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Under state law, a person hired in a PERF-covered position is required to become a PERF member on the first day of employment. PERF requires that employers submit a membership record via ERM by enrolling each new member in the submission unit, prior to the first wage and contribution submission for that member. This means there is no probationary period of employment for any employee, regardless of job description, for determining PERF coverage. The law will not permit an employer to classify an employee as less than full-time for purposes of delaying PERF coverage when the employee is actually performing full-time duties or working full-time hours.

All PERF and TRF (Teachers' Retirement Fund) retirees re-employed in a PERF-covered position after July 1, 2013, cannot be enrolled in a PERF Hybrid position. However, they may be eligible for PERF My Choice depending on the employer's resolution. There are no supplemental hybrid retirements after this date and the member will not be eligible to participate in the fund. If you hired a PERF or TRF retiree prior to July 1, 2013, and that member has remained actively employed in a covered position then they should continue to be reported as they are eligible for a supplemental retirement.

Enrollments in ERM for PERF

Indiana Code 5-10.3-7-10 requires all new membership records be submitted electronically via ERM prior to the first wage and contribution submission for the member. If the member is not enrolled prior to the first payroll submission, the transaction for the member will error out and will not be able to be processed until the member is enrolled in ERM.

• If an employer offers participation in both the Hybrid plan and the My Choice plan there is a 60-day window for new members to make an election to join either plan.

  • Enrollment must be timely to allow the members adequate time for decision-making.
  • Returning PERF members: ERM will default the member into their correct plan election based on previous participation in the fund.

• Social Security Number

  • Verify SSN is accurate.
  • If an SSN is incorrect, do not re-enroll with the correct SSN. Contact the Employer Advocate team for an SSN change prior to completing the enrollment.
  • Fax, paper mail, or in-person delivery ONLY for SSN Cards, I-9 and Driver's License.

Any individual who becomes a full-time employee of the State of Indiana or a participating political subdivision in a PERF-covered position becomes a member of PERF on the date the individual's employment begins, unless the individual is excluded from membership.

As a political subdivision, you choose to join PERF and decide which positions are covered. Per IC 5-10.3-6-1, "Political subdivision" means a county, city, town, township, political body corporate, public school corporation, public library, public utility of a county, city, town, township, and any department of, or associated with, a county, city, town, or township, which department receives revenue independently of, or in addition to, funds obtained from taxation.

You are generally eligible for PERF membership under the following requirements:

• You are a full-time employee who occupies a position normally requiring performance of services of at least 1,000 hours.

• You are employed at a school and work in a PERF-covered position that normally requires more than 600 hours a year.

• The position is a non-excluded position as noted in IC 5-10.3-7.

• The position is specified as a PERF covered position in a resolution passed by the employer's governing body.

• The position cannot be covered by another public retirement or pension plan (except Social Security or the Prosecuting Attorneys' Retirement Fund (PARF), established by IC 33-39-7-9).

Who Cannot Participate in PERF

• Employees hired in the event of an emergency (employment is not permanent and is for a purpose of limited duration).

• Employees who are paid wholly on a fee basis or as an independent contractor.

• Employees who occupy positions covered by your PERF resolution and at the same time occupy positions covered by another retirement or pension plan supported in whole or in part by either the state of Indiana or a participating political subdivision, including:

  • State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers' Retirement Plan
  • Judges' Retirement System
  • Legislators' Retirement System
  • 1977 Police Officers' and Firefighters' Pension and Disability Fund
  • 1953 Police Pension Fund
  • 1937 Firefighters' Pension Fund
  • 1925 Police Pension Fund
  • Sheriff's Pension Trust

• Elected officials of a political subdivision unless the governing body specifically provides for the participation of locally elected officials.

• Employees occupying positions normally requiring performance of service of less than 600 hours during a year who were hired before July 1, 1982, or are employed by a participating school corporation.

• Employees, except employees of a participating school corporation, hired after June 30, 1982, occupying positions normally requiring performance of service of less than 1,000 hours during a year.

• TRF or PERF retirees who re-employ after July 1, 2013.

Your organization has an exciting new option available to increase the value of your INPRS retirement benefits for your employees: Starting July 1, 2026, PERF employers offering both the PERF My Choice and Hybrid Plans can update their resolution with INPRS to allow their employees vested in the PERF My Choice Plan to change their retirement plan membership to the PERF Hybrid Plan.

