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Earning more money on employer contributions now may help lower your employer contribution rate in the future.
In order to do this, all you have to do is submit your contributions on time. The longer INPRS has to invest the employer contributions, the greater the opportunity to earn more interest. The result is less required contributions. Late submissions cost employers more money. Why? Because it lessens the time we have to invest and earn interest on those contributions.
When you report on time, members' money is deposited sooner into their Annuity Savings Accounts (ASAs). This allows them more time to invest, earn interest, and better prepare for retirement.
Employer contribution rates are reviewed annually by the INPRS Board of Trustees. Rates are based on the actuarial valuation of the prior fiscal year (July 1 through June 30).
The INPRS board is authorized to set employer contribution rates. They use the assessment of actuaries and consider liabilities, assets, and the amount needed to fund past and estimated future benefit payments, while maintaining the health of the fund.
Employers who fail to submit wages and contributions to INPRS within 30 days of the due date will have to pay for being late. (IC 5-10.3-7-12.5) Late submissions will be subject to a $100 per day penalty. If the 30th day following the due date is on a Saturday, Sunday or legal holiday, penalties will begin the next working day.
Penalties will begin being assessed on Jan. 2, 2014, for any employer who is more than 30 days late in reporting to INPRS.
In the future, INPRS will begin to charge interest on contributions that are seven days past the due date. INPRS will provide advance notice to employers when this is implemented.
You may contact the EPPA group at (888) 876-2707 or via e-mail at email@example.com with questions.
The INPRS board voted Friday, Oct. 25, to seek more information before making any new decisions regarding outsourcing annuities.
The board vote follows the Oct. 21 recommendation by the Pension Management Oversight Commission that INPRS not use an outside annuity provider. PMOC also recommended INPRS set an interest rate that will not create an unfunded liability.
Annuitizing in-house could create unfunded liabilities. INPRS' board asked staff to work with PMOC members for clarification.
For more information, go here.
Every attempt has been made to verify that the information in this publication is correct and up-to-date. Published content does not constitute legal advice. If a conflict arises between information contained in this publication and the law, the applicable law shall apply.