Vesting

Understanding the three-year vesting requirement

When you are hired and enrolled in the IU Retirement Plan, you are subject to a three year “vesting cliff.” 

This means that retirement contributions made by Indiana University become 100 percent yours after you have been employed and enrolled in the IU Retirement for three years.*

If your employment ends prior to that time, those contributions are forfeited.

There are exceptions. You will be fully vested if one of the following occurs before the three-year cliff:

  • Death
  • Disability (as defined by social security)
  • You turn 65

* The three year cliff vesting requirement applies to plan participants enrolled after September 1, 2010.

Forfeited contributions

Forfeited contributions are removed from individual plan accounts, but remain assets to be used by IU to offset future contributions for other participants.

If you terminate your employment before your IU Retirement Plan contributions and earnings are fully vested, but you return to IU employment within six months, the forfeited account balance on your date of termination will be reinstated as soon as administratively possible. 

Information about specific circumstances

If you are a PERF participant, your years of employment count toward vesting service in the IU Retirement Plan. If you have been employed and part of PERF for over three years, you are vested.

Employment at IU-affiliated entities does not count toward vesting service in the plan.

No, all years of IU employment as an IU Retirement Plan or PERF participant count for vesting regardless of leave or pay status.

No, all years of IU employment count toward vesting as long as you are employed in an eligible position.