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Indiana Public Retirement System

Indiana Public Retirement System (INPRS) > My Fund > Public Employees > PERF ASA Only Plan Member Handbook: Benefit Structure PERF ASA Only Plan Member Handbook: Benefit Structure

Annuity Savings Account (ASA)

There are two types of contributions within the ASA Only plan – a 3 percent fixed rate and a variable annual rate. Both are paid by the employer. Your employer also pays a percentage of payroll to fund defined benefit pension plan liabilities. This is true regardless of which PERF option (ASA Only or Hybrid) you select. These funds are not paid into members’ Annuity Savings Accounts in either the ASA Only or Hybrid plans. These funds are not available for your investment or withdrawal.

Members must meet vesting requirements (full years of participation) to qualify for a full distribution of the variable annual rate contributions and earnings.

NOTE: You will not receive credit for partial years of participation.

Fixed and Variable Contributions

State law requires that 3 percent of your gross wages must be contributed to fund the ASA Only. There is also an employer contribution subaccount which receives an annual variable rate determined by the board of trustees. In order to receive contributions and earnings from this subaccount, you must meet the vesting requirements below:

Vesting schedule is as follows:

  • One year of participation = 20 percent
  • Two years of participation = 40 percent
  • Three years of participation = 60 percent
  • Four years of participation = 80 percent
  • Five years of participation = 100 percent

As a new employee of the state of Indiana or a quasi-governmental agency, the 3 percent is paid by your employer before taxes are calculated on your wages.

This is a mandatory contribution. It is sent to INPRS for deposit in your ASA Only, as mandated by state law. If you are not vested at the time of distribution, the non-taxable benefit will be paid directly to you in a lump sum or you can elect to roll over the non-taxable amount in some cases. If you are vested at the time of distribution, IRS regulations mandate that your non-taxable benefit must be recovered over the life of the annuity. A portion of each payment will be non-taxable until your entire post-tax voluntary contribution amount has been recovered.

You can only withdraw funds from your ASA Only as a distribution when you separate from covered employment or at retirement. You are not eligible for a distribution if you are an active member in PERF or TRF. If you are no longer in a PERF- or TRF-covered position but are still employed with the same employer, you are not eligible to take a distribution until you have a bonafide separation from service with your employer. Employment on a part-time basis is not considered separation from employment. YOU CANNOT TAKE A LOAN AGAINST YOUR ASA. You must fully separate from your employer in order to withdraw your funds.

Self-Directed Investment Options

The ASA Only plan allows members to actively participate in managing their retirement benefits through self-directed investment options. The 3 percent fixed and variable contributions (employer share) to your account are invested as a combined total according to your choices in one or more of the eight options available through PERF:

  1. Money Market Fund
  2. Fixed Income Fund
  3. Large Cap Equity Index Fund
  4. Small/Mid Cap Equity Fund
  5. International Equity Fund
  6. Inflation-Linked Fixed Income Fund
  7. Stable Value Fund
  8. Target Date Funds

You may choose among these options after you elect in the plan.

You may also log in to your PERF Online account to complete your investment direction election, or call (888) 526-1687 Monday through Friday from 8 a.m. to 8 p.m. EST, except holidays and weekends, to complete your request via phone with a customer service representative.

If you do not submit these choices to PERF, all ASA contributions will automatically be invested in a target date fund based on the year you will turn 65.

All contributions will initially go to a target date fund until you elect the ASA Only plan or default to the PERF Hybrid Plan. You will be able to view daily valuations of your ASA Only contributions and make daily changes to your investment allocations.

You can invest a portion of your account (present balance and future contributions) into any or all of the investment funds in at least one-percent increments. Or, you can invest your current contributions and new contributions separately. This means you can direct both current and future contributions or leave current balances as they are and direct future contributions only.

Quarterly Member Statements

Statements are available electronically on PERF Online. You can view your statements as long as you have money invested in your ASA – even if you are no longer employed in an ASA Only-covered position. Members who prefer a paper statement can register online for a mailed statement.

