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 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 Percentage of Pension 50 44% 59 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 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 TRF Final Average Salary-20 highest quarters in groups of 4 consecutive quarters over your entire PERF career 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 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 Prior to 7/1/08 waiting period to return to a PERF covered position was 90 days More than 30 days is calendar days – first day is the day after the retirement date. Example: If member retires on June 1st they should begin counting “more than 30 days” beginning June 2nd. A new state law reflects existing federal law which requires members to have a bona fide separation of service in order to be entitled to a benefit from a tax qualified pension plan such as PERF.  The Indiana law prohibits retirements in which a member has a formal or informal agreement with an employer to become reemployed in a position after retirement. It does not impact retirees who happen to return to work more than 30 days after retirement, but did not have a previous agreement with their employer to do so. 4. There cannot be an employer/employee relationship.

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 Deferral of Payment Annuitization Lump Sum Distribution 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   (PERF) 7.5% (Pre 10/1/14) (TRF) 7.5% (Pre 10/1/14) (PERF & TRF) 5.75% (10/1/14) Annuitized Amount Monthly $ 10,000 $91.92 $82.30 $72.01 $ 20,000 $183.84 $164.60 $144.03 $ 30,000 $275.76 $246.90 $216.04 $ 40,000 $367.68 $329.19 $288.06 $ 50,000 $459.60 $411.49 $360.07 $ 60,000 $551.52 $493.79 $432.09 $ 70,000 $643.44 $576.09 $504.10 $ 80,000 $735.36 $658.39 $576.12 $ 90,000 $827.28 $740.69 $648.13 $ 100,000 $919.20 $822.98 $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   % of Annuitized Funds Paid Out Each Year Prior to 10/1/14 10/1/14 - 9/30/15 Age PERF TRF PERF & TRF 55 9.3% 8.6% 7.2% 60 10.0% 9.1% 7.8% 65 11.0% 70 12.3% 9.8% 75 14.0% 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 Submission Deadline October November December January February March April May June July August September 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

INPRS Contact Information Website: www.inprs.in.gov e-mail: questions@inprs.in.gov Phone: PERF 1-888-526-1687 TRF 1-888-286-3544 Mailing address: INPRS 1 North Capitol, Suite 001 Indianapolis, IN 46204