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Membership in PERF means you are working toward earning a retirement income. You and your employer may share in paying for this benefit. However, this depends upon how your employer participates in PERF. A PERF benefit has two parts:
Your pension benefit is paid as a lifetime monthly benefit. Your employer funds this at no cost to you, and it is an employer asset. When you apply for a retirement benefit, your employer account will fund those retirement benefits. If you leave a PERF-covered position before you qualify for a retirement benefit, you cannot withdraw these funds. This is a relationship between PERF and employers, you will not be asked to make decisions about the management of pension benefit money.
The second part of the PERF benefit is the Annuity Savings Account (ASA). It supplements your pension benefit at retirement. It is an important way to boost your retirement savings. If you leave covered employment before you qualify for a retirement benefit, you may withdraw your ASA.
The ASA has two types of contributions – mandatory and voluntary. The mandatory part can be paid by the employer, the employee, or shared by both. The voluntary part is optional and available to you if you work for an employer who participates in the voluntary contributions program.
State law requires that 3 percent of your gross wages (regular and overtime pay) must be contributed to fund your ASA.
If you work for the State, a quasi-governmental agency, or a university, the 3 percent is paid by your employer before taxes are calculated on your wages.
For all other employers, the 3 percent may be deducted from your paycheck, or paid by your employer. The employer makes this choice, and may change it at any time.
Whether paid by you or your employer, the mandatory contribution benefits each member of the fund. It is sent to PERF and deposited in your ASA.
Not vested and vested for the purpose of determining non-taxable recovery is defined in the Important Terms section of this document.
If you are not vested when you withdraw your ASA, the non-taxable benefit is paid to you in a lump sum or in some cases, you can roll over the non-taxable amount. If you are vested at withdrawal, IRS regulations require that part of your non-taxable benefit must be recovered over the life of the pension. Part of each monthly pension payment will be non-taxable until your entire post-tax contribution amount is recovered. Additional information can be found in the Taxation on the ASA section in this document.
|You are vested in the ASA immediately and contributions are credited to your individual account. You can only withdraw money from your ASA when you end PERF-covered employment or at retirement. If you are re-employed in a PERF- or TRF-covered position within 30 days from when you ended service, you will not qualify for a distribution. You do not qualify for a distribution from PERF if you are an active member in TRF or vice-versa. If you are no longer in a PERF- or TRF-covered position but still work with the same employer, you cannot take a withdrawal until you end service with your employer. Part-time employment does not count as ending service. YOU CANNOT TAKE A LOAN AGAINST YOUR ASA. You must end service in order to withdraw your funds.|
Voluntary contributions to the ASA are made through a payroll deduction with your employer. You may make additional contributions to your ASA if your employer allows a payroll deduction. The employer can make this decision at any time, and may also stop at any time. The maximum for all types of voluntary contributions is 10 percent of your gross wages in addition to the 3 percent mandatory contribution.
Post-Tax Voluntary Contributions
When you make after-tax voluntary contributions, federal, state and Social Security taxes are withheld. Your take home pay will be reduced by the total amount contributed. Since these funds have already been taxed, they are non-taxable. Please note that any income or interest earned on these funds is still taxable.
If you are not vested at the time of distribution, the non-taxable benefit is paid to you in a lump sum or in some cases, you can roll over the non-taxable amount. If you are vested at the time of distribution, IRS regulations require that part of your non-taxable benefit must be recovered over the life of the pension.
Part of each monthly pension payment will be non-taxable until your entire post-tax contribution amount has been recovered.
In order for you to make after-tax voluntary contributions, your employer must agree to deduct the amount requested (up to 10 percent). That money is sent to PERF. You can stop making post-tax contributions or change the amount deducted at any time.
Pre-Tax Voluntary Contributions
The IRS allows PERF to accept voluntary contributions on a pre-tax basis.
Carefully consider all the conditions and impacts of pre-tax contributions. Your ability to make changes later is severely restricted.
The conditions that apply to pre-tax contributions include:
More details on this option are available here.
PERF allows you to manage your retirement benefits with self-directed investment options for your ASA. You may decide how to invest the mandatory and voluntary contributions in your ASA in one or more of the eight funds available through PERF:
You may select from these options for the first time when you enroll in PERF. You can also log in to your online member account to make your investment choices. If you don’t have a computer, call (888) 286-3544 Monday through Friday from 8 a.m. to 8 p.m. EST, to speak to a customer service representative.
If you don’t make these choices, all ASA contributions will automatically be invested in a target date fund based on the year you will turn 65.
You can view daily valuations of your ASA account and make daily changes to your investment choices. The valuation of your ASA account includes a deduction of investment costs.
