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Participant Rights and Responsibilities
Upon Transfer or Termination

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Table of Contents
 

Page contents:

Summary

Eligibility

Discontinuation of Active Participation

Rights and Privileges After Termination of Employment

Plan Distributions and Withdrawals

Participant Responsibilities

PERF Contact Information


 

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Indiana University

Participant Rights and Responsibilities Upon Transfer or Termination

Section VI.
Retirement Plans

PERF (Public Employees’ Retirement Fund)

Plan Summary

Public Employees’ Retirement Fund (PERF) is a retirement plan established by the State of Indiana to provide retirement, disability, and survivor benefits for its participants.

PERF has two separate and distinct benefits, a pension benefit and an annuity savings account benefit. Both benefits are funded by Indiana University.

Pension Benefit. The pension benefit is an annual benefit payable for life that is based on the following formula:

(Years of PERF creditable service) X (Final average salary) X (1.1%) = Annual benefit for life.

Final average salary refers to a participant's highest five years of compensation in a PERF-covered position.

Participants must have at least 10 years of PERF creditable service to have a vested right to the pension benefit.

Annuity Savings Account Benefit. The annuity savings account benefit is an employer contribution equal to 3 percent of a participant’s compensation that is contributed to an individual participant account by Indiana University. Indiana University makes all contributions to annuity savings accounts. Participants are not required, nor permitted, to make additional contributions to annuity savings accounts.

Contributions made to the annuity savings account on a participant’s behalf are immediately 100% vested and non-forfeitable.

Eligibility

Fifty percent or more FTE Support and Service Staff and Hourly with PERF employees hired before July 1, 2013, are eligible to participate in the PERF retirement plan, unless covered by another university- or state-sponsored retirement plan.

Discontinuation of Active Participation

Contributions will no longer be made to PERF on behalf of an employee if:

In the event a participant terminates employment or ceases to be a member of an eligible class of employees at Indiana University, contributions will stop being made to PERF with the employee’s last regular paycheck or the last paycheck attributable to employment in an eligible class of employees.

Participants who terminate employment or cease to be in an eligible class of employees at Indiana University have the same rights as active participants, except that no additional contributions will be made to PERF on their behalf by Indiana University.

Rights and Privileges After Termination of Employment

A participant’s PERF rights and privileges after termination of employment with Indiana University will differ depending on the following participant circumstances:

Withdrawal. If a participant terminates employment with Indiana University and is no longer employed in a PERF-covered position, the participant may elect to withdraw the balance of his or her annuity savings account upon satisfying the following conditions:

The annuity savings account withdrawal consists of the 3 percent mandatory contributions made by Indiana University to the participant’s account and all accumulated earnings credited to the account. Money contributed to PERF on the participant’s behalf to fund the pension benefit belongs to Indiana University until the participant becomes eligible to receive the pension benefit from PERF. Therefore, the pension benefit cannot be withdrawn by the participant.

A participant does not have to take a withdrawal of his or her annuity savings account upon termination of employment with Indiana University, even if the participant qualifies for a withdrawal. The participant may leave the accumulations in his or her annuity savings account and continue to manage the investment of the account with PERF.

Effective January 1, 2009, a participant may elect to withdraw his or her annuity savings account balance and still be entitled to receive his or her pension benefit so long as he or she is vested at the time of retirement and retirement occurs after December 31, 2008.

Disability. A participant is eligible to apply for disability benefits from PERF upon satisfying the following conditions:

A participant will be entitled to receive PERF disability benefits for as long as he or she continues to be eligible for Social Security disability benefits.

Retirement. To be eligible to receive a full (unreduced) pension benefit, a participant must satisfy the following conditions:

To receive an early retirement benefit with a reduced pension, a participant must satisfy the following conditions:

Plan Distributions and Withdrawals

PERF distributions are generally subject to a 20 percent mandatory federal income tax withholding rate. This mandatory withholding will reduce the amount a participant actually receives upon withdrawing funds from PERF. However, the amount withheld will be credited against any taxes the participant owes for the year when the participant files his or her annual tax return.

There are exceptions to the mandatory federal income tax withholding rule, including receiving a PERF distribution as a life-time annuity payment or directly rolling over a PERF distribution to an eligible retirement plan (e.g., an IRA).

In addition, PERF distributions made prior to attainment of age 591⁄2 are generally subject to a 10% early withdrawal penalty tax, even if the withdrawal was made after the participant terminated employment with Indiana University.

There are exceptions to the 10% early withdrawal penalty tax, including receiving the PERF distribution as a life-time annuity payment, receiving the PERF distribution after terminating employment at age 55 or older, or receiving the PERF distribution after terminating employment due to a permanent disability.

Finally, federal law requires that a participant begin to receive at least a partial distribution of his or her Retirement Plans. The required beginning date is April 1st of the calendar year following the calendar year in which the participant attains age 701⁄2 or terminates employment, whichever is later. This rule is known as the minimum required distribution rule.

Receiving Pension while Continuing to Work. If a participant has attained age 70 and has been credited with 20 or more years of PERF creditable service, the participant may begin receiving pension benefits while continuing to work at Indiana University.

Participant Responsibilities

Upon retirement from or termination of employment with Indiana University, a PERF participant must:

  • Complete and return appropriate retirement forms to a campus Human Resources office to receive PERF benefits.
  • Notify PERF of any name and/or address change.
  • Notify PERF of any beneficiary change.
  • Continue to manage investment of the annuity savings account with PERF.
  • Begin to receive minimum required distributions on or before the required beginning date.

PERF Contact Information

PERF
1 North Capitol, Suite 001
Indianapolis, Indiana 46204

Web site: www.in.gov/inprs

Call Center:
     (317) 233-4162
     (888) 526-1687 toll free number

Fax: (317) 232-3882

 

Page updated: 24 June 2013
University Human Resources
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