Retiring IMRF members may qualify for a maximum of one year of additional pension service credit for unpaid, unused sick leave accumulated with their last employer. The effective date of the member’s pension must be within 60 days of the member’s termination date. In cases where an employee is in service with more than one IMRF employer or regional office of education and then terminates with those employers within 60 days of the member's retirement date, then only the sick leave days with the employer with which the employee has the greatest number of unpaid sick leave days will be used.
One month of service is credited for every 20 days, or fraction thereof, of unpaid, unused sick leave not to exceed 240 days (one year).
The sick leave must have been accumulated under an established sick leave plan available to all employees or a class of employees, and the effective date of the pension must be within 60 days of termination. This additional pension service credit provision applies solely to employees terminating for retirement purposes.
The sick leave plan must provide for the periodic accumulation of sick leave. Sick leave allotted in contemplation of retirement is not acceptable.
There is no immediate cost to the member or the employer for converted sick leave. The cost of this additional service credit ( up to one year ) is funded through the employer reserve and may be reflected in future employer contribution rates.
Members retiring from a school district may convert unused, unpaid sick leave accumulated with any prior school district employers. The effective date of the member’s pension must be within 60 days of the member’s termination from a school district. As of August 23, 2019, members who retire from other educational entities, such as special education cooperatives, as defined in 40 ILCS 5/7-132(B)(c), are also eligible to convert unused, unpaid sick leave from prior school districts. Members retiring from either a school district or other educational employer as described above may also convert unused, unpaid sick leave from any prior educational employers. The exception to this is that in order to convert unused, unpaid sick leave from a prior non-school district educational employer, a member must have terminated from that entity on or after August 23, 2019.
Example: Mary Member works for Special Education Cooperative A and participates in IMRF from 2010 to 2017. Mary then works for Special Education Cooperative B and participates in IMRF from 2017 to 2025. Mary then works for a school district from 2025 to 2030. Mary has unused, unpaid sick leave from all three employers. Upon retirement, Mary can only use her sick leave from Special Education Cooperative B and the school district for service credit. She cannot use her sick leave from Special Education Cooperative A because she terminated employment with that entity prior to August 23, 2019.
To report unused, unpaid sick leave, the previous school district employer or other educational employer as described above may submit a corrected Notice of Termination of Participation via Employer Access.
If the school district does not submit a corrected termination notice, the member may provide IMRF with evidence of the unused sick leave. Acceptable evidence must have originated on or before the date the previous employment ended, e.g., copies of original payroll information or original paycheck stubs showing earned sick leave. IMRF cannot accept recreated documents or letters of certification.
Examples of sick leave plans under which unused, unpaid sick leave may be converted to service credit:
An employer maintains two separate sick leave plans, one for employees of a bargaining unit and one for non-unionized employees.
An employer maintains a plan which allows accumulation of sick leave days up to a maximum of 100 days, and any days over that number may be accumulated only for conversion to service credit.
An employer cashes out accumulated sick leave at the rate of $25 per day for all days in excess of 100 (under this plan, the first 100 days may be converted to service credit).
An employer cashes out 10% of accumulated sick leave days at the member’s own salary rate if the member accumulates 50 days or more, 25% of accumulated days if the member has 100 days or more, 50% of accumulated days if the member has 200 days or more (the remaining uncompensated days may be converted to service credit).
An employer allows terminating employees to convert accrued vacation and/or personal leave to sick leave days.
Employer ”gifts” of sick leave not eligible
Under the Illinois Pension Code, an employer may not simply grant sick leave solely to allow a retiring member to convert the sick leave to service credit. Therefore, an employer may not ”gift” sick leave to a member if the sick leave was not accumulated in the usual manner, i.e., under a written plan established by the employer and available to all employees or to a class of employees.
For example, an employer has an agreement with a union that it will provide to retiring members an additional 100 days of sick leave to be used solely to enhance their retirement benefit. That sick leave was not accumulated in the usual manner and the member may not convert those days to service credit.
Converted sick leave service cannot be used to meet vesting requirements
Please note that converted sick leave service cannot be used to meet the requirements of a minimum of eight years for an IMRF Regular Tier 1 pension, minimum of 10 years for an IMRF Regular Tier 2 pension, the 35 years for a non-discounted Regular Tier 1 pension under age 60, the 35 years for a non-discounted Regular Tier 2 pension under age 67, the 20 years for a SLEP Tier 1 pension, the 10 years for a SLEP Tier 2 pension, or the 20 years for an ERI.