3.96 Introduction to Earnings for IMRF Purposes

The Illinois Pension Code provides that the IMRF Board of Trustees defines what constitutes IMRF earnings and subsequently, what earnings are to be used in the calculation of IMRF benefits.

IMRF earnings are equal to the total paid to an employee for personal services or official duties as an employee up to the limit set by the Internal Revenue Code for qualified pension plans. In 2023, this limit is $3300,000.  Note: This limit does not apply to members who began participation before 1996.

This amount includes compensation, fees, allowances and other emoluments paid, for official duties. Also included is the money value of any board, lodging and other allowances provided to the member in lieu of cash.

Learn more about earnings for IMRF purposes from the topics listed below:

• A. Earnings Definition

• B. Source of Earnings

• C. Taxable income and Social Security Wages

• D. Constructive Payment And Receipt

• E. Payment By Another Entity

• F. Non-Cash Earnings (Wages-In-Kind)

• G. Payments After Death

• H. Social Security Pensioners

• I. Severance Pay, Retirement Pay, And Retirement Incentives

• J. Sick Pay

• K. Disability Retirement Pay

• L. Tax-Sheltered Annuities (IRC Sec. 403(b))

• M. Qualified Deferred Compensation Plans (IRC Sec. 457)

• N. 401(a) Pension Plans

• O. 401(k) Salary Reduction Plans

• P. Expense Reimbursement And Allowances

• Q. Allowance For Moving Expenses

• R. Workers’ Compensation

• S. Advance Earned Income Credit (EIC) Payments

• T. Educational And Public Labor Relations Act Retroactive Payments

• U. Back Pay Other Than Illinois Labor Relations Acts

• V. Employer Payment Of Employee Social Security Tax

• W. Cafeteria And Flexible Pay Plans

• X. Elected Official Compensation

• Y. Law Enforcement And Firefighters Disability Compensation

• Z. Loans To Employees – Interest Free Or Below Market Interest

• AA. Tip Income

• BB. Bonus Payments to Clerks, Treasurers, Coroners and Assessors

• CC. Independent Contractors

• DD. Stipends for Jurors and Election Judges

• EE. Employer Pays Member Contributions

• FF. To Include Taxable Expense Allowances as IMRF Earnings