6.40 Past Service Credits/Member Account Corrections

6. Prior Service (IMRF Form "Application For Prior Service Credit”)

The Pension Code provides for service credit Service credit is a member's total time under IMRF, stated in years and fractions. Service is credited monthly while a member is working, receiving IMRF disability benefits or while he or she is on IMRF's Benefit Protection Leave. A member earns one month of service credit for each month he or she: (1) works in a qualified position and makes a member contribution. (2) worked in a qualified position prior to his or her employer joining IMRF. (3) receives an IMRF disability benefit. (4) is on an IMRF Benefit Protection Leave (limited to 12 months). (5) purchases a month of past service credit. A member cannot earn more than one month of service credit for any given calendar month. for qualifying employment before the employer (unit of government) joined IMRF. This type of service credit is called prior service credit.

1. Unit of government joined IMRF on or before January, 1, 1998

Members who rendered service in an IMRF covered position Also known as a qualified position. An IMRF qualified position is one which will equal or exceed an employer's annual hourly standard. An employee is required to participate in IMRF if he or she works in an IMRF qualified position. prior to the date their governmental unit entered IMRF may receive all of their prior service credit at no cost to the member An employee who works in a position not excluded from IMRF coverage and whose position meets the annual hourly standard for IMRF coverage. For the purposes of an Authorized Agent submitting a petition or casting a ballot in an executive trustee election, an active member also includes an employee receiving an IMRF pension and working in position that does not qualify for IMRF participation or one that provides the employee the option of participating in IMRF, e.g., elected office..

2. Unit of government joined IMRF after January, 1, 1998

Members who rendered service in an IMRF covered position prior to the date their governmental unit entered IMRF may receive five years of their prior service credit or 20 percent of their total prior service, whichever is less, at no cost to the member.

The member can purchase any remaining prior service by paying the member contributions Members who participate in the Regular Plan contribute 4.50% of salary toward a future IMRF pension: 3.75% for the member and 0.75% for a surviving spouse pension. Members who participate in the SLEP plan contribute 7.50% of salary (on and after June 1, 2006) toward a future SLEP pension: 6.75% for the member and 0.75% for a surviving spouse pension. Before June 1, 2006, SLEP members contributed 6.50 percent of salary; 5.75 percent for the member and 0.75 percent for a surviving spouse pension. Members in the ECO plan contribute 7.50 of salary toward a future ECO pension: 6.75% for the member and 0.75% for a surviving spouse pension., plus interest. A member’s eligibility to purchase the remaining years of service is not discretionary with the unit of government. The salary used to calculate the cost to purchase the prior service is the salary as of the date the unit of government joined IMRF.

The member may be eligible to use funds from a traditional Individual Retirement Account (IRA Individual Retirement Account. A tax-deferred retirement account for an individual that permits individuals to set aside up to $2,000 per year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty).) or from another qualified plan or 457 or 403(b) plan A retirement plan that functions like a defined contribution plan and is similar to a 401(k) plan, but is offered by non-profit organizations, such as universities and some charitable organizations, rather than corporations. If you work for a school district or a public hospital, you may be familiar with an Internal Revenue Code Section 403(b) tax-deferred annuity. to purchase the prior service credit. (See 6.40 C. Member Application and Payments.)

Regardless of when the unit of government joined IMRF, a member would apply for prior service by submitting IMRF Form entitled, "Application for Prior Service Credit" under the following conditions:

• 1. The member must be employed in a covered position on the date the governmental unit enters IMRF, or

  2. The governmental unit entered IMRF but has now returned to work for that governmental unit and has completed two years of contributing service after re-entry.

There is no immediate payment required of the employer. The cost to the governmental unit is reflected in its future employer contribution rates.

Members can access this form by visiting the Member Access area on IMRF's website (www.imrf.org).

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