A number of INPRS-related legislative changes were approved by the 2018 Indiana General Assembly. Below is a brief summary of the legislation. You may e-mail inquiries to email@example.com or call (844) GO-INPRS for more information.
HEA 1109 for PERF/TRF Members
The continued separation of the Defined Benefit (DB) and Defined Contribution (DC) accounts. The following previsions apply to members of PERF/TRF.
- The member may suspend membership in the fund if:
- The member terminates employment
- The member is not currently employed in a covered position
- The member may retain creditable service as long as it is not used as a benefit in another governmental plan
- The member may make a partial withdraw from his/her DC portion of their Hybrid account before they retire
- The member must not have performed any service in covered positon for at least 30 days after termination of employment
- Under applicable fund or
- For same employer
- The member may be active or inactive and roll funds into their DC account
This legislation removed the following requirements:
- The member had to be eligible for retirement or disability retirement to suspend membership
- The member had to resume service to claim the benefit
- The member would lose service time if he/she chooses to withdraw a part or all of their DC account
- The member had to be vested to withdraw
- The member had to be active to roll funds into his/her DC account
HEA 1109 for LEDC Members
Beginning July 1, 2018, the following prevision will apply to members of LEDC:
- The member will default into the Target Date Fund (TDF) determined by the rules of the board if no investment choice is made by the member
- The member’s current CRIF investment option will default to the appropriate TDF by December 31, 2018 if the member has not designated a fund
HEA 1109 for PERF Joining requirements
Under this new law, the effective date of participation will be a date that is approved by the board. The effective date can be suggested by a political subdivision or the board. The date shall not be later than 60 days after the approval.
HEA 1109 Death Benefit Coverage for Police Officers and Firefighters
- College and university police officers and firefighter employees are eligible for special death benefit
- Payments are required annually instead of quarterly
- Emergency medical providers for health care systems affiliated with state educational institutions are eligible for the special death benefit
- Employers who elect to purchase the benefit must make annual payments instead of quarterly
- Annual payment dates are prescribed by the board.
HEA 1109 for ’77 Fund and EG&C Deductions from Benefits
- Members will not be able to deduct pledges or contributions to charitable or non-profit organizations
- Insurance and union dues are still on the list of allowed deductions
The following legislation applies to members of the ’77 fund.
SEA 27 Cost to Acquire Service When New Unit Joins
Effective as of March 13, 2018, under this new law, a member who is beginning participation in the ’77 Fund, the Unit and member may agree on how to share the cost of acquiring credit in the ’77 Fund for the member’s prior service in the same or similar positon.
Under the old law, when a member began participation in the ’77 Fund, the Unit paid the employer contributions and the member paid the member contributions (6%) for prior service in the same or similar position with that employer.
SEA 27 Cost to Acquire Prior Service
The agreement between Unit and member:
- Can cover the amount necessary to fund prior service
- Can cover amount the police officer or firefighter would have paid
- Both can be paid by unit or member or both
- Not mandatory
The contribution requirements:
- Lump sum or
- Installments not more than 30 years
- Amount and duration is determined by INPRS
- Periods for installments determined by INPRS can differ from the agreement between the unit and member
HB 1537 COLAs and 13th Checks for PERF/TRF and EG&C Members
The legislation regarding COLAs and 13th Checks was passed in 2017 and took effect in 2018.
A PERF, TRF or EG&C member will receive a 13th check by Oct. 1, 2018. The member must be retired or disabled on or before Dec. 1, 2017. He or she must be eligible for a monthly benefit on July 1, 2018. The amount of the check will be based on the member’s years of creditable service at retirement.
- At least five years, but less than 10 years (disability): $150
- At least 10 years, but less than 20 years: $275
- At least 20 years, but less than 30 years: $375
- At least 30 years: $450
A survivor or beneficiary of the member may be eligible for the check. The amount of the check will be distributed in equal shares if the member has two or more survivors or beneficiaries.