The quarterly statement shows contributions made and any change in value to your holdings. As an ASA Only member, the employer picks up the 3 percent mandatory contributions, which are before-tax contributions. The earnings on the contributions are tax-deferred until you take them out. Tax obligations apply when payment is made to you as a retirement benefit or an ASA distribution.

Rollover Savings Accounts (RSAs) into PERF

You can deposit taxable or non-taxable funds rolled over from any of the following:

  • A qualified plan described in IRS Section 401(a), 403 (a), 401(k), an annuity contract or account described in Section 403(b).
  • An eligible plan maintained by a state or political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state under IRS Section 457(b).
  • A Traditional Individual Retirement Account (IRA) described in IRS Section 408(a) or 408(b).
  • A traditional or conduit IRA

INPRS must maintain separate rollover accounts for members who have rollover accounts in both the PERF Hybrid plan and the ASA Only plan. The rollover accounts may only be combined if a member rolls one account into the other.

You may change investment elections with every rollover. You also maintain the right to transfer or allocate rollover balances.

You may request investment election changes when speaking with a customer service representative (CSR) or via the Web. Confirmation statements will be sent to you when you initiate an investment election change via the Web or with a CSR.

You may have separate investment elections for both the plan and rollovers. Elections can be made via the rollover contribution form. Voluntary distributions for rollover withdrawals require 100 percent of the available amount to be withdrawn.

These RSA funds may be invested in any of the current investment options. They may be withdrawn at any time prior to retirement. At retirement, these funds may be combined with your ASA Only as part of your total benefit.

Per IRS guidelines, rollover contributions should be completed by the 60th day after the day you receive the distribution from your traditional IRA or employer’s plan. The IRS may waive the 60-day requirement where the failure to do so would be against equity or good conscience, such as in the event of a casualty disaster*, or other event beyond your reasonable control. In the absence of a waiver, amounts not rolled over within the 60-day period do not qualify for tax-free rollover treatment. Checks must be received five business days prior to the 60-day limit. Please consult your tax professional if you have questions.

*Casualty disaster – a loss that can result from damage, destruction or loss of your property from any sudden, unexpected or unusual event as a flood, hurricane, tornado, fire, earthquake or volcanic eruption. A casualty does not include normal wear and tear or progressive deterioration.

Participating in the Plan

Membership Eligibility

As a first-time, full-time employee of the state of Indiana, you are eligible for membership in the ASA Only plan. Your plan election must be made in writing, must be filed with the board on a board-prescribed form, and is irrevocable.

Or, you may elect to become a member of the PERF Hybrid plan which offers the PERF defined benefit pension (a monthly benefit for life) and ASA. If you do not elect to become a member of the ASA Only plan within 60 days of your hire date, you become a member of the PERF Hybrid plan.

You could have been enrolled in any of the seven funds with a previous employer prior to state of Indiana employment. If you previously worked for the state of Indiana in a position covered by PERF, you are not eligible for the ASA Only plan. However, if you are a first-time, full-time state of Indiana employee who elects the ASA Only plan and then leaves state employment and returns, you must resume membership in the plan.

For a position to be ASA Only-covered, making you eligible for membership, the position must be:

  • Full time, and you must be a first time state of Indiana employee, Determined by your employer as a position covered by PERF
  • Not covered by another public retirement or pension plan (except Social Security or the Prosecuting Attorneys’ Retirement Fund, established by IC 33-39-7-9)
  • There are some statutory exclusions for membership in the plan, as laid out in IC 5-10.3-7

Enrollment

When you begin working in an ASA Only-covered position, your employer will complete a Membership Record informing INPRS that you have become employed in a covered position and will begin participation in the ASA Only plan or PERF Hybrid plan. You will have a 60-day window to elect a plan choice. If you do not make an election within this timeframe, you will automatically default in to the PERF Hybrid plan. You will receive a letter in the mail confirming your plan election.

INPRS will open an ASA Only account in your name and you will formally become a member. You will receive a welcome packet detailing your membership information. The packet will include a PIN number with instructions on how to access your online account (PERF Online) in order to make an election. A passcode will also be mailed to you. PERF Online will allow you to designate beneficiaries, update your address, and make fund allocations for your contributions. If you do not make contribution allocations, your contributions will default to a target date fund based on your estimated year of retirement.

