Retirement Workshop
(PERF & TRF)
Workshop Objectives
 To understand your retirement benefit plan.
 To understand your retirement benefit options.
The Milestones and
Your INPRS Retirement Benefit Plan
 The Milestones – PERF & TRF
Vesting
Early Retirement w/ a reduced benefit
Normal Retirement w/ a full benefit
Survivor Benefit
Disability Benefit
 Two-part Retirement Benefit Plan
 Defined Benefit (Pension)
 Defined Contribution (Annuity Savings Account)
INPRS Retirement Benefit Plan
(PERF & TRF)
 Annuity Savings Account (ASA)
 Defined Benefit (monthly pension payments)
What Are My Benefits?
(PERF & TRF)
Defined Benefit (Pension)
• Lifetime benefit - must meet eligibility
• Funded by employers
• Contributions not held in an individual account
• Formula calculation used to determine benefit
• Benefit determined by age, salary, service,
and retirement option chosen
Annuity Savings Account (ASA)
• Mandatory 3% contribution
• Always belongs to you / fully vested
• No loan or hardship withdrawals available
When Am I Eligible?
(PERF & TRF)
Normal Retirement Eligibility
1. Age 65 with 10 or more years of creditable service;
2. Age 60 with 15 or more years of creditable service;
3. Rule of 85: Minimum age 55, age plus years of service
must equal 85 or more.
For example: age 55+30 yrs= 85; or age 58+29 yrs= 87.
Early Retirement
with a Reduced Pension
A member who has 15 or more years of creditable service, and,
is between the ages of 50 and 59 can retire with a reduced pension…
Retirement Age
50
59
Percentage of Pension
44%
89%
(Percentage increases 5% per year between ages 50-59)
Please note that if you choose to take early retirement, your
pension benefits will remain at a reduced level even after you
reach 60 years of age.
Collect Your Retirement
Benefit While Continuing to Work
1. Millie Morgan: Minimum age 70 with 20 or more
years of creditable service (while working in a PERF or
TRF covered position);
2. Elected officials: Minimum age 55 with 20 or more
years of creditable service (while serving in their
elected position). If the member is younger than age
60, a reduced benefit would apply unless you meet
the Rule of 85.
Defined Benefit Formula
The monthly Pension formula is defined by state law…
(Final Average Salary x Creditable Service x 1.1%) divided by 12
Examples
($30,000 x 20 yrs x .011)/12 = $550/month (before taxes)
($30,000 x 25 yrs x .011)/12 = $688/Month (before taxes)
($35,000 x 30 yrs x .011)/12 = $963/Month (before taxes)
Final Average Salary x Creditable Service x 1.1%
PERF
Final Average Salary-20
highest quarters in
groups of 4 consecutive
quarters over your entire
PERF career
TRF
Final Average Salary-5
highest contract years
over your entire TRF
career
 Creditable Service-Continuous periods of employment
in a PERF/TRF-covered position.
 Benefit Multiplier: 1.1% (.011)
Additional Creditable Service
 Approved paid/unpaid leave
 Military service leave
 Other service (call for eligibility)
Note: Any service previously lost, in taking an ASA
distribution prior to retiring from a PERF/TRF covered
position, is automatically reinstated six months after
taking another PERF/TRF position.
Purchased Service
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Out of State Service
Must have at least one year of PERF or TRF service, and
Not eligible to claim a retirement benefit from any other retirement system or fund.
Prior Military Service
Must have at least one year of PERF or TRF service.
Must have served on active duty in military for at least 6 months and received an
honorable discharge.
Must be able to provide a DD Form 214, Certificate of Release or Discharge.
Only 2 years of service may be purchased.
Additional Service Credit
1 year for every 5 actual years
Available to vested members only.
* Must be currently employed in a PERF/TRF covered position to purchase any type of
service.
Working After Retirement
*Effective July 1, 2013
 Members can no longer start a second retirement under PERF.
*To reemploy with a PERF or TRF covered employer:
 30 day mandatory separation from retirement date is required to continue receiving
PERF or TRF retirement benefits
 No additional service credit is earned
 No contributions made to ASA
 No earnings limitation
*Member’s application for retirement benefits is void if the member has an agreement,
prior to their retirement, with a covered employer to become re-employed.
