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At its Dec. 13 meeting, INPRS board members approved a letter to the General Assembly outlining why the system will offer annuities at a market rate, through an outside provider. INPRS will continue to work toward implementing the new approach to annuitization, barring any legislative changes.
Read the letter, here.
For more information, go here.
In July, the board voted to use a market rate for annuities, effective Oct. 1, 2014. The board also opted to provide annuities in the future through an outside provider.
The decision was made to ensure the future financial stability of the plan to protect current and future pensioners as well as Hoosier taxpayers.
Previously, INPRS used a rate that was greater than the system expected to earn with its investments. The board's decision to end this practice was based solely on the need to protect the financial health of the plan for current and future retirees.
INPRS' actuaries estimate the system has taken on a potential $181 million loss for annuities already converted. They forecast an additional $343 million loss if there were no change.
Prior to retirement, members can invest their ASA funds the way they wish. At retirement, members may choose to annuitize ASA funds with INPRS or another provider, roll them over to another plan, or take the funds as a lump sum payment.
There is no requirement to annuitize ASA funds with INPRS. Half of PERF and TRF retirees do not.