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Employers must make yearly contributions to the Fund. Currently, the employer contribution is 19.7 percent of the base salary which funds the retirement plan. The actuarial firm appointed and approved by the INPRS Board recommends this amount.
The employee interest rate is set at least yearly when crediting interest on employee contribution accounts. Active members are credited at least yearly based on the prior fiscal year end balance.
You will not receive interest credit if you have less than 20 years of service and your account has been inactive for more than 10 years.
You must contribute 6 percent of your base salary while employed in your covered position or for 32 years, whichever comes first. The 6 percent comes out of your paycheck each pay period. Your employer may choose to “pick up,” or pay, all or part of your contribution.
If your employer “picks up” your portion, you will not be taxed on the 6 percent at that time. You will pay taxes on the “picked up” amount only if you withdraw your member account balance. At retirement, you will recover tax credit for post-tax contributions by receiving non-taxable pension benefits at a rate determined by IRS tables. See "Tax Consequences" for more information about taxation of benefits.
If you end service, die before vesting or if you are the survivor of a member, your account equals the value of your contributions plus interest valued the day before you apply for a distribution. In the event of your death, your account equals the value of your contributions on the date of your death plus contributions received after that date. Your account includes mandatory contributions, made by you or your employer, and the accrued interest.
Section Three: Your Benefits