You have important decisions to make when you leave PERF-covered employment. This section explains the issues you’ll need to consider if you leave a covered position.
You can withdraw your ASA balance as a distribution or rollover to another qualified retirement plan if you are no longer in a PERF-covered position.
These withdrawal amounts include:
If you still work full-time or part-time in any agency or department of your current employer you have not ended service. This applies even if your new position is not covered under PERF. If you return to work in a PERF-covered position within 30 days from the date you end service, you do not qualify for a distribution.
If you are vested and end service in a covered position for at least 30 days, you can withdraw your ASA and keep your pension benefit. If you qualify for a reduced pension benefit, and you end employment, you may withdraw your ASA without losing your pension. If you qualify for a full retirement, you may not withdraw your ASA without fully retiring.
When you withdraw your ASA, you will decide how to receive the payment. You must make a choice for the taxable portion as well as the non-taxable portion.
|Your Annuity Savings Account (ASA) will be valued the day after receipt of your application. If your application is received after 4 p.m., your ASA will be valued the next business day. It will be transferred to a Fixed Value Fund in order to minimize loss while your request is processed. However, you may transfer your monies between investment options at any time before we receive your application. You may transfer monies via phone or online.
If you defer making an ASA election at retirement, your ASA will remain invested in your pre-retirement investment choices.
Mandatory ASA contributions may have had taxes withheld. The employer-paid portion of the mandatory contributions are pre-tax and are taxable. Monies taken from your wages after taxes are deducted and post-tax contributions are not taxable. Please see Taxation on the ASA for more information.
Taxable Portion - Direct Rollover
You may choose to have all or part of the taxable portion of your ASA paid as a direct rollover into a qualified plan. Those plans include the 401(a), 403(b) or governmental 457(b) plan, or Traditional or Roth IRA. All of these plans can accept your rollover. This option delays any taxes you owe on your ASA balance, except for Roth IRAs.
If you roll over only part of the taxable amount, the part not rolled over is paid directly to you (minus the mandatory 20 percent withholding for federal income tax).
If you take a rollover distribution, you must complete the rollover within 60 days after you receive the distribution. If you do not roll over your contribution within 60 days, you may owe taxes and/or penalties unless you qualify for a waiver. Please consult your tax professional for waiver qualifications.
Taxable Portion – Paid directly to You
You may choose to have the entire taxable portion of your ASA paid directly to you. PERF must withhold the mandatory 20 percent for federal income tax.
Non-Taxable Portion – Direct Rollover
You may choose to have all or part of the non-taxable portion of your ASA paid as a direct rollover into a qualified plan. Those plans include a 403(b) plan, or Traditional or Roth IRA. If you 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 You
You may choose to have the total amount of the non-taxable portion of your ASA paid directly to you.
You will receive a 1099-R by January 31 of the year after you receive your distribution. By law, this is the latest date 1099-Rs can be mailed.
PERF will withhold 20 percent from your withdrawal of the taxable portion paid to you or to your surviving spouse. This is done whether or not the IRS imposes a 10 percent penalty.
The IRS may charge an additional 10 percent federal tax penalty on your ASA if you are not 59 1/2 at the time of your distribution.
When you leave covered employment, you can leave your ASA invested with PERF. You can continue to invest in any of the eight available options and you will continue to receive an online quarterly statement.
If you are not vested, investments are only credited with interest, gains and losses for 10 years. After 10 years, your investments will not earn any more interest, gains or losses. The exception to this 10-year rule is if you leave PERF-covered employment but stay with the same employer. In this case, interest, gains and losses will be credited on funds for up to 45 years.
Your ASA balance is available for withdrawal when you end service with your employer. Your withdrawal options include:
If your balance is less than $1,000, state law allows PERF to automatically distribute the ASA balance to you if it is not requested.
In the event of your death, PERF must be notified so that your beneficiaries receive prompt payments. PERF needs a copy of your death certificate to make any distributions of available ASA balances or survivor benefits. Employers may inform PERF of your death, but the death certificate is still required. Employers do not always provide a member’s death notification.
