As of Jan. 1, 2018, INPRS’s Annuity Savings Accounts (ASAs) will be categorized as separate defined contribution (DC) accounts, according to Internal Revenue Service (IRS) definitions, and are required to have plan expenses paid directly from the DC account.
At a board meeting on Friday, Oct. 27, 2017, INPRS’s Board of Trustees approved a $36 annual administrative fee in compliance with IRS regulations. This change will be effective beginning Jan. 1, 2018.
Members with active Annuity Savings Accounts (either accepting contributions or earning interest) in the PERF Hybrid Plan and TRF Hybrid Plan will be impacted by this change. Active members in the LEDC plan are also included in this change.
Members in these plans have received direct communication from INPRS regarding these fees, including the expected amount of fees and when they will first be charged to members’ accounts, which will occur in February 2018.
Further information about the administrative fees can be reviewed in INPRS’ member fee policy. This policy outlines the methodology the organization uses to determine administrative fees.
Also, you may visit INPRS’s YouTube page to review a video about the upcoming fees. To access the video, please visit https://www.youtube.com/watch?v=EoHMed8oeiU
Below are answers to questions you may be asking about fees:
Why is INPRS going to charge administrative fees?
When annuity savings accounts are separate DC accounts, administrative fees can only be paid from the DC account – they cannot be paid from the pension fund.
The administrative fee will be $3. This fee will be charged to member accounts on a monthly basis, for an annual charge of $36.
INPRS’ peers charge $50-60 per year. It is important to know that these fees are not new, rather, the source of payment is.
Can you give me an idea of what the administrative fees cover?
Administrative fees will cover the costs associated with external record keeper fees, transition costs associated with record keeping and INPRS internal DC administrative expenses.
I read that INPRS’ Annuity Savings Accounts are now being managed by MetLife. Is this true?
No. INPRS continues to manage members’ annuity savings accounts (ASA - the portion of a members’ benefit which receives contributions from employers, employees, or both, and is invested based on the members’ choices). These accounts have not been transferred to MetLife.
Beginning in 2018, retiring INPRS members wishing to annuitize the balance of their ASA have the option to purchase an annuity through MetLife or any other provider of their choosing. Currently, INPRS has the ability to issue annuities to their members directly and will no longer do so after Jan. 1, 2018.