You may invest your ASA account (present balance and future contributions) in any or all of the investments in at least one percent amounts. You may also invest your balance and new contributions separately. This means you can direct both current and future money, or direct future contributions only. Our investment options have grown as the INPRS Board of Trustees adds new investment choices to the PERF portfolio.
Quarterly member statements are now electronic. Log on to your online account to see your quarterly statement with your account balance and earnings.
If you want a paper statement mailed to your home, log on to your online account. Select the Personal Information tab, Communications, E-mail Address, and then Communications Preferences. Or, you can download the Annuity Savings Account (ASA) Quarterly Member Statement Opt-In form here.
Your statements are available as long as you have money in your ASA. This is true even if you no longer work in a PERF-covered position.
The quarterly statement shows your contributions and any change in value to your holdings. For most PERF members, the employer pays the 3 percent mandatory contributions as pre-tax contributions. When the employer does not make the contribution, you pay the contribution post-tax. The 3 percent is taxed as income and then placed in the ASA. The earnings on the contributions are not taxed until they are withdrawn. This is also true for voluntary pre- and post-tax contributions. Taxes are due when you receive a retirement benefit or take an ASA withdrawal. Many members believe that the amount shown on the quarterly statement is the entire benefit they would receive at retirement. You should remember the largest piece of retirement income will come from your pension, which isn’t shown on the quarterly statement.
To calculate your own benefit estimate, go here. Please remember this is only an estimate of your benefit amount.
To roll funds in to PERF from another qualified plan, you must be currently employed in a PERF-covered position. The only exception is if you roll over funds at the time of your retirement.
Funds from any of the following may be combined with your PERF funds:
These RSA funds can be invested in any of the current investment options except for the Guaranteed Fund. They can be withdrawn at any time before retirement. At retirement, these funds may be combined with your pension and ASA as part of your total benefit.
Your employer chose to join PERF. Your employer also decided which positions would be covered under the PERF plan. You qualify for PERF when you begin working in a position your employer covers with PERF benefits.
A position is PERF-covered, making you qualified for membership, when it is:
There are some statutory exclusions for membership in the fund. []
|*After retirement, Social Security is the largest source of income for most elderly Americans. More information on Social Security benefits is available online here.|
After your employer enrolls you in the fund, PERF opens an ASA in your name and you become a member. Once PERF receives contributions, you’ll receive a welcome packet with your membership information. The packet has instructions for you to register for an online account. A passcode will be mailed to you. Once you’ve registered, you can name beneficiaries, update your address, and make investment elections for your ASA. If you don’t make investment elections, your contributions default to a target date fund based on your estimated year of retirement.
You immediately begin saving for your retirement when you become a PERF member. After enrollment, you can name a beneficiary to receive the money still in your ASA after you pass away. You may name one or more people, a trust, estate, or other legal entity, such as a charity. If you name more than one primary or contingent beneficiary for your ASA, you must choose a percentage for each beneficiary. If no beneficiary is named, any assets would pass to your estate.
As long as you have money with PERF, it is critical that you keep any changes to your address or beneficiaries updated. You can update this information by logging in to your online account. Changing your information with your employer will not update that information with PERF. You need to contact PERF separately to update your personal information.
Beneficiaries – You may change your ASA beneficiary any time before you retire. You can make changes on the INPRS website by using the View or Change Beneficiary function.
Reporting any change of beneficiary is VERY IMPORTANT. Failure to make changes may mean payment is made to someone who is no longer your choice to receive your ASA balance.
Address/Name – The address on file at PERF is the only contact information we have for you. If you leave PERF-covered employment, you may qualify to withdraw your ASA. You must report any change of address to PERF including the following:
|Register for your online account to make changes to your account information quickly and easily.|
You can change your name by completing the Member Data Change form. Requests can only be submitted in writing with the required legal documentation such as a court order, divorce decree, or marriage license.
Normally, you cannot change your payment option or survivors after you retire. You can make changes if you get divorced after you retire. The divorce decree must permit the change.
Your pension benefit from PERF is protected. Your monthly pension benefit is exempt from seizure, levy, attachment, and other processes. []
The only exceptions to this rule are:
NOTE: PERF is a governmental plan. It is exempt from the provisions of the Employee Retirement Income Security Act (ERISA). Therefore, INPRS does not recognize Qualified Domestic Relations Orders (QDROs) as described in ERISA.
You are vested in PERF when you have at least 10 years of creditable service in a PERF-covered position. You will be entitled to receive full pension benefits when you meet these age and service requirements:
You don’t have to work for the same employer and the jobs don’t have to be for 10 consecutive years in order to reach vested status. A total of 10 years in any combination of PERF- or TRF-covered positions counts as creditable service for vesting.
