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(through Sep. 30, 2015)
(Oct. 1 through Dec. 31, 2015)
Rates are set quarterly and annuitizing your Annuity Savings Account (ASA) is optional. Attend one of our workshops to learn more.
Benefit estimate calculators with the current annuitization rate can be found here.
See: How is the rate set?
Remember, you’re not required to annuitize ASA funds with us, and many PERF and TRF retirees do not. Before retirement you decide how to invest your ASA. At retirement, you may choose to annuitize your ASA funds, roll them over to another plan, or take the funds as a lump sum payment.
Quarterly annuity market rate changes won’t affect you if you don’t convert your ASA funds to an INPRS annuity, nor does it affect current retirees and benefit recipients who previously annuitized their ASA funds with us.
The Indiana General Assembly has set annuitization rates as noted below.
What is an annuity?
An INPRS annuity is a set amount of money paid to you if you convert your ASA account into a monthly benefit payment.
Am I required to convert my Annuity Savings Account into an annuity payment when I retire?
No. Converting ASA funds to an annuity from us is an option, not a requirement. The goal of annuities is to provide a steady stream of income during retirement.
Each quarter we set the annuity rate as the market rate or 4.5 percent, whichever is larger.
The quarterly market rate equals 1.5 percent plus an average* of the 10-year U.S. Treasury yield, rounded to the nearest 100th percent.
Assuming a 10-year U.S. Treasury yield of 1.87 percent
Market Rate: 1.5 percent + 1.87 percent = 3.37 percent
Because this rate is lower than 4.5 percent, the annuity rate would be 4.5 percent.
*The average is determined using the last five business days of the two preceding quarters. You can get more details from our Dec. 12, 2014 board meeting minutes,here.
If I annuitize my ASA account, how do you calculate my monthly benefit?
Working with our actuary, we consider several factors, including:
An outside provider will have a similar approach.
How can I estimate the future value of an annuity?
Predicting a future market rate for annuities is as difficult as forecasting next year’s mortgage or car loan interest rates. However, there are some helpful resources. Try our benefit estimate calculator if you’re near retirement. To learn more, seeInformation Regarding Annuities.
You probably consider your retirement day to be your last day in pay status, or the last day you work. We use a different date. Your retirement date is the first of the month following your last day in pay status.
Example: If your last day in pay status is in September 2015, your retirement date will be Oct. 1, 2015.
|Month of Last Day in Pay Status||Retirement Date||Market Rate Effective|
|January||Feb. 1||January - March|
|February||March 1||January - March|
|March||April 1||April - June|
|April||May 1||April - June|
|May||June 1||April - June|
|June||July 1||July - September|
|July||Aug. 1||July - September|
|August||Sept. 1||July - September|
|September||Oct. 1||October - November|
|October||Nov. 1||October - December|
|November||Dec. 1||October - December|
|December||Jan. 1||January - March|
If we receive your benefit application with annuitization decision within six months of your effective retirement date, you’ll get the annuitization rate in effect as of that date.
Remember, your retirement date is the first day of the month after your last day in pay. Your last day in pay status is usually the date most people think of as their retirement day, including any specific days you are paid while not at work, such as vacation time.
If I defer annuitizing my ASA/RSA* until after I have started receiving benefits, what rate can I expect?
If you wait to annuitize your ASA/RSA, you’ll get the active rate on the date we get your election form.
*RSA = Rollover Savings Account (money from another plan you have rolled into your PERF or TRF account)
If your rollover funds arrive after your annuity payment starts, your annuity will be recalculated based on the rate you already have. The rollover won’t change your rate. If you plan to annuitize rollover money as part of your retirement, you must tell us in writing as part of your retirement application.