IMRF is not funded by the state of Illinois. IMRF is funded by three sources:
- employee contributions, from members like you
Investment returns fund the greatest portion of pension costs: more than 60 percent.
Employee Contributions
Most IMRF members participate in the Regular plan, contributing 4.5% of their salary toward their future pension.
Employer Contributions
Each IMRF employer builds its own account to fund the pension benefits of its employees. Each IMRF employer has its own unique contribution rate, set by IMRF annually. An employer's contribution rate is based upon its employees' salaries, ages, years of service credit, and other factors, as well as the return on IMRF's investments.
In 2021, the average employer Regular Plan contribution rate will equal 10.62% of their employees’ salaries, which means your employer is contributing more than double your contributions, helping you build your retirement savings much more significantly than you could on your own (15.12% of your salary vs 4.5%).
Investment Returns
IMRF then invests these employee and employer contributions, and the returns on these investments are used to fund the largest portion of your pension. Investment returns have built the IMRF portfolio to more than $45.2 billion (as of September 30, 2020). These assets are held in trust; they are not public money to be spent for any purpose other than for IMRF members' disability, retirement, and death benefits.
Funding Your Future Pension
When you retire, IMRF actuaries will calculate the amount needed to pay your pension for the rest of your life. With that figure determined, IMRF will transfer all of your employee contributions and all employer contributions made on your behalf into the Annuitant Reserve account used to pay pensions.
IMRF will pull any shortfall from its investment earnings. All the monies that IMRF will ever need to pay your future pension will be in our Annuitant Reserve account, and your future pension will be 100% funded.