This Second Chance is not a do-over. Members changing from the PERF My Choice Plan to the PERF Hybrid Plan will retain the funds in their My Choice account and will begin earning service in the PERF Hybrid Plan.

There is no time limit for active employees to make the choice to change their retirement plan membership to the PERF Hybrid Plan or to purchase service in the PERF Hybrid Plan. This Second Chance to choose the PERF Hybrid Plan may improve retention, boost satisfaction, and increase engagement among your employees.

Purchasing Service

Employees may use the funds in their My Choice account to purchase PERF Hybrid Plan service up to the years of participation they earned in the My Choice Plan in full year increments after they have earned one year of Hybrid service. Employers can purchase service for their employees, too. Members are not required to purchase service at any time. Members may choose to purchase service at any time during active employment after they have earned one year of Hybrid service.

Purchasing service may be a significant cost to the employee. INPRS is working to provide a calculator to estimate the cost of purchase, but it is not yet available. For now, encourage employees to use the TRF Service Purchase Calculator, using the "Substitute Teaching" service type to get an approximate one-year estimate. This estimate is not official, but it will give the member an idea of the cost.

For Employees with Prior Hybrid Service

Members with prior TRF and/or PERF Hybrid service credit would retain their years of service. Prior service, purchased service associated with this change, and any newly earned service will combine toward the members' vesting requirement in the PERF Hybrid Plan.

Supporting You and Your Employees

INPRS is here to support you and your employees as they learn about this Second Chance option, complete the necessary form, and consider their service purchase options.

This new option enhances the value and flexibility of your employees' INPRS benefits. Employees choosing the PERF My Choice Plan now have peace of mind that they can move to the PERF Hybrid Plan in the future if doing so aligns with their goals.

You can pull a report in ERM to find out which of your PERF employees are eligible for Second Chance.

Making the Change

Employers must offer both the PERF Hybrid Plan and PERF My Choice Plan to offer this option. Employers must update their resolution to offer this option to their PERF My Choice Plan employees.

Once your resolution has been updated with INPRS to allow this option, your active employees in the PERF My Choice Plan will be able to make this change once they reach vested status in the PERF My Choice Plan.

Your employees are responsible for initiating the change from the PERF My Choice Plan to the PERF Hybrid Plan. To elect Second Chance, they must:

• Follow the instructions on this form (PERF-TRF My Choice Second Chance Member Election (State Form 9900433)), then

• Bring the form to their employer to complete, then

• The employer will be responsible for listing the effective date of the election and submitting the form to INPRS.

You will list the effective date of this election on your employees' form. This date:

• Must be the 1st day of a payroll period, and

• Does not have to be the next payroll period, and

• Cannot be retroactive.

The date must also be before wages and contributions for that cycle are reported to INPRS. If you need help confirming this date, please call the EA Team.

School employees in PERF-covered positions normally requiring work of more than 600 hours and less than 1,000 hours may choose to become a member of PERF. If the employee elects not to become a member upon date of hire, he/she may choose to become a member at a later date. The employee will not be eligible to receive service credit for any time period they elected to not become a member and no employee and employer contributions were reported to PERF.

PERF-covered employees are required by state law to contribute three percent of their gross wages (regular and overtime pay) to the Fund. Effective July 1, 1986, Indiana law required the state of Indiana to pay the three percent contributions for state employees as part of a wage adjustment. Under the law, local units of government and universities have the option of paying their employees' three percent contributions as part of a wage adjustment. Pursuant to Indiana pension law, employee contributions that are not picked up by the employer must be payroll deducted from the employees' wages and paid to PERF.

The three percent contributions made by either the employee or employer are sent to PERF for deposit in an Annuity Savings Account (ASA). These contributions and any accumulated interest credits are distributable to the employee should the employee terminate employment prior to being eligible for benefits. Once an employee with less than 10 years of service terminates employment and his/her ASA has been inactive for 10 years, any investments in the Guaranteed Fund will no longer accrue interest.

PERF can accept pre- and post-tax voluntary contributions from active members subject to certain conditions. For more information, you may access the PERF Member Handbook.

