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Indiana Public Retirement System

Indiana Public Retirement System (INPRS) > My Fund > Public Employees > PERF ASA Only Plan Member Handbook: Receiving Benefits Before Retiring PERF ASA Only Plan Member Handbook: Receiving Benefits Before Retiring

Terminated/Inactive Members

When you separate from employment, the non-vested portion of your employer contributions will be forfeited. Prior service will be reinstated to your account if you return to ASA Only-covered employment. Forfeited, non-vested money will not be reinstated to your account even if you return to ASA Only-covered employment.

You are considered inactive if you no longer work in an ASA Only-covered position.Your account is considered suspended if:

  • you are inactive,
  • your account has not received contributions for 20 years or more and you are at least age 63.

We will confirm your address to make a distribution to you from your account. If you or your beneficiary are not located, the money in your account will be credited to INPRS until you or your beneficiary claim the money. There will be no further interest credits or earnings after the money is transferred to INPRS.

Leaving ASA Only-covered employment means that you need to make important decisions about your retirement savings. This section explains the issues you will need to consider if you leave a covered position and end employment.

Withdrawing your Annuity Savings Account (ASA)

You can withdraw the balance of your account as a distribution or rollover to another qualified retirement plan if you are no longer in an ASA Only-covered position. There must be a minimum of 30 days since you ended employment.

The withdrawal amounts include:

  • the 3 percent fixed contributions,
  • voluntary contributions,
  • rollovers, and
  • all interest and earnings credited to your account, and
  • vested percent of employer’s contributions.

Payment Options

When you withdraw your ASA, you must decide how you will receive the payment. You must make a choice for the taxable part as well as the non-taxable part.

Your Annuity Savings Account (ASA) will be valued the day after receipt of your application. If your application is received after 4 p.m., your ASA will be valued the next business day. It will be transferred to a Fixed Value Fund in order to minimize loss while your request is processed. However, you may transfer your monies between investment options at any time before we receive your application. You may transfer monies via phone or online.

If you are age 62 with at least 5 years of participation, refer to the Retiring from PERF section for other options.

The tax status of your mandatory ASA contributions depends on whether or not taxes were withheld on them before the contributions were made to PERF. The employer-paid portions of the mandatory contributions are pre-tax. Your portion of the contribution can be deducted before or after taxes have been withheld.

You may elect a distribution at any time after you have separated from employment for 30 days. Distribution requests can be made on this website or by calling (888) 286-3544. If your request is received before 4 p.m. EST, it will be processed the same day. Checks will be issued and mailed within three to five business days.

Taxable Portion - Direct Rollover
You may elect to have all or part of the taxable portion of your ASA paid in the form of a direct rollover into an eligible 401(a), 403(b) or governmental 457(b) plan, or Traditional or Roth IRA. The plan must have terms allowing it to accept the rollover on your behalf.

Except in the case of a Roth IRA, this option defers taxes you owe on your ASA balance.

If you choose to roll over only part of the taxable amount, the portion not rolled over is paid directly to you. The amount you receive will be less the mandatory 20 percent withholding for federal income tax.

Taxable Portion - Paid Directly to You
You may elect to have the total amount of the taxable portion of your ASA paid directly to you. This amount will be less the mandatory 20 percent withholding for federal income tax.

Non-Taxable Portion - Direct Rollover
You may choose to roll over all or part of the non-taxable portion of your ASA. You may elect up to two financial institutions to receive your ASA. The institutions will receive the money in the form of a direct rollover into an eligible qualified plan, 403(b) plan, or Traditional or Roth IRA. The plan must have provisions allowing it to accept the rollover on your behalf. If you choose to roll over only part of the non-taxable amount, the portion not rolled over is paid directly to you.

Non-Taxable Portion - Paid Directly to You
You may elect to have the total amount of the non-taxable portion of your ASA paid directly to you.

You will receive a 1099-R. The 1099-R will be postmarked by January 31 the year after you receive your distribution. By law, this is the latest date 1099-Rs can be mailed.

INPRS will withhold 20 percent from your distribution. The 20 percent will come from the taxable portion paid to you or to your surviving spouse. Adjustments may be made for payments made to survivors under special circumstances. State taxes will be withheld if required by the state or requested by you or your surviving spouse.

If you take a rollover distribution, you must complete the rollover within 60 days after you receive the distribution. If you do not roll over your contribution within 60 days, you may owe taxes and/or penalties unless you qualify for a waiver. Please consult your tax professional for waiver qualifications.

Tax Penalty – Early Withdrawal of ASA
You may have to pay an additional 10 percent federal tax penalty on your ASA if you are not age 59 1/2 at the time of your distribution.

Death of a Member

In the event of your death, INPRS must be notified so that your beneficiaries receive their payments promptly. INPRS needs a copy of the death certificate to make any distributions of available ASA balances or survivor benefits. Employers may inform INPRS of your death. The death certificate will still be required. Employers do not always provide a member’s death notification.

INPRS will distribute the ASA to the beneficiary or beneficiaries on file. The named beneficiary’s right to a benefit vests upon your death. A change of beneficiary designation must be on file with PERF before your death. A change received after your death is invalid.