You become vested in the ASA immediately.
|Vesting for Specified Elected Officials – By law, county officials named in the Indiana Constitution and limited by law to two four-year terms in office will vest when their second term in office ends.|
Service credit is earned in monthly increments. One month of service credit will be awarded for each month that you work at least one day and contributions are made.
You receive service credit for each period of continuous employment in a covered position. You may also be entitled to service credit during military service and certain types of leave.
A school corporation employee who works the full school term or contract period receives credit for one year of service. Otherwise, service credit for school corporation employees is granted for actual time worked.
If you have past service as an employee of the state or participating political subdivision in a position not covered by the retirement fund, you may receive credit for this service. You must have worked before Jan. 1, 1985 in PERF or TRF and the position became covered prior to Jan. 1, 1985. You will need to submit proof of this service to INPRS.
If you have past service in a position not covered by the retirement fund, you may receive credit for this service if the position was covered after Dec. 31, 1984 by PERF or TRF and you were employed in the position prior to Jan. 1, 1985. You would need to remain in that position or another position with the same employer at least until the position became covered. You will need to submit proof of this service to INPRS. For more information, see IC 5-10.2-3-1.
If you have service credit in both PERF and TRF, you will need to choose the fund you will retire from. You receive a single, combined benefit from the fund you choose to retire from. Your pension will be calculated based on your combined creditable service from the two funds. If you have overlapping service, you cannot receive service credit in both plans at the same time.
For example: Tom serves as a school teacher during the day in a TRF-covered position. He drives a snow plow at night in a PERF-covered position. Tom has accounts with both TRF and PERF. Even though he is a member of both funds, at retirement his service is merged so that he only gets one day of service credit for the concurrent service in PERF and TRF.
If you serve in a position covered by another governmental plan, you cannot participate in PERF while you are serving in the other position.
For example: Lindsay is a firefighter in a 77 Fund-covered position for Carmel. She’s also a council member for Fishers. Because of her membership in the 77 Fund, she is excluded from membership in PERF.
If you retire from or leave another government plan, and then work in a PERF-covered position, you can participate in PERF.
If you served in the U.S. Armed Services, you qualify for PERF service credit that equals your actual military service. The following conditions apply. You:
You may also qualify for service credit if the federal Uniformed Services Employment and Re-employment Rights Act (USERRA) covers your military service. The following conditions for USERRA apply. You:
The Heroes Earning Assistance and Relief Tax Act of 2008 (HEART) provides a survivor benefit for a member who dies while performing qualified military service.
You must be a PERF member working in a covered position to purchase service.
You may buy more service credit if you worked in a similar position(s) in another state, for a quasi-state agency before it was PERF-covered or have prior military service. You may also buy service if you are vested in PERF and/or TRF. All service is purchased in one month increments. The cost of additional service is calculated based on your age, years of service, and salary. Minimum service requirements may apply. If you end service and withdraw your ASA before vesting, the cost of the additional service plus interest will be returned to you. If you end service and re-employ in a PERF- or TRF-covered position later, you can buy the service again at the updated cost. Download this form here.
Once vested, you can buy an additional one year of service credit for every five years of actual earned service. For example, if you have 15 years of service, you could buy an additional three years of credit. Your retirement benefit would be calculated using a total of 18 years. This service cost depends upon your age, years of service, and salary. You can pay for the service in a lump sum or annual payments over five years. Download this form here.
You can buy out-of-state service credit with PERF if you:
Download this form here.
If you are an active PERF member who was honorably discharged from the U.S. Armed Forces, you may buy up to two years of military service credit at actuarial cost. This is added to any other military service credit that is granted by law. Download this form here.
You can buy service after you have been in the fund for one year. To determine the cost of buying this military service, call PERF at (888) 286-3544. Or, register for your online account and use the service credit purchase calculator.
If you purchase service, it cannot be used for vesting. You need 10 years of actual PERF-covered service to qualify to retire and receive a pension benefit. The additional service you buy will be used in calculating your retirement benefit. []
Few employees stay with the same employer their entire career. Even if you do, situations may force you to take time away from your job. You may take certain types of leave from a covered position and still earn or keep service credit. A leave of absence does not qualify as ending service.
You can speak with your employer about any leave and ask them to contact PERF. Or, you can check with PERF to find out how your leave will affect your creditable service and eligibility.
You may be entitled to service credit for unpaid leaves of absence of six months or less during any four consecutive years. For more information, contact your employer or call our toll-free number at (888) 286-3544.
You may also receive credit for up to 12 weeks of leave taken during a calendar year under the Family Medical Leave Act. Authorized unpaid leave in excess of six months over a 4-year period will not be used in the benefit calculation. It may be used for vesting purposes.
You can receive up to one year of service credit for Adoption Leave.
During a paid leave of absence, employer and employee contributions will be made and creditable service will be granted.