*To reemploy in the private sector:
 Employable immediately
 No earnings limitation
Retirement Benefit Options
One of the most important decisions you will make is
choosing your Defined Benefit (pension) payment option.
Remember
You will receive a monthly benefit for the rest of your life.
Before choosing an option, ask yourself the following questions:
• How much monthly income will I need after retirement?
• Do I need to plan for a beneficiary?
• If yes, how much income will my beneficiary require?
• How long will my beneficiary require this income?
Retirement Benefit Options
Limited Beneficiary Options
 5-year Certain & Life
 Straight Life
 Cash Refund + 5-year Certain & Life
Survivorship Options
 100% Survivorship
 66 2/3% Survivorship
 50% Survivorship
Additional Option
 Social Security Integration
Retirement Benefit Options
1. Deferral of Payment
2. Annuitization
3. Lump Sum Distribution
4. Rollover or Partial Rollover
Annuity Savings Account
Changes
 HEA 1075
 Oct. 1, 2014 to Sept. 30, 2015:
Annuities will be calculated with a 5.75* percent interest rate.
 Oct. 1, 2015 to Dec. 31, 2016:
Annuities will be calculated at the market rate or 4.5* percent,
whichever is greater.
 After Dec. 31, 2016:
Whenever the Board enters into an agreement with a third party
provider, the interest rate will be market rate.
* = Assumed rate of return on invested annuitized funds.
PERF/TRF Annuity Savings Account
Changes to Payment Options
Annuitized Amount
$ 10,000
$ 20,000
$ 30,000
$ 40,000
$ 50,000
$ 60,000
$ 70,000
$ 80,000
$ 90,000
$ 100,000
(PERF) 7.5%
(Pre 10/1/14)
Monthly
$91.92
$183.84
$275.76
$367.68
$459.60
$551.52
$643.44
$735.36
$827.28
$919.20
(TRF) 7.5%
(Pre 10/1/14)
Monthly
$82.30
$164.60
$246.90
$329.19
$411.49
$493.79
$576.09
$658.39
$740.69
$822.98
(PERF & TRF) 5.75%
(10/1/14)
Monthly
$72.01
$144.03
$216.04
$288.06
$360.07
$432.09
$504.10
$576.12
$648.13
$720.15
Age: 65
Option: 5 year guaranteed benefits (PERF option 10 / TRF option A-1)
This table illustrates the potential impact of annuitization changes. It is an estimate only for your general
planning purposes. Your actual monthly annuity payment may vary from the data in this table.
PERF/TRF Annuity Savings Account
Changes to Payment Options
Age
55
60
65
70
75
% of Annuitized Funds Paid Out Each Year
Prior to 10/1/14
10/1/14 - 9/30/15
PERF
TRF
PERF & TRF
9.3%
8.6%
7.2%
10.0%
9.1%
7.8%
11.0%
10.0%
8.6%
12.3%
11.0%
9.8%
14.0%
12.3%
11.4%
Option: 5 year guaranteed benefits (PERF option 10 / TRF option A-1)
This table illustrates the potential impact of annuitization changes. It is an estimate only for your general
planning purposes. Your actual monthly annuity payment may vary from the data in this table.
Tax Reporting
What’s Next?
When you are ready …
• Discuss your plans with your family.
• Consult a financial planner, tax advisor or legal expert if you have
concerns.
• Choose a retirement date that fits your goals.
• Begin collecting the documentation you’ll need to submit with
your retirement application.
• Submit your application to INPRS no later than 90 days prior to
your retirement date.
Application Submission Dates
Submit your retirement application no later than 90 days before your retirement date
Retirement Date
January 1st
February 1st
March 1st
April 1st
May 1st
June 1st
July 1st
August 1st
September 1st
October 1st
November 1st
December 1st
Submission
Deadline
October
November
December
January
February
March
April
May
June
July
August
September
INPRS Contact Information
 Website:
www.inprs.in.gov
 e-mail:
[email protected]
 Phone:
PERF 1-888-526-1687
TRF 1-888-286-3544
 Mailing address:
INPRS
1 North Capitol, Suite 001
Indianapolis, IN 46204
Download

INPRS (TRF and PERF) General Meeting Presentation