Naming Beneficiaries

You immediately begin saving for your retirement when you become a member. After enrollment, you may name a beneficiary to receive the assets remaining in your account after you pass away. You may name one or more individuals, such as a spouse or dependents, a trust, estate, or other legal entity, such as a charity. If you designate more than one primary or contingent beneficiary for your account, benefit shares may be allocated in percentage increments.

If there is no beneficiary on file, benefits will be paid to individuals listed in the first category in which there are survivors:

  • Surviving spouse
  • Surviving dependents, if no surviving spouse
  • Your estate, if no surviving spouse or child

Changing Your Personal Information

As long as you have assets with the fund, it is critical that you keep INPRS informed of any changes to your name, address or beneficiaries. You can most easily update your address and beneficiary information registering for PERF Online via this Web site. Changing your name, address or beneficiaries with your employer will not update that information with INPRS. You will need to contact INPRS separately to update your personal information.

Beneficiaries – You may change the beneficiary of your account at any time before you take a distribution. You may do so by registering for PERF Online. Use the View or Change Beneficiary function or request the appropriate paperwork by phone or fill out the form and mail it back to INPRS.

The importance of reporting any change of beneficiary cannot be overemphasized. Failure to make changes could result in payment being made to a named beneficiary who is no longer your choice to receive it.

Address/Name – The address on file in INPRS’ records is the only contact information we have for you. If you leave ASA Only-covered employment, you may be eligible to receive a distribution of your account. Therefore, report any change of address directly to INPRS in a document that includes the following:

  • Social Security number,
  • Previous name and/or address,
  • New name and/or address, and
  • Printed name and signature.
  • Employer’s name should also be included.

A change of address can be easily submitted via PERF Online once a member has registered. Change of name requests must be submitted only in writing and accompanied by the appropriate legal documentation such as a court order, divorce decree, or marriage license.

Life Events

Divorce

Indiana law prevents assigning PERF fund benefits. Accordingly, INPRS cannot honor any divorce decree which requires it to pay anyone other than you or your named beneficiary.

In order to be consistent with the laws governing the PERF fund, and in order to satisfy Indiana’s domestic relations laws, divorce decrees should order you (or your legal beneficiary) to make payments to an ex-spouse rather than ordering INPRS to make such payments. In addition, Indiana law prohibits INPRS from garnishing your benefit for child support payments.

Qualified Domestic Relations Orders (QDRO’s)

Under state law, benefits in the ASA Only plan are exempt from any legal process. QDRO’s do not apply to INPRS. Even though they are the product of federal legislation, which normally supersedes state law, they do not apply to INPRS since it is a governmental plan exempt from the QDRO requirements.

Holds on member accounts

Indiana law allows various holds to be placed on a member’s account due to such things as tax levy or embezzlement. These holds affect if, and when, a member can take a distribution. For more information, contact INPRS.

Vested Status/Credit for Years of Participation

Vested status in the plan is based on full years of participation. You are always 100 percent vested in the fixed 3 percent and any rollover contributions you make. However, vesting in the value of variable rate contributions (employer share) varies by length of participation.

Vesting schedule is as follows:

One year of participation = 20 percent
Two years of participation = 40 percent|
Three years of participation = 60 percent
Four years of participation = 80 percent
Five years of participation = 100 percent

Only full years of participation count toward vesting in the variable rate (employer share) portion. For example, if you work four years and 10 months you would receive 80 percent of the variable rate (employer share) portion. One-hundred percent vesting occurs at termination for normal retirement (age 62 + five years of service) and death of a member in the line of duty.

You do not have to work for the same employer and job in order to reach vested status. A total of five years in any combination of ASA Only covered employment for which an employer makes contributions qualifies as years of participation for vesting purposes.

You become 100 percent vested in the variable rate contributions (employer share) and earnings of the ASA Only plan after five full years of participation.

In addition, you may be entitled to receive credit during military service and certain types of leave.

Section Two: Receiving Benefits Before Retiring