Only you can decide whether purchasing any service credit will be “worth it” and provide enough of a pension increase to make up for the cost of the service.

Once you have looked at the Types of Service and How to Apply and submitted the correct form, IMRF will send you a buyback election confirmation letter.

Then you can request pension estimates from IMRF to see how purchasing service will change your pension amount. In In most cases, you will need to request two pension estimates—one with your current service through retirement, and one that includes the service you may purchase. However, if you are trying to decide between buying all or only a portion of your service, you may wish to request several estimates with different amounts of purchased service credit.

Requesting a Pension Estimate

To request a pension estimate from IMRF, call an IMRF Member Services Representative at 1-800-ASK-IMRF (275-4673), or submit a "Pension Estimate Request" form (Available in Member Access).

Note: If you currently participate in a reciprocal retirement system, request pension estimates from your current system, not IMRF. When you request your reciprocal estimate, let your system know you intend to purchase IMRF service.

Do not use an estimate from the pension estimator in Member Access to decide whether to purchase service.

Comparing the Estimates

Once you receive both of your pension estimates, you will be able to see the difference purchasing service credit will have on your pension. Compare the amounts of your standard monthly pensions and the yearly increases from each of your estimates, with and without the additional service.

Determining Whether it is “Worth it” to Buy the Service

Purchasing service can be expensive. How will you know if the amount you paid for your purchased service will be “worth it” in the form of an increased pension benefit?

To help make this decision, you want to determine how long it will take you to “make back” the amount you paid for your purchased service credit in the form of an increased pension benefit.

Calculating the "Break Even" Point

How can you do this? You’ll need to know:

1. The total amount that you will pay for your service credit.
2. The amount your pension will increase each month with your purchase of service credit. Find this number by subtracting the monthly pension amount you’ll receive without purchasing the service from the increased amount you’ll receive if you do purchase the service.

Once you determine both these amounts, divide the total amount you paid for your service credit by the amount of your pension increase. That number will be the number of months you will have to receive your increased pension to recover the cost of the service you purchased.

For example, using the buyback election confirmation letter and pension estimate examples in this booklet, our member paid a total of $2,590 for her service credit. According to her pension estimates, purchasing this service will increase her monthly pension from $723 to $799—so she’ll get $76 more, per month, in pension benefits. How many months of receiving this increased pension will it take for her to “make back” the money she paid for the increased service credit? $2,590 ÷ 76 = 34 months

Therefore, in this example, it will take this member about 34 months—two years and 10 months—of receiving the increased pension to recover the $2,590 that she paid for her past service.

After you know how long it will take for you to recover the cost you paid for your specific purchase of service, you can decide whether the purchase of your service credit will be worth it to you.

Cases Where Buying Past Service Credit May Not Make Sense

There are a few instances under which purchasing service may not benefit you:

• The cost of your service credit is extremely high. If the cost of your service credit is greater than the increased pension benefit it will provide you, it may not benefit you to purchase your past service credit.
• You will purchase “too much” service credit. In the IMRF Regular Plan, your IMRF pension is limited to a maximum of 75% of your final rate of earnings. You reach this maximum pension payout when you have earned 40 years of service. If your purchase will increase your total service credit beyond 40 years, in most cases the years and months beyond 40 years will not increase your pension benefit. If you are retiring under the Reciprocal Act, different rules may apply.

Changing Your Mind Later

Once you pay for any service, we cannot refund any payment made to us. If you have a question about whether the purchase of any service credit will benefit you, contact an IMRF Member Services Representative at 1-800-ASK-IMRF (275-4673) before making any payments for service credit.

Concurrent Service Credit

Concurrent service occurs when more than one employer reports wages and contributions for you for the same month.

When you participate in the same IMRF plan under different employers, or you participate in two different IMRF plans (such as Regular and SLEP) under different employers, you have concurrent service credit.

You can also have concurrent service credit with IMRF and a reciprocal system.

How concurrent service may affect your pension

If a large amount of the service you will purchase is concurrent with your existing service credit, it may not benefit you to purchase it, especially if the service credit period will not be used to calculate your final rate of earnings for pension benefit purposes (purchased service periods may also affect death and disability benefits).

If some of the service you will purchase is concurrent, contact IMRF to find out whether your purchase of concurrent service credit will benefit you.

If some of the service you will purchase is concurrent reciprocal service, contact your current retirement system and request a pension estimate which includes your concurrent service.