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Indiana Public Retirement System

Indiana Public Retirement System (INPRS) > My Fund > Public Employees > PERF ASA Only Plan Member Handbook: Receiving Benefits Before Retiring PERF ASA Only Plan Member Handbook: Receiving Benefits Before Retiring

Terminated/Inactive Members

If you take a distribution of your ASA Only account when you leave employment, the non-vested portion of your variable rate (employer share) account will be forfeited. Prior service will be reinstated to your account if you return to ASA Only-covered employment. Forfeitures of non-vested monies are not reinstated to your account even if you return to ASA Only-covered employment.

You are considered inactive if you are no longer working in an ASA Only-covered position. You are considered suspended if you are inactive, your account has not received contributions for 20 years or more and you are at least 63 years of age. We will verify your address in order to make a distribution to you from your account. If you or your beneficiary are not located, the money in your account shall be credited to INPRS until you or your beneficiary claims the money. There will be no further interest credits or earnings after the money is transferred to INPRS.

Leaving ASA Only-covered employment requires you to make important decisions regarding your retirement savings. This section explains the issues you will need to consider if you leave a covered position and separate from service.

Withdrawing your Annuity Savings Account (ASA)

You may withdraw the balance of your account (in the form of a distribution or rollover to another qualified retirement plan) if you are no longer in an ASA Only-covered position. A 30-day separation period is required.

These withdrawal amounts consist of:

  • The 3 percent annual fixed contributions;
  • Rollovers; and
  • All interest and earnings credited to your account.
  • Vested percent of variable contribution (employer share)

Payment Options

When you apply for an ASA distribution, you must choose how to receive the payment. You must select one payment option for the taxable portion and one payment option for the non-taxable portion.

Members who elect to withdraw their ASAs at retirement will remain invested according to their pre-retirement investment allocations until their ASA is paid out at the time INPRS processes their retirement.

The tax status of your mandatory ASA contributions depends on whether or not taxes were withheld on them before the contributions were made to PERF. The employer-paid portion of the mandatory contributions are before-tax. Portions deducted from a member’s wages after taxes are deducted after-tax.

Members may elect a distribution at any time. Distribution requests may be made via the Web or by calling INPRS’ customer service center at (888) 526-1687. Requests received before 4 p.m. EST will be processed the same day. Checks will be issued and mailed within three to five business days.

Taxable Portion - Direct Rollover
You may elect to have all or part of the taxable portion of your ASA paid in the form of a direct rollover into an eligible 401(a), 403(b) or governmental 457(b) plan, or Traditional or Roth IRA, which has provisions allowing it to accept the rollover on your behalf.

Except in the case of a Roth IRA, this option defers any taxes you owe on your ASA balance.

If you choose to roll over only part of the taxable amount, the portion not rolled over is paid directly to you (less the mandatory 20 percent withholding for federal income tax).

Taxable Portion - Paid Directly to the Member
You may elect to have the total amount of the taxable portion of your ASA (less the mandatory 20 percent withholding for federal income tax) paid directly to you.

Non-Taxable Portion - Direct Rollover
You may elect to have all or part of the non-taxable portion of your ASA paid to up to two financial institutions in the form of a direct rollover into an eligible qualified plan, 403(b) plan, or Traditional or Roth IRA, which has provisions allowing it to accept the rollover on your behalf. If you choose to roll over only part of the non-taxable amount, the portion not rolled over is paid directly to you.

Non-Taxable Portion - Paid Directly to the Member
You may elect to have the total amount of the non-taxable portion of your ASA paid directly to you.

You will receive a 1099-R postmarked by January 31 of the year after you receive your distribution. By law, this is the latest date 1099-Rs can be mailed.

INPRS will withhold 20 percent from your distribution of the before-tax portion paid to you or to your surviving spouse. Adjustments may be made for payments made to survivors under special circumstances. State taxes will be withheld if required by the state.

If you choose to take a rollover distribution and do not complete the rollover by the 60th day following the day on which you receive the distribution, your distribution may be subject to taxes and/or penalties unless you qualify for a waiver. Please consult your tax professional for waiver qualifications.

Tax Penalty – Early Withdrawal of ASA
You may be subject to an additional 10 percent federal tax penalty on your ASA if you have not reached the age of 59 1/2 at the time of your distribution.

Death of a Member

When a member dies, INPRS must be notified in order to make payments to the appropriate beneficiaries in a timely manner. INPRS needs a copy of the death certificate in order to process any distributions of ASA Only balances to beneficiaries or survivors that might be available. Employers may inform INPRS of a member’s death; however, the death certificate is still required. Employers do not always provide member death notification.

The ASA Only payment will be distributed to the beneficiary or beneficiaries on file at the time of death.

If you list more than one primary beneficiary and one or more of them die before you, the remaining primary beneficiaries will receive amounts proportionate to the deceased beneficiary’s share upon your death.

John lists three beneficiaries and the percentages he wants them to receive:

Ann – 60 percent
Bob – 30 percent
Carl – 10 percent

Ann dies before John.
John forgets to fill out a new beneficiary form and dies with $10,000 in his ASA account.
Because Ann is deceased, Bob and Carl will now split the $10,000 only two ways.

How John chose to divide a deceased member’s portion – either prorated or equally – will determine surviving beneficiary amounts for Bob and Carl.

