We have performed classical molecular dynamics simulations to calculate the Optical Kerr effect (OKE) spectra of 1-methoxyethylpyridinium dicyanoamide, a room-temperature ionic liquid (IL) which has been recently studied by Shirota and Castner (Shirota, H.; Castner, E. J. Phys. Chem. A 2005, 109, 9388-9392) in comparison to its neutral isoelectronic solvent mixture. Our theoretical and computational studies show that the decay of the collective polarizability anisotropy correlation exhibits several different time scales originating from inter- and intramolecular dynamics, in good agreement with experiments. What's more, we find that the portion of the collective anisotropic polarizability relaxation due to"interaction-induced" phenomena is important at times much longer than those observed in normal solvents when these are far from their glass transition temperature. From our long (60 ns) molecular dynamics simulations, we are able to determine the appropriate time scales for orientational relaxation and interaction-induced processes occurring in the liquid. We find that the cationic contribution to the OKE signal is predominant. Because of the slow nature of relaxation processes in ILs, these calculations are very time, memory, and storage intensive. In the context of this research, we have developed a polarizable force field for this system and also theoretical methodology to generate molecular polarizabilities for arbitrarily shaped molecules and ions from corresponding atomic polarizabilities. We expect this methodology to have an important impact on the speed of molecular dynamics simulations of polarizable systems in the future.