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Indiana Public Retirement System

Indiana Public Retirement System (INPRS) > My Fund > Teachers > TRF Member Handbook: Monthly Pension Benefit TRF Member Handbook: Monthly Pension Benefit

Benefits Overview

Members with at least 10 years of service in a TRF- or PERF-covered position are considered vested in their monthly pension benefit.

A member’s retirement benefit consists of a monthly pension benefit and an Annuity Savings Account (ASA).

  • The member’s monthly pension benefit is paid as a lifetime monthly benefit and is funded by the State or the member’s employer. To become eligible for a benefit, the member must be vested with 10 years of creditable service in a covered position.
  • The member’s Annuity Savings Account (ASA) contains the mandatory three percent of annual compensation contribution, which is made by the member or the member’s employer, as well as any voluntary contributions made by the member and any investment interest or earnings. A member is immediately vested in the ASA.
  • A member may also create a Rollover Savings Account (RSA) for which the member receives a detailed statement of account activity and balance information each quarter. Non-retired members may create a RSA by transferring funds from an IRA or other qualified retirement plan into TRF.  TRF will only accept transfers of taxable funds.  These rolled over funds, along with investment gains and losses, comprise the RSA.  Refer to the Rollover Savings Account section of this handbook for additional information.

Eligibility

Vesting

A member must be vested (has earned 10 years of service credit in a covered position) to become eligible for a monthly pension benefit.  Once vested, the member may receive a monthly pension benefit once he or she meets certain age and service requirements.

Regular Retirement

To apply for a regular (unreduced) retirement benefit, a member must meet one of the following criteria:

  • Age 65 or older with at least 10 years of service credit;
  • Between ages 60 and 64 with at least 15 years of service credit; or
  • Between ages 55 and 59, if age and service credit total at least 85 (known as the Rule of 85)

If the member meets the age and service requirements above and chooses the A-1 payment option, the normal annual pension benefit is calculated by the following formula:

Average of Highest 5 Years of Annual Compensation x Total Years of Service x 1.1% (0.011)

Early Retirement

Early retirement is available to members who are between ages 50 to 59 with 15 or more years of service credit. A member retiring early receives a percentage of the normal annual pension benefit, according to Table 2 (below). The percentage of the pension benefit you receive at retirement remains the same for your lifetime.

Table 2 – Early Retirement Percentage of Normal Annual Pension Benefit

Age Percentage of Benefit
59 89%
58 84%
57 79%
56 74%
55 69%
54 64%
53 59%
52 54%
51 49%
50 44%

Age 70 Benefits

You may begin receiving retirement benefits while continuing to work in a TRF-covered position if you are age 70 and have at least 20 years of creditable service. Please note that this election is irrevocable. A member who chooses to begin receiving monthly retirement benefits while working in a TRF-covered position cannot earn additional service credit toward retirement, but may continue to make contributions to their ASA. Members choosing this option may not withdraw their ASA balance until separated from service.

Your Benefit

Factors

The amount of a member’s monthly pension benefit is based on the following factors:

  • Benefit multiplier: 1.1 percent (.011)
  • Average annual compensation: The average of the five highest years of annual compensation earned for service in a covered position
  • Years of service: Service credit earned or purchased by a member
  • Member’s age at retirement: Early retirement results in a reduction in the monthly pension benefit
  • Retirement option selected and age of beneficiary, if applicable

Benefits Calculator

A member may calculate his or her own benefit estimate by visiting the Online Calculators page.

Other methods for calculating an estimated monthly benefit include:

Method 1

Log in to the TRF Interactive Web site to generate an estimate based on the information we have to date which includes projected final average salary and service information, as well as the latest information reported from the employer. Estimates of all payout options are provided.

Method 2

From this Web site, calculate an estimate by entering the projected retirement date, final average salary, and years of service.  

Example You
 Final average salary  $50,000.00  $
 Benefit multiplier  x         .011  x         .011
 Pension base amount   $    550.00  $
 Years of service  x           30  x                
 Annual retirement benefit  $16,500.00
 Monthly benefit  /             12  /             12
 Calculated as an A-1 option  $  1,375.00  $

Method 3

From the INPRS Web site or TRF Interactive Web site, calculate an estimate by using information from the member’s latest Social Security Statement. To be eligible for this Social Security Integration payment option, the member must be less than 62 years of age at retirement and must enter the estimated Social Security* income.

