Lisle Police Pension Fund
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 EMPLOYEE CONTRIBUTIONS and TAXATION

Pension benefits are funded by contributions made by active officers, the annual tax levy, and investment returns.  All participating officers must contribute 9.91% of their base salary to the pension fund.  The Pension Board, with IRS approval, has established a tax deferred method of deducting pension contributions.  This is often called “employer pick-up” of contributions.  This process is allowed by Illinois Law, but requires application and approval thru the IRS.  Officers still pay the same contribution rate of 9.91%, only on a tax deferred basis - the end result is a modest tax savings for officers.

Taxation of pensions by state governments is governed by state law.  Illinois does not currently tax pension payments.