Essentially it was negotiated by employer and employee groups back in 1992. In lieu of compounding the 3% annual increase, employers agreed to pay 62/100th of 1 % of the IMRF payroll into a pool to be distributed to retirees. To be eligible, the retiree must be in retirement one year by July 1st . The distribution is in July. The amount is the relation of your June benefit payment to all benefit payments in that month. The first payment was in July, 1993. A pool of $18.16 million was distributed, with the average recipient receiving 90.28 % of their June payment. In 2013, the pool was $41.21 million with an average payment of 37.87%. The payment has dropped in relative value because the size of the retiree payroll ( what IMRF pays as benefits ) has grown faster than the increase in IMRF employer payrolls for participants. The statute provides that if the annual 3% increase is ever compounded, the 13th payment will cease.