If you name more than one primary beneficiary, and one of them precedes you in death, it can change the benefits formula for the survivors. If you don’t file a new beneficiary designation form, the remaining primary beneficiaries will receive a portion of the deceased primary beneficiary’s share based upon the remaining primary beneficiaries’ percentages.

John lists three beneficiaries and the percentages he wants them to receive:
Ann – 60 percent; Bob – 30 percent; and Carl – 10 percent

Ann dies before John. John forgets to fill out a new beneficiary form. He dies with $10,000 in his ASA account. Because Ann is deceased, Bob and Carl will now split the $10,000 two ways.

John’s choice to divide a deceased member’s portion – either prorated or equally – decides surviving beneficiary amounts for Bob and Carl.

If John chose prorated:
Bob’s original percentage was 30 percent. Carl’s was 10 percent. That is a 3 to 1 ratio.
Bob gets three times the amount or 75 percent ($7,500).
Carl gets 25 percent ($2,500).

If John chose equally:
Bob gets his 30 percent ($3,000) plus half of Ann’s ($3,000) or $6,000.
Carl gets his 10 percent ($1,000) plus the other half of Ann’s ($3,000) or $4,000.

Make sure you review and update your beneficiary choices regularly.

If you call with information about a member’s death, please leave your contact information so we can get in touch with you. You can also report a death by sending the death certificate to INPRS by mail or fax. Please include your contact information.

Beneficiary or Survivor Benefits

Your account will be paid to the listed beneficiaries under the following conditions:

  • you die while in service, but not in the line of duty,
  • you die in the line of duty, while in service, or
  • you have ended employment but you have not withdrawn your account balance.

The beneficiaries will receive your ASA balance which includes the mandatory 3 percent and any voluntary contributions, any rollover savings account contributions, the vested portion of the employer share (variable) contributions and any earnings. The beneficiaries may elect to have the account paid as a:

  • lump sum,
  • direct rollover to another eligible retirement plan, or
  • an annuity if the account balance is at least $15,000 and the beneficiary or spouse is at least age 62.

If you do not list any beneficiaries, or if your beneficiaries precede you in death, the account will be paid to your surviving spouse, dependents or estate.

If you die in the line of duty while in service but you are not fully vested in the employer share (variable) contributions, the account is deemed fully vested. Meaning, the beneficiary or survivor will receive 100 percent of all amounts in your account.

Beneficiary payments or surviving spouse

The beneficiary/survivor of a deceased member has the option to receive a lump sum payout of the account or may annuitize the ASA.

A survivor may make separate elections for ASA and RSA balances. A survivor may receive a lump sum payment for the RSA and annuitize the ASA as long as the balance to annuitize is at least $15,000. The survivor must be at least 62 years of age.

If you fail to inform PERF of beneficiary changes, it may mean payment will be made to someone who is no longer your choice to receive your ASA balance. Make the change via your online account.

Disability Benefits

If you become disabled, you can withdraw the 3 percent fixed contributions paid by the state of Indiana. You continue to earn service credit even though you are on disability but have not ended service.

For example, you work for eight months, become disabled and receive disability for four years. After that time, you are no longer considered disabled. If you do not return to work for your employer, you can withdraw 80 percent of the employer contributions because you had eight months of service credit and earned four years of service while on disability.

If you become disabled, INPRS will provide disability benefits to you if:

  • Social Security has determined you to be disabled, and you are receiving salary* or employer-provided income protection benefits. You are on leave under the FMLA, or off on workers’ compensation, as of the onset date established by the Social Security Administration (SSA).
  • Your disability onset date set by SSA MUST come before you end service with your employer. Please contact INPRS if you have any questions about establishing eligibility for disability benefits.

*Receiving a salary includes your last check date. It does not include any checks you received more than 30 days after the last day you were paid. This includes being paid for physical work, sick time, used compensatory time, or while on other leave or vacation.

NOTICE: INPRS CANNOT process your disability application without a copy of your Social Security award letter with the onset date.

To the extent that you are vested with a minimum account balance of $15,000, you may elect to have a withdrawal paid as:

  • a lump sum,
  • a direct rollover to an eligible retirement plan, or
  • as a monthly annuity.

Disability Withdrawals

If you have met the Social Security disability requirement, you may request a distribution online. You may also speak to a Customer Service Representative.

If you are disabled or you have a rollover account balance, you are eligible for withdrawals:

  • disability withdrawal – paid in a lump sum, a direct rollover to another eligible plan, or as a monthly annuity
  • rollover distribution – paid in a lump sum, a direct rollover, or a monthly annuity at normal retirement age (age 62 + five years of service)

All voluntary distributions for disability and rollover withdrawals require 100 percent of the available amount to be withdrawn.

If you meet age, service and minimum balance requirements, you must submit your elections using the PERF and TRF Retirement Application. You can access the retirement application by downloading it here or by calling (888) 286-3544.

Disability withdrawals require 100 percent of the available amount to be withdrawn.

Section Three: Retiring from PERF