Fundamentals Newsletter

If you are planning to work for an IMRF employer again in the future and hope to become vested in your IMRF pension, this FREE webinar about your IMRF benefits and planning ahead for retirement may be of interest to you.

An IMRF Field Representative will explain how IMRF pensions are funded, your benefits as an IMRF member, and the importance of having more than one savings vehicle as you prepare for your eventual retirement.

Your Glass is Half Full: Understanding Your IMRF Benefits Workshop webinar dates:

Thursday, November 12, 5 pm - 6 pm (central time)

Thursday, December 10, 5 pm - 6 pm (central time)

For more information, or to register for a Your Glass is Half Full Workshop webinar, click here.

Refunds, Rollovers, and the CARES Act!

If you have left your IMRF employer and are not planning to work for an IMRF employer in the future, you can request a refund of your IMRF contributions.

However, by taking a refund, you will forfeit any IMRF service credit you have earned. If you take a refund, you may want to consider rolling it into a qualified retirement account.

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.

If you receive a direct payment instead of rolling your refund over:

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 an IRA or other qualified retirement plan, or
You qualify for special tax treatment under the CARES Act (see below)

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. If your refund is taken for "coronavirus-related" purposes, you may be exempt from the additional 10% tax. (see below)

Refunds Taken for Coronavirus-Related Purposes are Exempt from Early Withdrawal Penalty

The Coronavirus Aid, Relief, and Economic Security (CARES) Act makes refunds of IMRF contributions requested for a "coronavirus-related" purpose exempt from the 10% early withdrawal penalty. It also requires IMRF to withhold only 10% of the taxable amount (instead of the usual 20%). You can also choose to have no tax withheld.

There are specific requirements for this type of refund, and not all IMRF members qualify. For more information on whether you qualify and how to apply for this type of refund, click here.

IMRF Bounces Back From Market Changes Related to COVID-19

Leading into 2020, IMRF was enjoying very strong investment returns from 2019 and assets that had grown to $44.8 billion.

Changes in the market in the first quarter of 2020, due to the COVID-19 pandemic, caused IMRF’s investment portfolio to fall 14.0%.

However, markets improved during the second and third quarters, and the first quarter loss has already been recovered and exceeded. Assets were at $45.2 billion at the end of September.

As a long-term investor, IMRF has planned for downturns in the market and has sufficient resources to meet all benefit payment requirements. You can count

on IMRF to fulfill its promises to you.

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