1977 and 1985 Judges' Retirement System Handbook
Membership
Eligibility
To be eligible for membership in either the 1977 or 1985 Judges' Retirement System, you must have served or be serving, as a regular judge for any of the following courts:
- Supreme Court of the State of Indiana
- Court of Appeals of the State of Indiana
- Circuit Court of any Judicial Court
- Superior Court of any county or counties
- Criminal Court of any county having a separate criminal court
- Probate Court of any county having a separate probate court
- Juvenile Court of any county having a separate juvenile court
- Municipal Court of any county
- Circuit Court of any county or counties
Participation
If you became a judge before September 1, 1985, you are a member of the 1977 Judges' Retirement System, unless you elected not to participate within twenty (20) days after you began your term as a judge.
If you terminated your employment and returned to your position as a judge after August 31, 1985, you will remain a member of the 1977 System.
If you began service as a judge after August 31, 1985, you are a member of the 1985 System.
Effective July 1, 2008, Individuals serving as full-time magistrates on July 1, 2010 may elect to become full-time participants in the 1985 Judges’ Retirement System. After July 1, 2010, all new magistrates will become members of the 1985 Judges’ Retirement System.
Judges in the 1985 Judges’ Retirement System may, following contribution, transfer to the 1985 system service credit earned as a full-time referee, commissioner, or magistrate after leaving the bench.
After Dec. 31, 2010, magistrates in the 1985 Judges’ Retirement System may purchase, at actuarial cost, service credit for service earned in the Public Employees’ Retirement Fund (PERF) as a full-time magistrate, referee or commissioner.
If you are a member of either the 1977 or 1985 Judges' Retirement System, you are required to contribute six percent (6%) of your statutory salary for a maximum period of twenty-two (22) years.
You are not required to contribute to either retirement system during the time that you are not employed as a judge.
Effective January 1, 1989, each participant who began service before September 1, 1985 is deemed to have made a one-time irrevocable salary reduction agreement equal to six percent (6%) of each payment of salary. This six percent (6%) is paid by state and county auditors to the fund. Since the six percent (6%) contributions are not taxed when paid by the state and county, they will be taxed when paid to the judge as a refund or retirement benefit.
Effective October 1, 1989, the State of Indiana elected to pay the six percent (6%) contributions for judges who began their service after August 31, 1985. According to Section 414(h) of the Internal Revenue Service Code, the judges' salaries were reduced by six percent (6%) in order to fund the six percent (6%) contributions paid by the State to the 1985 Judges' Retirement System. Since the six percent (6%) contributions are not taxed when paid by the State, they will be taxed when paid to the judge as a refund or retirement benefit.
Retirement Benefits
Entitlement
You will be eligible for normal retirement with full benefits if you:
- Are age sixty-five (65) and
- Have at least eight (8) years of service credit as a judge.
You will qualify for early retirement with reduced benefits if you:
- Are between the ages of sixty-two (62) and sixty-five (65) and
- Have at least eight (8) years of service credit as a judge.
Your benefit is effective the day following your termination date of employment as a judge. You are entitled to a monthly benefit payable for life in an amount calculated according to Indiana statutes. (See Table A).
To receive your benefit, you may not be receiving, or be entitled to receive, any salary for services currently performed, except for services as a judge pro tempore.
Amount
If you apply for a retirement benefit and are age sixty-five (65), you are entitled to an amount that equals the product of:
- The salary that you received at the time of your separation from service*, multiplied by the percentage shown below:
Table A
|
Years of Service |
Percentage |
|
8 |
24% |
|
9 |
27% |
|
10 |
30% |
|
11 |
33% |
|
12 |
50% |
|
13 |
51% |
|
14 |
52% |
|
15 |
53% |
|
16 |
54% |
|
17 |
55% |
|
18 |
56% |
|
19 |
57% |
|
20 |
58% |
|
21 |
59% |
|
22 or more |
60% |
* Benefit calculations for the 1977 System are based on the current salary of the judge's position from which they retired. The 1985 System uses the salary paid to the judge when they retired.
After Dec. 31, 2009, benefits paid under the 1985 Judges’ Retirement System shall be based on the salary being paid for the office that the participant last held, rather than the salary received at separation.
If you receive early retirement benefits between the ages of sixty-two (62) and sixty-five (65), your benefits are reduced by one-tenth percent for each month that your retirement precedes your sixty-fifth (65th) birthday. This reduction does not apply to those judges who are separated from service because of permanent disability.
Disability Benefits
Determination
You are considered to be permanently disabled if the PERF Board has received a written certification of your disability by at least two (2) licensed and practicing physicians appointed by the Board.
This certification must state that:
- You are totally incapacitated by reason of physical or mental infirmities from earning a livelihood and
- Your condition is likely to be permanent.
