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Indiana Public Retirement System

Indiana Public Retirement System (INPRS) > My Fund > Police and Firefighters > Police and Firefighters Member Handbook: Retirement Benefits Police and Firefighters Member Handbook: Retirement Benefits

All benefits are funded by the employer-financed contributions and the employee required contributions. In general, there are three types of benefits paid to the Fund:

  1. retirement benefits,
  2. survivor benefits, (See the Survivor Benefits section of the 1977 Fund handbook for more information) and
  3. disability benefits (See the 1977 Fund Disability Benefits section of the member handbook for more information).

Unreduced Retirement Benefits

Eligibility

You qualify for an unreduced retirement benefit if you:

  • have at least 20 years of service credit in the Fund,
  • are at least age 52, and
  • have retired from service and ended employment.

Amount

If you qualify for an unreduced benefit, you will receive a monthly payment that equals at least 50 percent of the base salary (first-class salary) the year you retire.

If you earn more than 20 years of service, you will receive another 1 percent of the base salary for each six months of active service over 20 years. The most you can receive is 12 years (or a maximum 24 percent of the base salary).

For example: If you retire with exactly 20 years of service, your benefit at retirement will be 50 percent of the base salary for your department. If you retire with 30 years of service, your benefit will be 70 percent of the base salary (1 percent every six months for an additional 10 years equals 20 percent). When you earn 32 years of service or more, your benefit at retirement will be 74 percent of the base salary of your department.

Re-employment after Retirement

You may return to work with your previous employer after you have ended employment. If your new position is not covered by the Fund, you may continue to receive your benefit when you return to work. There is no minimum period of separation before you can be hired into a PERF-covered position if you are age 55 or older. If you are younger than 55, you must separate from service for 30 days before returning to work.

Benefit Overpayment and Underpayment

INPRS is required by federal and state law to correct any errors in benefit calculations. If you receive an overpayment as a result of an error, INPRS must recover the overpayment. If you are underpaid, you will receive another payment from INPRS.

Deferred Retirement Option Plan (DROP)

The Indiana General Assembly created a new benefit option for Fund members who qualify. A Deferred Retirement Option Plan (DROP) is an optional benefit. If you qualify for an unreduced retirement benefit, DROP allows you to continue to work. You will earn a salary while earning a DROP benefit. The DROP benefit may be paid in a lump sum or three yearly payments.

As a DROP member, you must:

  • continue to contribute to the plan until you reach 32 years of service or end service, whichever comes first,
  • make a binding decision to retire on your DROP retirement date, and
  • choose a DROP retirement date between 12 months and 36 months after you enter DROP.

When you enter DROP, a “DROP frozen benefit” will be calculated. The frozen benefit equals your monthly retirement benefit. Your DROP benefit is based on your earned service and base salary as of the date you enter DROP.

When you retire from DROP, you qualify to receive a lump sum that equals your DROP frozen benefit times the number of months you were in DROP. You may receive your benefit in one of two ways:

  • three yearly payments, or
  • a lump sum.

You will receive a monthly benefit that equals your DROP frozen benefit. You will not earn service credit while you are in DROP. If there are cost of living adjustments, they will not apply to your frozen benefit while you are in DROP. Cost of living adjustments will be applied to your frozen benefit the year after you retire.

You can retire and receive reduced benefits as early as age 50. You must have at least 20 years of service. Your decision to receive a DROP benefit is important. You should speak with a trusted financial advisor before making a final decision.

Overview of Retirement Options

Type of Retirement

Age and Service Requirements*

Benefit Calculation

Unreduced

You must have at least 20 years of service and be at least age 52.

Your pension will equal 50 percent of base salary + 1 percent for each six months of service over 20 years. The max. benefit is 74 percent of base salary if you have 32 years or more of service.

DROP

If you qualify, you may choose to retire under the terms of DROP.

You will receive a lump sum or 3 yearly payments = your DROP frozen benefit x no. of months you are in DROP + your monthly pension.

Early

You must have at least 20 years of service and be at least age 50.

You will receive a reduced benefit for each month prior to age 52.

*You will not receive credit for earned and unused sick leave even if you received pay for the leave.

Early Retirement Benefits

If you have 20 years of service, you may retire at age 50. You will receive a reduced benefit. The reduction factor is 14 percent at age 50.

For example: If you retire at age 50, you will receive 86 percent of the pension you would have received at age 52. Your years of service and base salary at retirement are used to calculate the percentage. On a monthly basis, the reduction factor decreases regularly from age 50 to age 52. At age 51, the pension reduction factor is 7 percent. If you choose to retire at age 51, you will receive 93 percent of a normal pension benefit for the rest of your life plus cost of living increases.

If you choose to take early retirement, your pension benefits will remain reduced even after you reach age 52.

Cost of Living Adjustments (COLA)

Consistent with IC 36-8-8-15, every year the INPRS board decides if there has been an increase in the Consumer Price Index (CPI). If there has been an increase in the CPI, your monthly benefit will increase. The increase will begin by July 1 the year after your benefit starts. The increase will not exceed 3 percent.

Section Four: Survivor Benefits