The Illinois Municipal Retirement Fund (IMRF) provides defined benefit pension coverage to most non-teacher employees of Illinois local governments, counties, municipalities, school districts (non-certified staff), park districts, and special districts. Regular Plan members earn 1.67% of final rate of earnings per year of service for the first 15 years and 2.0% per year thereafter, with full benefits available at age 60 with 8 years of service or 30 years of service at any age. Unlike many state pensions, IMRF members also pay into and receive Social Security.
IMRF is one of the better-funded major pension systems in Illinois, currently funded at approximately 96%, substantially better than the state's pension funds (TRS, SERS, JRS) which are funded around 40-50%. This funding strength means IMRF pension promises are more secure than most other Illinois public pensions, though no defined benefit pension is risk-free over a 30-year retirement.
Benefit calculation: IMRF Regular Plan benefits are based on final rate of earnings (FRE), typically the average of the highest 96 consecutive months of earnings, multiplied by a service-based formula (1.67% per year for first 15 years, 2.0% per year thereafter). A 30-year IMRF employee earning $80K final average would receive: 15 × 1.67% + 15 × 2.0% = 25.05% + 30.0% = 55.05% × $80K = $44,040/year, or $3,670/month. Annual cost-of-living adjustments (COLAs) of 3% (simple, not compound) provide modest inflation protection.
Retirement eligibility: full benefits at age 60 with 8 years of service; full benefits at any age with 30 years of service; reduced benefits available at age 55 with 8 years (early retirement reduction). The 30-year-at-any-age provision is particularly valuable for employees who started young, a 28-year-old hired by a Northern Suburbs municipality could receive full IMRF benefits at 58. Tier 2 (employees hired after 2011) faces stricter rules: full benefits at 67 instead of 60, longer FRE averaging period, and lower COLA formula.
Coordination with Social Security: IMRF members pay Social Security tax and earn Social Security credits. IMRF is NOT covered by the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) that reduce Social Security benefits for some other state pensioners (TRS, SURS members may face WEP/GPO issues). This makes IMRF retirees better positioned than Illinois teacher retirees, who often see significant Social Security reductions due to WEP if they have non-teaching employment.
Key facts
- IMRF Regular Plan: 1.67% × first 15 years + 2.0% × years over 15 of final average earnings
- Tier 1 retirement: full benefits at 60 with 8 years service or any age with 30 years
- Tier 2 retirement (hired after 2011): full benefits at 67 with 10 years service
- FRE: average of highest 96 consecutive months (8 years) of earnings. Tier 2 uses 96-month average
- COLA: 3% simple annual (Tier 1); lesser of 3% or half CPI for Tier 2
- IMRF members receive Social Security benefits without WEP/GPO reductions (unlike TRS/SURS)
Can I take a lump sum from IMRF instead of monthly pension?
Generally no for vested employees with 8+ years of service. IMRF is structured as a lifetime annuity, that's its primary purpose. Employees who terminate with less than 8 years of service can receive a refund of their contributions plus interest (a much smaller amount than the eventual annuity value would be). For vested members, the choice at retirement is typically among different annuity forms (single life, joint and survivor at various survivor percentages), not between annuity and lump sum. This is one of the protective features of IMRF compared to corporate pensions where lump sum offers can be irresistible but financially unwise.
What happens to my IMRF pension when I die?
Depends on the annuity form elected at retirement. Single Life Annuity stops at the recipient's death, with no continuing benefit to spouse. Joint-and-Survivor options continue at 50%, 75%, or 100% to a designated beneficiary (usually spouse) for their lifetime, in exchange for a reduced monthly amount during the recipient's life. Most IMRF retirees elect 50% or 75% joint-and-survivor to provide spousal protection. If a retiree dies before receiving back their member contributions, the difference is paid to the beneficiary. IMRF death benefits also include a small additional payment ($3,000) to the beneficiary.
