Legislators' Retirement System Member Handbook: The Defined Benefit Fund (LE DB)
The Defined Benefit Fund (LE DB) guarantees a lifetime monthly benefit to employees who qualify. This plan only applies to legislators who were members of the General Assembly on April 30, 1989, and chose to join. Employer contributions and their investment earnings fund the LE DB. The following section explains your rights and responsibilities as a member of this plan.
You are vested in the LE DB once you have earned 10 years of service credit as a member of the General Assembly. You qualify to receive the retirement benefit when you end service and meet the conditions for eligibility.
NORMAL RETIREMENT WITH UNREDUCED BENEFITS
To receive full retirement benefits, you must not receive pay from the state for work in any capacity. You may not receive, nor have previously received, a reduced monthly benefit under this plan. If you qualify you are entitled to a lifetime monthly retirement benefit once you have ended service as a member of the General Assembly and:
- you are at least age 65 and have 10 years or more of creditable service as a member of the General Assembly (or meet the requirements for disability benefits under this plan), or
- you are at least age 60 and have at least 15 years of service as a member of the General Assembly, or
- are at least age 55 and your years of service as a member of the General Assembly plus your age equal at least 85.
EARLY RETIREMENT WITH A REDUCED RETIREMENT BENEFIT
The Plan provides a reduced monthly benefit for life to qualified members. If you wish to retire early, your retirement benefit will be reduced using a formula based on your age. You may receive early retirement as long as you:
- are at least age 55,
- have ended service in the General Assembly,
- are not receiving, nor entitled to receive, pay from the State for work in any capacity and,
- have achieved vested status, or 10 years of creditable service in the General Assembly.
RETURNING TO SERVICE IN THE GENERAL ASSEMBLY
If you are receiving retirement benefits under the plan and you return to the General Assembly, your retirement benefits will stop. When you retire again or upon your death, the benefit will be recalculated on an actuarial basis taking into account:
- your benefit payments previously received, and
- the date that you previously ended employment as a member of the General Assembly.
Retiring from the Plan
If you wait to submit your retirement application, by law INPRS can only pay up to six months of retroactive benefits if you qualify to receive retirement benefits.
CALCULATING YOUR BENEFITS
If you meet the conditions for unreduced retirement benefits described above, your monthly retirement benefit is the lesser of:
- forty dollars multiplied by your total years of service in the General Assembly before Nov. 8, 1989, or
- the highest consecutive three-year average yearly pay credited to your service as a legislator. Your W-2 federal income tax withholding statement is used to decide your yearly pay. Your benefit is decided without consideration of any salary reduction agreement established under Section 125 of the IRS Code, at the date your service as a member of the General Assembly ends. This amount is divided by 12.
When applying for benefits, make sure you complete the tax withholding forms.
BENEFIT OVERPAYMENT OR UNDERPAYMENT
INPRS is required by federal and state law to correct any errors in benefit calculations. If you receive an overpayment as a result of an error, INPRS must recover the overpayment. If you are underpaid, you will receive an additional payment from INPRS.
If you become disabled while in active service as a member of the General Assembly, you may receive a disability benefit if you have:
- at least five years of creditable service as a member of the General Assembly,
- qualified for Social Security disability benefits, or disability benefits under the federal service system, and have provided proof of your qualification to INPRS, and
- your continued disability verified by INPRS at least one time each year until you reach age 65.
The disability benefit will continue as long as the disability exists. The benefit is calculated as though you qualify for a retirement benefit at age 65.
Benefits may not be provided for a disability resulting from a:
- deliberate or a self-inflicted injury or attempted suicide while sane or insane.
- committed or attempted felony act.
If you have completed 10 years of creditable service as a member of the General Assembly and then die while receiving benefits under the LRS, your surviving spouse is entitled to receive a survivor benefit. Your spouse is entitled to the benefit regardless of your age or if you had a permanent disability and were receiving benefits.
Your surviving spouse is entitled to 50 percent of:
- the amount you were receiving at the time of death, or
- the retirement benefit amount you would have been entitled to receive at age 55 or your date of death, whichever is later.
If your spouse would have qualified for a benefit, but your spouse precedes you in death, upon your death your dependent child is entitled to the same benefit your spouse would have received.
If your surviving spouse dies while receiving the survivor benefit and a dependent child of both the surviving spouse and the deceased member survives, your dependent child will receive that same benefit. If there is more than one dependent child, the dependent children will share the monthly benefit equally. Each dependent child will receive this benefit until the age of 18 or during the entire period of the mental or physical disability using disability guidelines established by the Social Security Administration, whichever period is longer.
Important to Know
Income Tax Concerns: TAXATION OF MONTHLY INSTALLMENTS
All of the monthly benefit payable from the LE DB is taxable income. The plan will report the taxable income associated with your benefits to you each year on a Form 1099-R.
The tax rules are complex. If you need more information, you should obtain IRS Publication 575. If you need more help, you should contact your local IRS office or a tax consultant.
The Administrative Review Process
Appeals of the plan's initial determination will be heard by an Administrative Law Judge in compliance with the Indiana Administrative Orders and Procedures Act IC 4-21.5.
To request administrative review, you must have rights as a party or a right to intervene. The steps of administrative review are here.
The appeal process will allow for additional evidence to be presented by all parties. The Administrative Law Judge will submit findings to INPRS. We will review the findings of the Administrative Law Judge and issue a final determination.
All parties will be advised of the final determination.
Keep us informed
It’s vital that you keep us up-to-date about changes to your name, phone number, email address, mailing address or beneficiaries.
You can update this information when you register for your INPRS online account. Changing your information with your employer will not update the information with us. You need to contact us directly. This is the only way to update your personal information.
You can change your address or beneficiary using your online account once you've registered.
To change your name, you must complete the Member Data Change form. You can only submit requests for change of name in writing. Legal documentation such as a court order, divorce decree, or marriage license is required when you submit your change.
How to contact us:
If you have questions, please call our Customer Service Center at (844) GO-INPRS. We are available Monday through Friday from 8 a.m. to 5 p.m. EST.
Every attempt has been made to verify that the information in this handbook is correct and up-to-date. Published content does not constitute legal advice. If a conflict arises between information contained in this publication and the law, the applicable law shall apply.