Accelerated Payments

What is an Accelerated Payment?

Certain increases in reported earnings during a member's Final Rate of Earnings (FRE) period result in additional pension costs. Employers are required to pay this additional cost immediately upon the member’s retirement. This payment is called an Accelerated Payment.

IMRF Will Send You an Accelerated Payment Invoice

If a member retires from your employer with an end-of-career increase in reported earnings of 6% or higher, IMRF will send you an Accelerated Payment Invoice that details the amount your employer must pay to IMRF.

Accelerated Payment Exemption Request

Certain increases in reported earnings are eligible for an exemption from the Accelerated Payment. Your Accelerated Payment Invoice will include a “Request for an Accelerated Payment Exemption” form. If your Accelerated Payment qualifies and you want to apply for an exemption, you must complete and return this form along with the required supporting documentation.

Qualified Accelerated Payment Exemptions

The following increases in reported earnings may be considered for an exemption. If you apply for an exemption, you must list one of these exemptions on your form:

• Overtime or overload Hours
• Increase in required Hours
• Workers’ compensation
• Standard promotion
• Vacation time payout
• Increase due to member returning to their regular schedule after a period of reduced hours
• Payments required to be made under state or federal law or by court mandate
• Personnel Policies
• Collective Bargaining Agreement

Additional Details and Required Documentation for Each Exception

• Overtime or overload hours: Overload hours are temporary assignments outside of the member’s normal responsibilities. For example, a teacher aide is temporarily given additional duties as a bus driver.

Required documentation you must submit with your Request for an Accelerated Payment Exemption form:


• Documentation summarizing number of overtime/overload hours and dollar value attributable to each wage period shown on the AP invoice.


• Increase in Required Hours: An increase in the number of hours worked. An increase in required hours does NOT include overtime or overload hours or a promotion. A change from part-time to full-time is also considered an increase in required hours.

Required documentation you must submit with your Request for an Accelerated Payment Exemption form:


• Written documentation showing the member worked additional hours, AND
• Statement explaining why the additional hours were required, AND
• Statement explaining that the member’s hourly wage:
• Did not increase over the previous 12-month period, OR
• Did increase, but the increase did not exceed the greater of 6% or 1.5 times the increase in the CPI-urban for the same time period in the previous year, AND
• Worksheet showing the wage increase (wages to be exempt from Accelerated Payment).


• Workers’ compensation: An increase that results from periods when the member received workers’ compensation.

Required documentation you must submit with your Request for an Accelerated Payment Exemption form:


• Documentation showing the amount of workers’ compensation paid to the member and the date(s) of the payment(s)
  
  
• Standard Promotion: A standard promotion must result in increased responsibility and workload for the member.
  
  Required documentation you must submit with your Request for an Accelerated Payment Exemption form:
  
  
• Documentation showing date of the promotion, AND
• Copies of old and new positions’ job descriptions, AND
• Narrative detailing nature of increased workload and responsibility, AND
• Worksheet showing the wage increase (wages to be exempt from Accelerated Payment).
  
  
• Vacation Time Payout: Payments for unused vacation time. The payments must be made in the final three months of the member’s Final Rate of Earnings period to meet this exemption.
  
  Required documentation you must submit with your Request for an Accelerated Payment Exemption form:
  
  
• Documentation summarizing the amount of unused vacation time paid out and the amount of earnings reported for the vacation time
  
  
• Increase due to member returning to their regular schedule after a period of reduced hours (for example, when a member returns from a COVID-related furlough)
  
  Required documentation you must submit with your Request for an Accelerated Payment Exemption form:
  
  
• Documentation summarizing the reduction and subsequent restoration of hours worked
  
  
• Payments required to be made under state or federal law or by court mandate: An increase in pay that is required under state or federal law (for example, due to a change to the minimum wage) or by court mandate.

Required documentation you must submit with your Request for an Accelerated Payment Exemption form:


• For an increase in pay required under state or federal law, a summary of the law. To the extent possible, please give a citation (preferred) or the title of the law that requires the payment.
• For a court mandated increase, a copy of the court order
  
  
• Personnel Policies: For a personnel policy to qualify, it must meet two requirements:
  
  
1. Your governing body must have adopted the personnel policy before January 1, 2012.
2. The policy must specify that members who began IMRF participation after December 31, 2011 will either:
• Not receive similar earnings increases.
• Will receive similar increases, but the increases will not be paid in the IMRF earnings period.
  
  
The personnel policy must meet both of these requirements. If it only meets one of the above requirements, it DOES NOT qualify for an exemption.

Required documentation you must submit with your Request for an Accelerated Payment Exemption form:


• Copy of personnel policy provision providing for the increase, including the date it became effective, AND
• Copy of personnel policy provision showing that the earnings increase for which the exemption is claimed does not apply to employees who begin service on or after January 1, 2012, AND
• Narrative and any other supporting documentation that will allow IMRF to better understand the nature of the payment, AND
• Worksheet showing the wage increase (wages to be exempt from Accelerated Payment).
  
  
• Collective Bargaining Agreement: This situation is not common. The earnings increase must have been paid under a contract or collective bargaining agreement that was entered into, amended, or renewed before January 1, 2012.

Required documentation you must submit with your Request for an Accelerated Payment Exemption form:


• Contract or collective bargaining agreement, including its date of approval, amendment or renewal, AND
• A statement by the employer which indicates the provision within the contract or agreement under which the earnings increase was paid, AND
• Worksheet showing the wage increase (wages to be exempt from Accelerated Payment), AND
• Any other pertinent information showing the increase meets this exemption

Current Interest Rate for Accelerated Payment Invoice

Your Accelerated Payment Invoice must be paid within 90 days to avoid accruing interest. If you do not pay within 90 days, your invoice must be paid within three years after the initial 90-day period and interest will accrue. The current interest rate is 7.25%, and it is compounded annually.

An Exemption Does Not Eliminate Liability

Receiving an Accelerated Payment exemption does not mean your employer doesn’t have to pay this cost. Receiving an exemption means the cost will be paid over a longer period of time, through your employer’s contribution rates.

Estimate Your Future Accelerated Payment

To help you estimate your future cost of an increase in reported earnings, we have created Excel spreadsheets for Tier 1 and 2.

If you are planning to provide a member with an increase in reported earnings of more than 6% (or 1.5 times the increase in the CPI-Urban as of the previous September, whichever is greater), you can use these spreadsheets to estimate future cost (payable when the member retires).

Note: Due to inflation, IMRF will be using the “1.5 times the increase in the CPI-Urban” calculation starting January 1, 2023.

Accelerated Payment Estimator Spreadsheets

IMRF updates these spreadsheets occasionally. We recommend that you create a shortcut to this page instead of making a copy of the spreadsheets. This ensures you will always use the most current versions.

You can download the Excel spreadsheets from the Quick Links menu above (updated September 2022) to estimate the amount of any Accelerated Payment:

• Your actual Accelerated Payment may be different, either higher or lower than the estimate provided by the spreadsheet
• The spreadsheets can be used only for members within 10 years of retirement

To calculate the Accelerated Payment you will need to enter the member's:

• Date of birth
• Estimated termination date
• Gender
• Marital status
• Total IMRF service at retirement IMRF plan
• Monthly wages for each month up to the member's termination date

Additional instructions and important details on the spreadsheets' limitations are included in the "Instructions" tab of the spreadsheet.

Questions? Send IMRF a secure message.