If John chose prorated:
Bob’s original percentage was 30 percent. Carl’s was 10 percent. That is a 3 to 1 ratio.
Bob will receive three times the amount or 75 percent ($7,500).
Carl will receive 25 percent ($2,500).

If John chose equally:
Bob will get his 30 percent ($3,000) plus half of Ann’s ($3,000) or $6,000.
Carl will get his 10 percent ($1,000) plus the other half of Ann’s ($3,000) or $4,000.

To prevent this, make sure you review and update your beneficiary choices regularly.

If you call with information about a member’s death, please leave your name, relationship to the member, and telephone number, as we may need to contact you for further information. A death can also be reported by simply sending the death certificate to INPRS by mail or fax.

Beneficiary or Survivor Benefits

If you die while in service, but not in the line of duty, or after terminating employment but before withdrawing your account balance, the account will be paid to the listed beneficiary(ies). The beneficiary(ies) will receive your ASA balance which includes the fixed 3 percent contributions, any rollover savings account contributions and the vested portion of the variable rate contributions (employer share). The beneficiary may elect to have the account paid as a:

  • lump sum
  • direct rollover to another eligible retirement plan or
  • an annuity if the account balance is at least $15,000 and the beneficiary or spouse is at least 62 years old.

If you do not list any beneficiary(ies), or if the beneficiary(ies) don’t survive you, the account will be paid to your surviving spouse, dependents or estate. The beneficiary or survivor may elect to have your account paid as a lump sum, a direct rollover to another eligible retirement plan, or as a monthly annuity.

If you die in the line of duty, your listed beneficiary(ies) will receive your entire account balance which includes: fixed 3 percent contributions, any rollover savings account contributions, and the entire balance of the variable rate contributions (employer share). The beneficiary or survivor may elect to have the account paid as a lump sum, a direct rollover to another eligible retirement plan, or as a monthly annuity if the account balance is at least $15,000 and the beneficiary or spouse is at least 62 years old.

If you die in the line of duty while in service but are not fully vested in the variable rate contributions (employer share), the account is deemed fully vested. That means the beneficiary or survivor will receive 100 percent of all amounts in your account.

If you meet the conditions listed above and you have been married for at least two years before your death, then your spouse qualifies for a survivor benefit. If there is no eligible surviving spouse, your survivor benefit is divided between all surviving dependents who are younger than 18 (or older if the dependent[s] is permanently disabled). If you have neither an eligible surviving spouse nor surviving dependents, then no survivor benefit will be paid.

Beneficiary payments or surviving spouse

The beneficiary of a deceased member will receive a lump sum payout of the account. Spousal beneficiaries may annuitize the ASA. The member’s ASA balance must be at least $15,000 including rollovers in order to annuitize the ASA and be paid the Rollover Savings Account (RSA) balance. A beneficiary may elect to have the withdrawal paid in a lump sum, direct rollover to an eligible retirement plan or as a monthly annuity on or after the beneficiary or survivor attains 62 years of age.

Separate elections for ASA and RSA balances may be made. A survivor may receive a lump sum payment for the RSA and annuitize the ASA.

Failure to inform PERF of beneficiary changes could result in payment being made to a previously named beneficiary who is no longer your choice to receive your ASA Only balance upon your death. The Application for Change of Beneficiary is available on the PERF member forms page here. For beneficiary changes, please complete the form and mail or fax to INPRS, or make the change via PERF Online.

Disability Benefits

There is no minimum amount of service required to receive disability benefits from INPRS. If you become disabled, you can withdraw the 3 percent fixed contributions paid by the state of Indiana. You continue to accrue service credit even though you are on disability but not separated from service.

For example, you work for eight months, become disabled and receive disability for four years. After that time, you are no longer considered disabled. If you do not return to work for your employer, you can withdraw 80 percent of the employer contributions because you had eight months of service credit and accrued four years of service while on disability.

If you become disabled, INPRS will provide disability benefits to you if:

  • You are determined by the Social Security Administration (SSA) to be disabled, and are receiving salary or employer-provided income protection benefits, or are on leave under the FMLA as of the onset date established by the SSA.
  • Timing of the disability onset date as established by the SSA before termination of the employer/employee relationship is critical. Please contact INPRS if you have any questions about establishing eligibility for disability benefits.

NOTICE: INPRS CANNOT process your disability application without a copy of your Social Security award letter with the onset date.

To the extent that the member is vested, the member may elect to have a withdrawal paid as a lump sum, a direct rollover to an eligible retirement plan or as a monthly annuity if the account balance is at least $15,000.

Disability Withdrawals

You may request a distribution online or speak to a Customer Service Representative if you have met the Social Security disability requirement.

Members who are disabled or members with a rollover account balance are eligible for withdrawals:

  • Disability withdrawal – paid in a lump sum, a direct rollover to another eligible plan or as a monthly annuity
  • Rollover distribution – paid in a lump sum, a direct rollover, or a monthly annuity at normal retirement age (age 62 + five years of service)

All voluntary distributions for disability and rollover withdrawals require 100 percent of the available amount to be withdrawn.

If you meet age, service and minimum balance requirements, you must submit your elections using the PERF Retirement Application. You can access the retirement application by downloading it here or by calling INPRS at (888) 526-1687.

Disability withdrawals require 100 percent of the available amount to be withdrawn.

Section Three: Retiring from PERF