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Q. What’s the difference between the PERF Hybrid plan and the My Choice: Retirement Savings Plan?
A. The PERF Hybrid plan is a defined benefit plan with an Annuity Savings Account (ASA) component. At retirement, a member will receive a defined benefit amount for life upon separation from employment and age and service requirements. A member may elect to annuitize, roll over, take a lump sum, or defer his or her ASA. The My Choice: Retirement Savings Plan does not have a guaranteed defined benefit. At retirement, a member may elect to annuitize, roll over or take a lump sum of the balance in the account at that time. For an overview of each plan’s provisions, download a PDF copy of the PERF at a Glance and My Choice: Retirement Savings Plan at a Glance (for State of Indiana employees).
Q. I was recently hired by the state of Indiana. Do I get a choice between the Hybrid and My Choice: Retirement Savings Plan?
A. If you’re a new state of Indiana employee entering into PERF-covered employment, you will be able to choose membership in either the Hybrid or My Choice: Retirement Savings Plan.
Q. How quickly can I vest with the My Choice: Retirement Savings Plan?
A. You are always 100 percent vested in the 3 percent fixed contribution and any rollover contributions you make. Vesting in the value of variable rate contributions varies by length of participation.
You will not receive credit for partial years of service.
Q. What do I need to know about employer contributions?
A. The variable percent for employer contribution rates is set annually by the INPRS Board of Trustees. Regardless of the set annual rate, the PERF Hybrid defined benefit pension amount is an average of annual compensation based on 20 quarters, years of service and a multiplier of 1.1 percent. Effective July 1, 2016 through June 30, 2017, the My Choice: Retirement Savings Plan employer contribution rate will be 3.3 percent.
Q. Are contribution amounts covering unfunded pension liability made to the My Choice: Retirement Savings Plan accounts?
A. Contributions made by your employer include a fixed 3 percent of your salary plus a variable amount set each year.
In addition, your employer pays a percentage of payroll to fund defined benefit pension plan liabilities. This is true regardless of which PERF plan option you select. However, these funds are not paid into members’ Annuity Savings Accounts in either the My Choice: Retirement Savings Plan or Hybrid plans. And, these funds are not available for your investment direction or withdrawal.
Q. Am I allowed to make voluntary contributions?
A. You may elect to make pre- or post-tax voluntary contributions to your My Choice: Retirement Savings Plan or Hybrid plan account. The amount may not exceed 10 percent.
Q. Which plan offers a guaranteed defined benefit?
A. The PERF Hybrid plan offers a guaranteed defined lifetime monthly benefit. The ASA is available as a lump sum, a rollover to another qualified plan or can be combined with the DB for a larger monthly benefit.
Q. I have service in another plan. Does that count toward my retirement?
A. If you have previous PERF service and select the PERF Hybrid plan, you will continue to accrue service credit toward a defined benefit pension. However, if you elect the My Choice: Retirement Savings Plan, separate from state employment and later return to a My Choice-covered position, you are entitled to receive credit for your years of participation in the My Choice: Retirement Savings Plan before separation.
Q. I don’t know which plan I want to choose. How long do I have to make a decision?
A. You have 60 days from your date of hire to choose your retirement plan option.
Q. What happens if I don’t make an election during enrollment? Which plan will I be in?
A. If you don’t make an election within 60 days of your hire date, you will default to the PERF Hybrid plan.
Q. I defaulted into the PERF Hybrid plan, but I’d rather be in the My Choice: Retirement Savings Plan. Can I switch?
A. No. Your choice, or default to the PERF Hybrid plan, is irrevocable under Indiana law.
Q. Can someone walk me through the PERF Hybrid and My Choice: Retirement Savings Plan options?
A. Yes. INPRS retirement counselors are available to walk you through the plan options. You may want to obtain tax advice from your financial adviser.
Q. What are the financial implications of my election into the PERF Hybrid or My Choice: Retirement Savings Plan?
A. INPRS does not offer tax advice. Consider meeting with your financial adviser to discuss your retirement options based on your goals.