimated employer cost
The difference between the increase in the member’s benefit and the member’s cost is the employer cost. The employer cost is paid through future employer rates.
Examples of member and employer costs
Assume an employer has three eligible members with an annual increase in payroll of 4%. The chart below shows their current and starting salaries, years of service credit and their member costs for purchasing two years of military service:
|
Member A |
Member |
Member |
Total |
Age |
28 |
55 |
40 |
|
Current Salary |
$15,000 |
$35,000 |
$45,000 |
|
Starting Salary |
$12,000 |
$17,500 |
$22,500 |
|
Years With Employer |
5 years |
15 years |
10 years |
|
|
|
|
|
|
Member Costs: |
$2,739 |
$8,357 |
$7,383 |
|
|
|
|
|
|
Age-Based Factor |
22% |
60% |
29% |
|
Increased Cost |
|
|
|
|
(Factor x Current Salary) |
$3,300 + |
$21,000 + |
$13,050 = |
$37,350 |
|
|
|
|
|
Employer Cost: |
$561 + |
$12,643 + |
$5,667 = |
$18,871 |
If members’ salaries increases are greater than the 4% assumption, there is a greater cost to the employer than illustrated in the example above. Because the member cost is fixed, the cost burden of an increased salary is passed on to the employer. The employer cost is paid through the employer’s future contribution rate.
Military leave interrupted the member's IMRF participation and the member returned to IMRF participation within 90 days of discharge
Members may also be granted
military service under a different section of the Pension Code. If a member
receives military service under this provision, he or she may not use
the service in the computation of a pension or retirement pay from the
U.S. government.
A member who leaves participating employment to serve in the Armed Forces
of the United States may receive service credit for the time served by
submitting IMRF Form, "Application for Military Service Credit" if:
Within 90 days of discharge he or she returns to IMRF participating employment. The member can return to an IMRF-covered position for any IMRF employer within 90 days of discharge. The member is not required to return to the same IMRF employer he or she participated with prior to the military service.
The governmental unit he or she is employed with has on filea resolution authorizing service credits for military leave. IMRF Form Resolution entitled, “Resolution to Allow Service Credit form Military Leave – Participation Interrupted” may be requested by the employer via secure message or by phone via the employer-only phone number at 1-800-728-7971.
The member certifies that the military service will not be used in the computation of a pension or retirement pay from the U.S. government.
The member encloses a copy of his or her discharge papers.
The member’s military period is for active duty service.
No immediate payment is required of the employer, but the cost will be reflected in the employer’s future contribution rate. There is no cost to the member.