Members are often frustrated when their monthly IMRF disability benefit is reduced to $10.00. Your benefit could be reduced because you are entitled to Social Security disability, Social Security full retirement, or workers’ compensation benefits. However, that $10.00 represents a much greater value.
Your IMRF disability benefits are valuable because:
- You continue to earn service credit toward your future IMRF pension, at no cost to you.
- Your death benefits would still include one year's salary, and death benefit options are the same as if you were still working.
- You could receive monthly payments up to 50% of your average monthly salary (based on the 12 months before the month you became disabled).
- Your retirement benefits will not be affected by the amount of your disability benefit. Your original salary will be used to calculate your retirement benefit.
A reduced benefit still protects you
If you receive Social Security disability and/or workers' compensation benefits, by law IMRF disability benefits must be reduced by the amount you receive from these benefits. Even if the amount you receive from Social Security disability and/or workers' compensation exceeds 50% of your income, IMRF will always pay you a minimum monthly benefit of $10.00 to make sure your other IMRF benefits are protected.
Why is $10.00 a month so important?
Even though it may not seem like a lot of money, this $10.00 benefit is worth much more than you might realize. Every month you receive a disability benefit from IMRF:
- Your service credit is protected—you earn an additional month of service credit toward your future pension and you avoid any gaps in service that could affect your future benefits.
- Your pension is protected—your retirement benefit will be calculated using your original salary, not the reduced disability amount.
- Your family is protected—your death benefits would still include one year's salary, and death benefit options are the same as if you were still working.
The true value of a $10.00 monthly benefit
To understand the true value of a $10.00 monthly benefit, consider the following example:
Marty Member is a Tier 1 SLEP member who has a salary of $55,000 a year and 17 years of service credit when he becomes disabled at age 45. Marty is disabled for two full years before he becomes well enough to return to his IMRF position.
Because Marty was eligible for other disability compensation, his monthly IMRF disability benefit was reduced to $10.00. However, had Marty not been receiving that $10 monthly benefit, he would have lost two entire years of service credit. When Marty retires at age 50, this is the difference those two years of service credit would make in Marty’s pension payment:
Marty’s 24 months of service credit are protected |
Marty’s 24 months of service credit are not protected |
|---|---|
Although Marty only received a total of $240.00 in disability payments for the two years he was disabled, that $240.00 represents an additional $2,742 per year in retirement. His pension amount will increase every year, and he will receive his pension for as long as he lives.
This has a positive impact on Marty’s pension amount, because part of what determines the amount of your IMRF pension is how much service credit you have. Each $10 payment is equal to $4,583.33 reported wages in monthly service credit toward Marty’s pension. (Click here to learn more about how your IMRF pension is calculated.)
This same $10.00 monthly payment:
- Protects your IMRF death benefits. For example, it makes sure your death benefits include a full year of your salary. Without that $10.00 a month, you would be considered an inactive member and your death benefits would no longer include a year of your salary.
- Can make a difference in how long you need to work before you are eligible to retire. If you are not vested for your pension and you lose a year of service credit, you will have to work a year longer before you vest for your IMRF pension.