Under state law, vested status is defined as 10 or more years of creditable combined service under PERF or TRF. A member who has attained vested status will be entitled to benefits when meeting the age and service requirements for either early or normal retirement.

An elected county official, whose governing body has provided for the official's participation in PERF, is vested if the official:

1. Has served as an elected county official in an office described in Article 6, Section 2, of the Indiana Constitution (clerk of the circuit court, auditor, recorder, treasurer, sheriff, coroner, or surveyor) for at least eight years; and

2. Is prohibited by Article 6, Section 2, of the Indiana Constitution from serving in that office for more than eight years in any 12-year period.

An elected county official described above who has been elected at least twice and would have served for eight years had the official's term of office not been shortened by a law that makes the terms of office for constitutional county office holders uniform is also vested.

Generally, members who terminate employment with 10 years of service may take a distribution from their ASA account before becoming eligible for benefits and will retain vested rights to a pension benefit when the member becomes age eligible. If the funds are not withdrawn, those funds will be credited with any earned interest until the member initiates a retirement benefit.

If a member is not vested when withdrawing from the fund, the only way a member may reinstate the withdrawn service credit is by returning to work in a PERF-covered position and contributing to the Fund for a period of six consecutive months.

Your employees will receive service credit for each period of continuous employment in a PERF-covered position from the date of hire to the last day in pay status. In addition, they may be entitled to service credit during military service and certain types of leave.

Under Indiana Code 5-10.2-3-1, employees are entitled to service credit if their position was not covered by PERF at the time of employment but came under coverage before Jan. 1, 1985.

The law also allows a member who has past service in a position that was not covered by PERF to earn credit for that service if the position is covered after Dec. 31, 1984, while that member holds that position or another position with the same employer. However, the employer's governing body may include in its PERF resolution a specific date from which prior service for its employees will be computed.

If a prior service credit date is provided in the resolution, any service before that date will not be used in computing benefits. However, Indiana Code 5-10.3-7-7.5 states that service with the employer before the prior service date will be used for the purpose of determining eligibility for benefits.

Employer Certification of Creditable Service

A member who is questioning a service credit amount with a former or current employer is responsible for providing evidence that service was rendered for the time period being questioned with that employer. Once that evidence is provided:

• If the evidence is provided to INPRS and the error is connected to a missing wage and contribution report, the EAT group will contact the employer to have the adjustment completed in the ERM application. Adjustments of service credit only must be handled by INPRS staff.

• If the evidence is provided to the employer, the employer will complete the adjustment in ERM.

Eligibility Service

Eligibility service is service that counts towards vesting to be eligible for retirement but is not used in the retirement benefit calculation.

A PERF Hybrid member is entitled to one month of creditable service for each month the member was employed at least one day in a full-time PERF-covered position, and for which employer contributions are required to be made. PERF Hybrid members cannot receive more than one month of creditable service for the same calendar month.

A member who is employed in a PERF-covered position by a school corporation, state school, university, school city or town who works the full school term or contract period receives credit for one year of creditable service.

Combining PERF & TRF Creditable Service

• Any member with creditable service in both the PERF and TRF will need to elect at retirement whether to receive a benefit from one fund, TRF or PERF.

• Once you elect to receive a pension benefit from one fund, your vested interest will be determined based on combined creditable service.

• You will be credited one year for each year of covered service, no matter how many positions you held at the time of service.

• You will receive a single benefit from that specified fund based on the combined creditable service from both funds.

Members are entitled to six months of creditable leave in any given four-year period. This leave must be approved by the employer and should be reported to PERF via ERM within 90 days after the leave commenced. If a member goes on an unpaid leave of absence for personal reasons, the employer may report it as creditable leave and accept the additional pension liability. However, PERF will only grant six months of service credit.

Except as otherwise required by the Family and Medical Leave Act (FMLA), employers must enter the leave/life event through the ERM application. To submit via ERM, see the Member Management User Manual. The employer must accept pension liability for creditable leaves of absence. Typically, paid leaves are considered creditable. During a qualifying paid leave of absence, both employer and employee contributions must be made and creditable service will be granted to the extent permitted by law.

Workers' compensation leaves are always creditable. Service credit is granted for the full extent of the leave.

