6.40 C. Member Application and Payments

4. Payment Plans

Member payments apply to specific types of past service that require payments from the member to IMRF. Those types of past service are:

• Omitted service

• Prior service

• Retroactive service

• Reinstatement of forfeited service (repayment of a refund)

• Benefit Protection Leaves for unpaid absences

• Military service under the Uniformed Services Employment and Re-employment Rights Act

• Certain military service under Illinois law

• Elected County Official Plan service

• Out-of-state service rendered with a local governmental employer in another state covered by a public employee retirement program.

• Conversion of Regular Plan service to SLEP Plan service

Member payments for past service may be remitted in a lump sum payment or in monthly unit payments remitted by the member:

1. The Lump Sum Plan allows the member to purchase all past service credits with a one-time single lump sum payment. The lump sum payment may be made with after-tax funds or with a rollover using tax-deferred funds.

2. The Unit Payment Plan allows a member to pay past 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. and interest in installments (i.e., ”unit payments”). Members may purchase one or more months (one or more ”units”) of past service at a time. However, members may not purchase fractions of a month, nor can they purchase more than the number of months indicated on the payment schedule. The frequency and number of months purchased can be determined and paid for at the member’s convenience.

IMRF members are advised of payment options when they apply for past service. The payment plans are offered and explained in a Payment Schedule which is issued to the member after a properly executed past service application has been filed and accepted by IMRF.

If the member is using the Lump Sum or Unit Payment Plan, the member may be able to use tax-deferred 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 part or all of the past service credit. The member would request from IMRF Form entitled, “Request for Rollover Approval for Past Service."

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

The member and a representative from his or her qualified plan or financial institution would complete the form. After IMRF receives the completed form, we will determine if the funds are eligible for rollover into IMRF and advise the member accordingly.

If employer pays the member cost:
In situations where an employer agrees to pay the member’s cost, the employer must treat the payment as earnings paid to the member. All applicable deductions must be withheld. (See 4.24 I. Employer Paid Member Contributions.)

If the payment is NOT made through the TPDP, the employer would submit the payment as a First Data Government Solutions Electronic Funds Transfer (EFT) payment and identify the EFT as ”After Tax Payment for Member Past Service.”

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