INPRS will distribute the ASA to the beneficiary or beneficiaries on file. The named beneficiary’s right to a benefit vests upon your death. A change of beneficiary designation must be on file with PERF before death. A change received after your death is invalid.
If you name more than one primary beneficiary, and one of them precedes you in death, the benefits formula for the survivors may change. If you don’t file a new beneficiary designation form, the remaining primary beneficiaries will receive a portion of the deceased primary beneficiary’s share based upon the remaining primary beneficiaries’ percentages.
|John lists three beneficiaries and the percentages he wants them to receive:
Ann – 60 percent; Bob – 30 percent; and Carl – 10 percent
Ann dies before John. John forgets to complete a new beneficiary form. He dies with $10,000 in his ASA account. Because Ann is deceased, Bob and Carl will now split the $10,000.
John’s choice to divide a deceased member’s portion – either prorated or equally – decides 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 gets three times the amount or 75 percent ($7,500).
Carl gets 25 percent ($2,500).
If John chose equally:
Bob gets his 30 percent ($3,000) plus half of Ann’s ($3,000) or $6,000.
Carl gets his 10 percent ($1,000) plus the other half of Ann’s ($3,000) or $4,000.
If you call to report a member’s death, please provide your contact information. We may need to reach you at a later time. You can also report a death by sending the death certificate to PERF by mail or fax. Please provide your contact information.
The Indiana Legislature created a PERF survivor benefit for the survivors of PERF members. If you die while in service, your surviving spouse or surviving dependent(s) may be entitled to survivor benefits if you have:
If you qualify for benefits, but pass away while out of service and before applying for them, your surviving spouse is entitled to survivor benefits. Survivor benefits are reduced by any disability benefits paid to you.
If you do not have a qualified surviving spouse, your survivor benefit is divided between all surviving dependents younger than 18 (or older if the dependent[s] is permanently disabled).
If you do not have a qualified surviving spouse or surviving dependents, then no survivor benefit will be paid.
This benefit is separate and distinct from any benefit created by your ASA.
If you fail to notify PERF of beneficiary changes, it may mean payment will be made to someone who is no longer your choice to receive your ASA balance. You can log in to your online account to make changes.
Notice: PERF CANNOT process your disability application without a copy of your Social Security award letter with the onset date.
The disability must qualify for Social Security disability and you must provide proof of that to PERF. Be sure to attach a copy of the application sent to the Social Security Administration.
Notice: To qualify for a disability retirement benefit from PERF, the onset date of the Social Security disability must have happened while you were:
You must also have at least 5 years of creditable service.
At least once a year until you reach age 65, PERF must confirm that you still qualify for Social Security disability benefits. Your disability benefits are suspended if you don’t confirm you still qualify. If you no longer qualify for Social Security disability benefits, you no longer qualify for PERF disability benefits. Any PERF benefits paid after you no longer qualify must be repaid by law.
Disability retirement calculations for the monthly pension, ASA and RSA are the same as regular retirements. The differences between the two are:
Your disability benefits transfer to a regular retirement benefit when you become age and service qualified. When your benefits transfer to a regular retirement, the annual disability confirmation will no longer be required.
You may request a lump sum withdrawal of your ASA while you wait for a disability determination from the Social Security Administration. You will not lose your service credit as long as you have ended service with your PERF or TRF-covered employer. This provides income for you while you are unemployed and awaiting a decision.
This also allows you to file for disability retirement when you qualify, even if you didn’t have your disability determination request filed with INPRS when you withdrew your ASA. The amendment means you must show that your determination request was in place when you withdrew your ASA. It is no longer necessary for you to have it on file with INPRS when requesting a withdrawal of your ASA.
Payments are made using direct deposit. On the same day each month, your payment will be deposited directly into the account you choose. You will receive a yearly notice of deposits. Your money cannot be lost or stolen. There are no delays due to mishandled mail or incorrect addresses. Please contact PERF at (888) 286-3544 to request a form be mailed to you, or download it here.