Family and Medical Leave Act (FMLA)

Under Indiana Code, IC 5-10.3-7-6, an employee may receive credit for up to 12 weeks of leave (paid or unpaid) taken during a calendar year under the Family Medical Leave Act (29 USC 2601, et. seq.). Generally, service credit granted for this leave is used only for the purposes of determining eligibility and not for calculating benefits.

Adoption Leave

An employee is entitled to up to one year of service credit for Adoption Leave (paid or unpaid).

Purchase of Out-of-State Service

Indiana Code IC 5-10.3-7-4.5 provides for the purchase of out-of-state service credit with the Public Employees' Retirement Fund. In order to qualify for the purchase of this credit, the member must meet the following criteria:

• Have at least one year of service in a PERF-covered position.

• Prior service in another state must be in a comparable position that would be creditable service if performed in Indiana.

• The member is no longer eligible to use those years to claim a retirement from any other retirement system.

If you have a member who meets the criteria above and is interested in purchasing credit for out-of-state service, please instruct the member to fill out the Purchase Out-of-State Service form.

Employer Contributions (ER Share)

Employers are required to contribute these contributions at an actuarially determined rate. This rate is re-evaluated annually and usually is given to employers by Dec. 31 of the fiscal year two years prior to the fiscal year to which it applies. The contributions are made to fund the employer's pension obligations; these contributions do not fund individual employee accounts. The amount is expressed as a percentage of gross payroll. The employer's contribution rate may change from year to year depending upon the Plan's current pension obligations and funding status. This employer contribution rate is in addition to the three percent mandatory member contributions.

Mandatory Member Contributions

State law requires 3% of gross covered wages (W-2 reportable wages — regular and overtime) be contributed to PERF Hybrid to fund the member's Defined Contribution (DC) Account. Employers have the option of paying these mandatory 3% contributions on behalf of the member, as a pre-tax salary reduction, or have the member pay them as post-tax salary reduction. Additionally, the employer has the option to 'split' how the contributions are paid between all three options as long as the total deduction equals 3% and is reported under the correct tax basis.

PERF Hybrid Plan

The current composite rate is 11.2% and continues through June 30, 2026. As allowed by Senate Enrolled Act 549, this rate pertains to all PERF employers for fiscal years 2025 and 2026.

PERF My Choice Plan

The current PERF My Choice Plan contribution rate for both State of Indiana and local government employers is 11.2% and will remain at 11.2% through June 30, 2026.

The breakdown of the 2025 contribution rate for State of Indiana My Choice Plan employers is 4.2% for normal cost and 7.0% for amortization of the unfunded liability, effective July 1, 2024, through June 30, 2025. The breakdown of the My Choice State of Indiana rate for 2026 will be 4.4% for normal cost and 6.8% for amortization of the unfunded liability from July 1, 2025, to June 30, 2026.

For Local Government (political subdivisions), employers choose how much to contribute to employee accounts, from 0% up to the normal cost of the fund. Beginning Jan. 1, 2025, the normal cost is 4.2% through Dec. 31, 2025. The normal cost as of Jan. 1, 2026, will be 4.4% through Dec. 31.

In addition, political subdivisions must make a supplemental contribution toward the fund's actuarial unfunded liability. The contribution rate is 7.0% through Dec. 31, 2025, and will be 6.8% through Dec. 31, 2026.

Specific Elected Official positions as outlined in Indiana Code have an 8-year fully vested schedule.

A person in an elected position who turns at least age 55 and has 20 or more years of PERF Hybrid-covered service credit can begin receiving a pension benefit while continuing to work in an elected position covered by PERF Hybrid, but must make the election while holding the elected position. If the member chooses to begin receiving a monthly pension benefit while working in a PERF Hybrid-covered position they will not earn additional service credit toward retirement and the member must make an election to continue or discontinue additional member contributions to the DC account.

Retired members must separate from employment for more than 30 days and cannot have a pre-existing agreement with their employer to return to work, or the member's retirement will be void and the member will be required to pay back any pension payments that have been paid to them. Millie Morgan and Elected Officials are exempt from this requirement.

If a member is retired from PERF or TRF and returns after 30 days to a PERF-covered position, the member cannot participate in the PERF Hybrid a second time. If the employer offers the PERF My Choice Plan and has elected to allow re-employed retirees to participate in the My Choice through a signed resolution with INPRS, the re-employed retiree may elect to join the PERF My Choice Plan.