If a Tier 2 member retires between the ages of 62 and 67 with less than 30 years of service credit, the pension will be reduced by 1/2% for each month the member is under age 67.
If a member retires between the ages of 62 and 67 with at least 30 but less than 35 years of pension service credit, the pension will be reduced by the lesser of
1/2% for each month the member is under age 67 or
1/2% for each month of service less than 35 years.
If the member has 35 or more years of pension service credit, the full amount of the pension will be paid, even if the member is between the ages of 62 and 67.
If the member retires under ERI, the IMRF ERI does not alter the existing pension reduction if a member retires before age 67. This reduction will apply if the member’s ERI enhanced age is less than 67. If when the member retires:
a. His or her ERI enhanced age is between 62 and 67 and his or her ERI enhanced service is
Less than 30 years, the pension will be reduced by 1/2% for each month the members’ ERI enhanced age is under 67.
At least 30 but less than 35 years, the pension will be reduced by the lesser of
- 1/2% for each month the ERI enhanced age is less 67 or
- 1/2% for each month the ERI enhanced service is less than 35 years.
b. His or her ERI enhanced age is 67 or his or her ERI enhanced service is 35 years, the full amount of the pension is paid. NOTE: An ERI enhanced age of 67 does NOT make a Tier 2 member eligible for an annual pension increase. The member must reach the later of age 67 or 12 months of pension payments to be eligible for annual increases. See Paragraph 5.20 B 11. Pension Increases After Retirement
If the member’s actual age is 62 or greater, he or she can avoid the reduction by purchasing sufficient service to reach an enhanced age of 67 or 35 years of service credit.
If the member’s actual age is less than 62, the pension reduction will be calculated using the enhanced age and service credit.
Example:
|
Actual Age |
58 yrs. 4 mo. |
Actual Service |
22 yrs. 3 mo. |
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Member purchases |
5 yrs. 0 mo. |
|
5 yrs. 0 mo. |
|
ERI age |
63 yrs. 4 mo. |
ERI service |
27 yrs. 3 mo. |
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Number of Months ERI enhanced age less than 67: |
44 months |
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Pension would be reduced 1/2% for each month under age 67: |
44 months |
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x .5% |
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22% |
The amount of the ERI enhanced pension would be permanently reduced by 22%.
For details on IMRF's ERI, see 5.20 C. IMRF Early Retirement Incentive (ERI).