Leaving Your IMRF Employer

for Active IMRF Members

If you are leaving your current IMRF employer, you may have questions about what you should do with your IMRF contributions.

If You Will Still be Participating in IMRF

If you are changing jobs from one IMRF employer to another and will be making IMRF contributions through your new employer, you do not have to do anything about your IMRF service credit:

Your next Personal Statement of Benefits will show you your total service credit under each IMRF employer you have worked for. You need a Member Access account to view your Personal Statement of Benefits.

If You Won't Be Participating in IMRF

If you will not continue to participate in IMRF, you can leave your contributions on deposit with IMRF or, in most cases, you can take a refund. You are not required to take a refund when you leave your IMRF employer. There is no “deadline” for you to make your decision, but you will not earn any interest on your contributions if you end up taking a refund, no matter how long you have left them with IMRF. Once you reach your required minimum distribution (RMD) age, you must withdraw them. (See www.irs.gov for more information about your RMD.)

Leave Your Contributions on Deposit With IMRF

If you leave your contributions on deposit with IMRF, you are considered an “inactive” member. This option makes sense if you are vested for an IMRF pension or if you think you may work for another IMRF or reciprocal system employer in the future. When you are an inactive member:

Take a Separation Refund

When you take a refund of your IMRF contributions, you lose all of your service credit and you give up your right to any future IMRF pension and death benefits. Consider this decision carefully if you are vested or if it is likely you will go back to work for another position covered by IMRF or an Illinois reciprocal retirement system.

In order to take a refund:

If you decide to take a refund, you have two options on what to do with your money. Each option has different tax consequences:

Rollover your refund Receive a direct payment
Rolling over your refund offers you tax benefits.
  • When you rollover your refund into an IRA (other than a Roth IRA) or other eligible retirement savings account, your contributions remain sheltered from taxes until you withdraw them.
  • If you roll over your refund into a Roth IRA, you will have to pay taxes up front; however, as long as you follow the withdrawal rules you can withdraw your money tax free – even the increase on your original amount that was earned as investment income.
  • IMRF is required by federal law to withhold 20% of the taxable portion of your refund unless you elect to have the taxable portion directly rolled over into a traditional IRA (not a Roth IRA) or other qualified retirement plan.
  • Depending on your age, you may also be liable for an additional 10% tax on the taxable portion of your refund. You may defer the additional 10% tax by directly rolling your refund into a traditional IRA or other qualified pension plan.

How to Apply for Your Refund

To apply for a refund online, sign in to your Member Access account and follow the prompts.