Payment Options

INPRS does not recognize Qualified Domestic Relations Orders (QDROs) as described in ERISA.

Five-Year Certain and Life (formerly A-1): With this pension option, you get a lifetime monthly benefit. If you pass away before receiving five years of payments, your beneficiary will get that monthly benefit for the remainder of those five years. The beneficiary can also choose a lump sum equal to the present value of those remaining payments. Payments to the beneficiary stop at the end of that five year period.

Straight Life (formerly A-2): You will get a monthly benefit for life, but there are no monthly payments to anyone after your death. However, if you combine your ASA with your pension check, there could be remaining ASA money. PERF will add up the monthly pension and ASA payments paid before your death. If the total of monthly payments is less than your ASA balance when you retired, your beneficiary will get the difference.

Minimum Amount Provision
The minimum amount provision makes sure you or your beneficiary will get a total pension benefit that is at least the balance of what you have in your ASA when you retire. If you die before then, your beneficiary will receive the rest of the money due. Your beneficiary can get this money as a lump sum or in monthly payments.

Example: You have $100,000 in your ASA when you retire. After 2 years, you have received $10,000 in monthly payments. Sadly, you die. Your beneficiary will then get the remaining $90,000.

Modified Cash Refund Plus Five-year Certain and Life (formerly A-3): To select this option, you must combine at least part of your ASA with your lifetime monthly pension benefit. If you die before receiving payments for five years, your beneficiary gets the pension part of your monthly benefit for the rest of those five years. The beneficiary could also choose a lump sum equal to the present value of the remaining payments. He or she would also get any remaining balance on your ASA.

Because survivor options (100 Percent Survivor Benefit, 66-2/3 Percent Survivor Benefit and 50 Percent Survivor Benefit, formerly options B-1, B-2, and B-3) provide for a survivor benefit, your monthly pension benefit is decreased.

100 Percent Survivor Benefit (formerly B-1): You will get a monthly benefit for life. After you pass away, the same monthly benefit will be paid to your joint survivor beneficiary for his/her lifetime. Contact PERF if your joint survivor beneficiary is not a spouse; there are restrictions (age, child, etc.)

66-2/3 Percent Survivor Benefit (formerly B-2): You get a monthly benefit for life. After you pass away, 66-2/3 percent of your benefit will be paid to your joint survivor beneficiary for his/her lifetime.

50 Percent Survivor Benefit (formerly B-3): You receive a monthly benefit for life. After you pass away, one-half of your benefit will be paid to your joint survivor beneficiary for his/her lifetime.

Social Security Integration: If you retire between ages 50 and 62 you may combine the PERF monthly pension benefit with your estimated Social Security benefits. INPRS pays a larger monthly benefit before age 62. The payment may be greatly reduced or terminated at age 62. Your estimated monthly Social Security payment determines if your INPRS payment will be reduced or terminated. INPRS does not work in conjunction with Social Security. This selection will not impact the benefit received from Social Security.

Before age 62, member benefits will be calculated:

  • using the sum of the member’s TRF early retirement pension benefit multiplied by actuarial factors and the member’s Social Security estimate.

The result is a larger monthly benefit payment before age 62.

After age 62, member benefits will equal:

  • the difference between the member’s Social Security estimate and the member’s TRF monthly pension benefit prior to age 62.

The result may be a benefit payment that is greatly reduced or completely stopped. This is based on the amounts of the member’s estimated Social Security payment and TRF early retirement pension benefit.

Minimum Amount Provision

The minimum amount provision is relevant to certain options for distribution of the monthly pension benefit. The minimum amount provision is in place to guarantee that a member or that member’s beneficiary will receive benefit payments that total at least the balance of the member’s Annuity Savings Account (ASA) at the time retirement. If a member does not receive this minimum amount in combined annuity and pension payments during his or her lifetime, the member’s beneficiary can claim the remaining amount due. For example, if a member has $100,000 in her ASA at the time of retirement, this member’s total benefits received (combined annuity and pension payments) must equal $100,000 or the member’s beneficiary(ies) may claim the difference.

TRF Member Handbook: Annuity Savings Accounts