HB 1537 COLAs for Judges
Retired Judges' plan members received a 2.1 percent cost-of-living adjustment (COLA) effective July 1, 2017. This includes retired, disabled and surviving beneficiaries of members of the fund.
The COLA benefit increase of 2.1 percent is based upon the state-mandated increase to the salary for actively employed judges and magistrates in positions covered by the Judges’ Retirement System.
HB 1537 COLAs for '77 Fund Members
Retired '77 Fund members will receive a 2.2 percent cost-of-living adjustment (COLA) this year. This includes retired, disabled and surviving beneficiaries of members of the fund.
The COLA for the '77 Fund is linked to the Consumer Price Index (CPI). The INPRS Board of Trustees decides if there has been an increase in the CPI. If there has been an increase, '77 Fund members receive a monthly benefit increase.
SEA 119 '77 Fund Legislation
Under the old law, '77 Fund members could purchase service for actual service performed in military, other than Indiana public retirement funds, and out of state. '77 fund members could not purchase prior service if they served in a comparable role for a municipality in Indiana that was not a '77 Fund employer.
The new section added to the law allows '77 Fund members to purchase prior service under these circumstances:
- Service was performed in Indiana
- Service was in a comparable position
The member must have at least one year of credited service in the '77 Fund. The member must make contributions for the service prior to retirement.
SEA 75 '77 Fund Legislation
The following issues will go to an interim study committee (PMOC):
- Reducing the retirement age from 52 to 50
- The amount of additional retirement benefit that is payable to '77 Fund members increasing from 1 percent to 1.5 percent – the amount for each six months of active service after 20 years.
- Reducing the number of years that can be used to compute benefit from 32 to 28
- Public safety research fund
Changes may be made to the law next year.
SEA 281 Sheriff Department Retirement Plans
The following legislation applies to the Sheriff Department Retirement Plans.
The following law enforcement officers have transferred from PERF to the Sheriff’s Retirement Plan.
Members may transfer their Defined Contribution (DC) to purchase service credit for their prior time in the Sheriff’s Retirement Plan. The PERF employer contributions will remain with PERF and will not be transferred to the Sheriff’s Retirement Plan. Members from Perry County and all other counties, including Warren and Pike, waive PERF service credit when they transfer to the Sheriff’s Retirement Plan.
SEA 373 Pension Supplemental Allowance Reserve Accounts
The following legislation establishes reserves for members of the following plans:
- TRF Pre-‘96
- TRF ‘96
- EG&C and
With the passing of this legislation, the Supplemental Allowance Reserve Accounts do the following:
- Prefund post-retirement benefit increases
- Identical increases across all plans
- Track assets and liabilities associated with post-retirement benefit adjustments
- Segregate contribution rate into portions with and without post-retirement benefit adjustments
After June 30, 2018, post benefit increases will be pre-funded. INPRS will no longer consider post-benefit increases in determination of:
- Normal contributions
- Unfunded accrued liability of DB fund
- Payments necessary to amortize unfunded accrued liability over the next 30 years
INPRS will not consider PBI granted after June 30, 2018 in determining contribution rates for employers.
Actuarial valuations of each fund completed every five years must:
- Segregate amounts for future PBI
- Separately track
- Liability associated with PBI assumption used in actuarial valuation
- Specific assets used to fund PBI
- Granted use of PBI including related experience gains and losses
The INPRS Board has the following duties:
- Set the surcharge rate allocated to future PBI for PERF, TRF ’96 and EG&C
- Determine allocation of appropriations to be included in Pension Stabilization Fund and TRF Pre-’96 reserve account
- LEDB allocation also needed between its assets and reserve account
- Allocate the annual $30,000,000 of lottery revenue between PERF, TRF ’96, TRF Pre ’96 and EG&C
- In even-numbered years, present a report to PMOC regarding the actuarial status of supplemental reserves for each plan
- May not pay PBI unless actuarially pre-funded