Human Resources

To be eligible to participate in the Plan, an employee must satisfy the Participant List Requirement and IU Retirement Plan Requirement described below and not be a member of an excluded class of employees. Also, as an administrative practice, IU requires that you must be in a paid status for a minimum of a semester prior to retiring and being eligible for benefits under this retirement plan.

Participant List Requirement.  An employee must be listed as an eligible participant in the IU Replacement Retirement Plan Eligible Participant List (Section H of the IU Replacement Retirement Plan Summary of Plan Provisions Document). 

To be listed as an eligible participant in the Eligible Participant List, an employee must have satisfied one of the following criteria:

• Had an initial date of employment with Indiana University after July 14, 1988; or
• Had initiated participation in the IU Retirement Plan at the 15% contribution level after July 14, 1988

IU Retirement Plan Requirement.  An employee must be an active participant in the IU Retirement Plan at that 15% contribution level.

To be eligible to participate in the IU Retirement Plan at the 15% contribution level, an employee must be a 100% full-time equivalent (FTE) academic, Exempt staff, or eligible Non-Exempt staff (PAO & PAU) employee, (grade 16 and above), hired in an appointed position before January 1, 1989.

The following individuals are prohibited from participating in the Plan:

• Geological Survey Department employees
• Employees associated with an external agency agreement that does not accept early retirement plan participation

An employee is no longer eligible to participate in the Plan if:

• The employee terminates employment with Indiana University prior to being vested in their Plan benefit; or
• The employee no longer satisfies the eligibility requirements for participation in the IU Retirement Plan at the 15% contribution level.

In the event an individual becomes ineligible to participate in the Plan prior to becoming vested, the individual’s entire Plan benefit will be forfeited. 

Employer Contributions

Indiana University will make all contributions required to fund the Plan.  All contributions will be paid into the trust fund and will be held, managed, invested, and distributed in accordance with the provisions of Plan and trust agreement. 

Employee Contributions

Indiana University makes all contributions to the Plan.  Employees are not required, nor permitted, to make any contributions to the Plan.

Maximum Contribution Amount (IRC Section 415 Limit)

Federal law limits the total amount that a participant can accrue under the Plan when such benefit is expressed as an “annual benefit.” The annual benefit cannot exceed the lesser of $275,000 for 2024 / $280,000 for 2025, or 100 percent of the participant’s average compensation for their highest 3 years. (The IRS adjusts the contribution limit periodically for increases in the cost of living.)

The term “annual benefit” means a benefit payable annually in the form of a straight life annuity under a plan to which employees do no contribute and under which no rollover contributions are made.

Rollover Contributions

Rollover contributions are not permitted to be made to the Plan.  A “rollover contribution” is an employee directed transfer of retirement plan assets from a retirement plan of a prior employer or an IRA to the retirement plan of a current employer.

Continued Contributions

The Plan benefit replaces the “interim benefit” under the IU 18/20 Retirement Plan only.  In addition to the Plan benefit, an employee may also be eligible for the “continued contribution benefit” under the IU 18/20 Retirement Plan.  Continued contributions benefits are subject to the terms and conditions of the IU 18/20 Retirement Plan.  Please reference the IU 18/20 Retirement Plan Summary for more information on continued contribution benefits.

Vesting

An employee must satisfy all of the following age, service, and employment conditions in order to become vested in their Plan benefit:

• 18 years of participation in the IU Retirement Plan at the 15% contribution level;
• 20 years of continuous full-time service with Indiana University
• Attainment of age 64*
• Termination of employment with Indiana University
• Not reemployed by Indiana University after benefit payments have begun

*Faculty participants with a 10-pay academic year appointment will satisfy the attainment of age 64 requirement on:

• January 1st, if their 64th birthday falls during the following spring semester; or
• July 1st, if their 64th birthday falls during the following summer or fall semesters

A participant’s Plan benefit is forfeited when the participant terminates employment, becomes ineligible to participate in the Plan, or dies before becoming entitled to their full benefit under the Plan.

Forfeitures will be used to reduce Indiana University’s contribution to the Plan in the following Plan Year. 

If a participant receiving benefit payments under the Plan is reemployed by Indiana University, that participant will forfeit any payments that otherwise would have been payable during the period of reemployment, effective as of the date of rehire.

A vested participant may elect to receive their Plan benefit in one of the following forms:

1. Standard retirement benefit; or
2. Optional retirement benefit

Standard Retirement Benefit

If elected, the standard retirement benefit is the annual benefit amount a vested participant will receive for life based on the following formula:

Average salary x 36% = annual benefit amount

Optional Retirement Benefit

If elected, the optional retirement benefit is the annual benefit amount a vested participant will receive for 5 years or until death if earlier based on the following formula:

Average salary x 100% = annual benefit amount

Average Salary

Average Salary means the Participant's average base salary for the five (5) year period preceding the earlier of his date of retirement or his attainment of age sixty-five (65). Average Salary shall mean the greater of:

1. the Participant's average base salary for the five (5) year period preceding his date of retirement; or
2. the Participant's average base

Distribution of the Standard Retirement Benefit

If a vested participant elects to receive their Plan benefit as the standard retirement benefit, the Plan benefit will be distributed as a monthly amount payable for the vested participant’s life.  The monthly amount is determined by dividing the participant’s annual benefit amount by 12.

Distribution of the Optional Retirement Benefit

If a vested participant elects to receive their Plan benefit as the optional retirement benefit, the Plan benefit will be distributed as a monthly amount payable until the earlier of:

1. The participant’s death, or
2. Completion of 60 monthly payments

In-Service Distributions

In-service distributions, including hardship distributions, are not allowed to be made to a participant from the Plan.

Loans

Loans are not allowed to be made to a participant from the Plan.

Required Minimum Distributions (RMDs)

When you turn age 72 (or 73 if your 72nd birthday is after December 31, 2022), the IRS requires that you begin taking distributions from certain retirement accounts, called a “required minimum distribution” or RMD. You can take this first withdrawal either in the year you turn 72 or wait until April 1 of the next year. If you're still working, you can defer RMDs until after you separate/retire from IU without penalties. For example:

• If you turn 72 in 2022, your first withdrawal must be taken by April 1, 2023. But you’ll also have to take a second withdrawal by December 31, 2023.
• If you turn 72 in 2023, your first withdrawal is due by April 1, 2025, since you turn 73 in 2024.

For questions about RMDs, contact Fidelity or the account vendor directly.

Death Distribution

If a participant dies before distribution of their Plan benefit commences, the participant’s Plan benefit will be forfeited.

If a participant dies after distribution of their Plan benefit has commenced, the remaining portion of the participant’s Plan benefit will be forfeited.

Taxes on Distributions

Participants will complete new income tax withholding forms at the time of benefit application.