Payments to Retiring Employees

By law, certain payments made to retiring employees must be certified in an open meeting by your governing body before you can make the payment.

IMRF does not administer this law. We will give you the factual information you need about your employee’s IMRF account and projected future costs. However, we cannot answer any questions about interpreting these legal requirements or offer advice on whether you should have a payment certified. You must consult with your own legal counsel for any questions you have about interpreting or complying with this law.

Requirements as Outlined in the Law

This certification requirement applies if the payment:

• Is paid to an employee who participated in IMRF before 1/1/2011, and
• Increases the member’s reportable earnings by more than 6% over what the member was paid in the previous month, and
• Is paid in the following time frame (must meet all three conditions below):
  1. After the employee has told you his or her retirement date
  2. No more than 12 months before the actual retirement date
  3. At least 90 days before the actual retirement date

A payment that meets the above criteria is exempt from the certification requirement if the payment is:

• Made to an employee covered by a collective bargaining agreement
• Required by federal or state law

Information to Bring to the Open Meeting

If a payment is subject to the certification requirements, you must bring the following information to the open meeting:

• The name of the employee
• The purpose of the payment
• The date of the employee’s retirement
• The amount of the payment
• How this payment will increase the employee’s pension amount
• How this payment will affect your employer’s pension cost

Spreadsheet to Help You with Calculations

We have created a spreadsheet that will calculate how the payment will affect your employee’s pension amount and your employer’s cost. Follow the instructions on the spreadsheet to calculate the information you will need for your meeting.

For More Information

Read the full text of this law here. Remember, you must consult with your own legal counsel for any questions on how to interpret and comply with this law.