You will be reexamined by at least two physicians appointed by the PERF Board at such times designated by the Board but at intervals not exceeding one year. If, in the opinion of these physicians, you have recovered from your disability, your benefits will stop unless you are age sixty-five (65).
During the time of your permanent disability, you will earn creditable service towards retirement. If you have eight (8) years of creditable service by age sixty-five (65), you will be entitled to a normal retirement benefit.
Amount
The annual benefit payable if you become permanently disabled is the product of:
- The salary that was paid to you at the time of your separation from service, multiplied by the percentage shown below:
Table B
|
Years of Service |
Percentage |
|
0-12 |
50% |
|
13 |
51% |
|
14 |
52% |
|
15 |
53% |
|
16 |
54% |
|
17 |
55% |
|
18 |
56% |
|
19 |
57% |
|
20 |
58% |
|
21 |
59% |
|
21 or more |
60% |
Survivor Benefits
Under both the 1977 and 1985 Judges' Retirement Systems, your spouse would qualify for survivor benefits if you met one of the following provisions:
- Died while receiving benefits,
- Completed at least ten (10) years of service and are currently in service as a judge, or
- Were permanently disabled at the time of your death.
Under the 1977 System, the surviving spouse would receive the benefit amount of:
- Fifty percent (50%) of the retirement benefits that you were drawing (or would have been entitled to draw) at the time of your death.
- If you were qualified for a benefit on January 1, 1977 (age 62 with at least eight (8) years of service), the survivor is entitled to an additional $2,000 annually.
Under the 1985 system, the surviving spouse would receive whichever of the following amount is larger:
- $7,000, or
- fifty percent (50%) of the retirement benefit that you were drawing (or would have been entitled to draw) at the time of your death.
Dependent Child
If your spouse dies before you begin benefits, your dependent child is entitled to receive the same benefit that your spouse would have received at the time of your death. If your spouse dies while receiving survivor benefits, your dependent child will be entitled to the same benefit that your spouse was receiving.
If you have more than one dependent child, your dependent children will share the benefit equally. Each dependent child is entitled to receive that benefit until the age of eighteen (18) or during the entire period of their physical or mental disability, whichever period is longer.
If you do not have a spouse or dependent children, your contributions will be refunded to your estate within sixty (60) days after a request for the funds has been properly filed with PERF.
Withdrawal from the System
1977 System
You may withdraw your six percent (6%) contributions (without interest) from the 1977 System if you:
- Terminate your service as a judge and
- Have less than twelve (12) years of creditable service.
1985 System
If you cease service as a judge under the 1985 System other than by death or disability and if you are not eligible for a retirement benefit, you are entitled to withdraw from the system.
Under both the 1977 System and the 1985 System, you are entitled to receive a total distribution of your account.
Income Tax Consequences
If you terminate employment prior to being eligible for monthly benefits, you may elect a refund of your member contributions. You will be taxed (as ordinary income) in the year received on the following of any such refund:
- The 6% contribution made on a pre-tax basis, and
- All contributions which you personally excluded on you individual tax returns.
If you are under age 59 1/2 at the time your refund is paid, you may be subject to an additional 10% federal tax penalty on the above taxable amount. The 6% contributions that were withheld from your pay and included on your individual tax return are not subject to further taxation.
An explanation of your three annuity payment choices and the tax consequences of those choices follows:
- Choice A: To have the total amount of your contributions (less the mandatory withholding for federal income tax) PAID DIRECTLY TO YOU.
- Choice B: To have the entire taxable portion of your contributions paid in the form of a DIRECT ROLLOVER to an Individual Retirement Account (IRA) or a Qualified Retirement Plan which has provisions allowing it to accept the rollover on your behalf.
- Choice C: (May be selected only if you want a partial rollover amount of at least $500) To have a part of the taxable portion of your contribution paid in the form of a DIRECT ROLLOVER to an IRA or a Qualified Retirement Plan which has provisions allowing it to accept the rollover on your behalf.
NOTE: PERF is required to withhold 20% of any taxable portion of your contributions which are paid directly to you and not paid in the form of a DIRECT ROLLOVER to an IRA or a Qualified Retirement Plan.
If you elect Choice B or C, PERF will deliver to you a check payable to the trustee of the IRA or Qualified Retirement Plan and a separate check payable to you representing your non-taxable portion and any taxable portion not directly rolled over. You will then be responsible for delivering the check to the trustee of the IRA or Qualified Retirement Plan that you specified on your refund form.
NOTE: There will be no income tax withholding on any amount directly rolled over.
CAUTION: You should consult the IRS or your professional tax advisor if you need further information regarding the taxes on your contributions.
