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Retirement Savings - IMRF Voluntary Additional Contributions

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In December 2018, the IMRF Board of Trustees reduced the return it assumes it will earn on IMRF's investment portfolio from 7.5% to 7.25%. This change affects IMRF employers and members in certain ways.

IMRF members may make voluntary additional contributions (VAC) to supplement their standard IMRF pension. Interest paid on VAC is linked to the IMRF assumed rate of return. Therefore, a decrease to the assumed rate of return lowers the rate of interest earned on VAC. IMRF credits VAC interest on December 31 each year, based on the VAC in the member's account on January 1 of the same year. Interest credited on December 31, 2018, was 7.5%, but due to the assumed rate of return change, interest credited on December 31, 2019, will be 7.25%. IMRF will inform members with VAC on file of the interest rate change.

Additionally, in certain circumstances, members may purchase IMRF past service credit. When members purchase additional past service credit, interest is included in calculating the amount owed. The amount of interest paid it linked to the assumed rate of return. As a result, an interest rate of 7.25% will be charged on past service purchases for service starting January 1, 2019, or later.

Read more about the effects of the assumed rate of return reduction on IMRF employers and members here.




IMRF’s Voluntary Additional Contribution (VAC) program is an easy way to help you save additional retirement income. Voluntary Additional Contributions:

  • Are limited to a maximum of 10% of your IMRF reportable earnings.
  • Are after tax, not tax-deferred.
  • Are a separate individual account consisting only of your contributions and any interest you earn on them. Employers do not make any contributions to your VA account.
  • Accrue interest differently than traditional saving accounts.
  • Continue to earn interest for as long as they are left on deposit with IMRF

If you reach 40 years of service and choose to stop making IMRF contributions, you must also stop making Voluntary Additional Contributions.

How to Start Making Voluntary Additional Contributions

To start making VAC contributions:

The VAC program is available to all IMRF members -- your employer must allow you to participate in this program.

Your VA contributions:

Can be left on deposit if: Can be withdrawn if: MUST be withdrawn if:
  • You are still participating in IMRF and still making VAC contributions
  • You are still participating in IMRF but you stop making contributions to your VAC account
  • You stop working for your IMRF employer but you leave your regular IMRF contributions on deposit
  • You are still participating in IMRF, even if you continue making future contributions to your VAC account.
  • You stop working for your IMRF employer and you leave your regular IMRF contributions on deposit.
  • You stop working for your IMRF employer and request a separation refund of your regular IMRF contributions.
  • You retire from IMRF. If your VAC balance is at least $4,500, you can choose a monthly annuity instead of a lump sum refund.

Requesting Voluntary Additional Contribution Refunds

You can take a refund of your VAC at any time. You must withdraw all of the contributions you made—you cannot take a partial refund. Your employment status determines when you receive your interest.

If you are still working for an IMRF employer:

  • You will receive a refund of your VA contributions only. Your interest must remain on deposit with IMRF until you either retire from IMRF or stop working for your IMRF employer. Interest on deposit will continue to earn additional interest.
  • You may choose to continue making future VAC contributions or stop making contributions.

If you no longer work for an IMRF employer:

  • You will receive a refund of your VA contributions and all interest earned.
  • The interest earned on your VAC is tax-deferred. If you do not roll over your interest directly into an IRA or other qualified retirement plan, IMRF is required by federal law to make a tax withholding of 20% of the interest. If you are under age 59-1/2, you may have an additional early withdrawal tax.

To request a refund of your VAC, return a completed "Request For Refund of Voluntary Additional Contributions" form to IMRF.

How IMRF Credits VAC Interest

VAC interest is credited differently from a traditional savings account:

  • A traditional savings account credits interest on the current amount in the account.
  • IMRF credits interest at the end of the year based on the opening balance amount at the beginning of the year. Therefore, you will not earn any interest the first year you begin making VAC.
  • The rate of interest paid is currently 7-1/2%. This rate may change in the future. If it does, IMRF will not directly notify you; however, the current interest rate will always be on our website.
Voluntary Additional Contribution Interest Example
Year 1 January 1 Opening Balance
VA Contributions made during Year 1
Interest credited on Year 1 December 31based upon
January 1 opening balance of $0 x 7.50%
Year 2 January 1 Opening Balance
VA Contributions made during Year 2
Interest credited on Year 2 December 31, based upon
January 1 opening balance of $400 x 7.50%
Year 3 January 1Opening Balance
VA contributions made during Year 3
Interest credited on Year 3 December 31, based upon
January 1 opening balance of $930 x 7.50%
Year 4 January 1Opening Balance

Retiring with Voluntary Additional Contributions

If you leave your VAC on deposit until you retire from IMRF, at retirement you may choose to receive your Voluntary Additional Contributions as either:

  • A lump sum
  • A monthly annuity if your VAC balance is $4,500 or more:
    • Every January, you will receive a 3% increase on your VAC annuity.
    • This increase is calculated on the original annuity amount.
    • Employers do not contribute to this annuity.

You can log in to your secure Member Access account and create a pension estimate to review lump sum and monthly pension amounts of your VAC on deposit plus interest to the date of your estimated retirement. You must have VA contributions on deposit to create a VAC pension estimate.