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Destination: Retirement - Spring 2021 (PERF TRF and LE DC)

Boost your retirement income with your INPRS DC account

With your INPRS defined contribution (DC) account, you’re in control of how you invest your retirement money.

Formerly known as the Annuity Savings Account (ASA), your INPRS DC account is funded by a mandatory 3% contribution made by you, your employer, or a combination of both. You may also contribute additional money if the option is available through your employer.

With the DC account, you can change your investment options whenever you want.

You can choose one of INPRS’s target date funds, which become more conservative as you get closer to retirement, leaving you with little to do but relax about your investments, and work of course. Check out the other options available in the “Three things to consider when you invest” article, also in this newsletter.

When you were hired, you either made an election from the available investment options or defaulted to a target date fund. Older DC account members were defaulted into the former Guaranteed Fund (GF), then moved to the Stable Value Fund unless the Target Date Fund was directly chosen when the GF ended. If you have not revisited this election, take the time to learn more about the DC options available to help you make sure you meet your retirement goals.

If you decide to separate from a PERF-or TRF-covered position or become disabled, you can withdraw the funds from your DC account. You may also elect to:

  • Leave the balance in your DC account invested with INPRS,
  • Take a lump-sum distribution, * or
  • Roll your balance over to a qualified plan or eligible retirement account

When you retire, you can choose any of those options, plus you can:

  • Annuitize your account for a guaranteed lifetime income, or
  • Defer distribution

Log in to your account at www.myINPRSretirement.org to review your current investments.

If you have questions, please contact our Member Advocate Team at (844) GO-INPRS or (844-464-6777) or email us at questions@inprs.in.gov.

*Early withdrawal penalties may apply. Please check with your trusted tax advisor.

Compare your distribution options in retirement

You have the potential to make retirement the next exciting chapter in your life. Are you ready?

So how do you convert your retirement savings into income?

There are a few ways to structure your payments when you are ready to create an income stream. Learn how to create your retirement savings vehicles and understand how to maximize the benefits without drawing too much income too soon.

To read more on distribution options available through employer-sponsored plans, check out this article from our recordkeeping partners, https://blog.voya.com/retirement/compare-your-distribution-options-retirement.

Source: Voya Financial

INPRS can help with your retirement strategy

Whether you are new to INPRS, mid-career, or nearing retirement, we want to help you meet your financial and retirement goals.

INPRS offers many resources to help you on your journey toward retirement. Not sure where to begin? One of the best ways to get started is by registering for a workshop or counselingRegister for workshop or counseling session. Learn more about:

  • Investment basics,
  • Retirement plan features, and
  • Budgeting to build positive money habits

On-demand workshops are now available. Members can watch and listen to pre-recorded webinars on-demand any time or day.

To register, visit: https://bookwithinprs.timetap.com/.

Three things to consider when you invest

Choosing your investment options may seem overwhelming, but we’d like to challenge traditional thinking. Instead of choosing your investments and hoping they work out, begin thinking about your investment philosophy. If you don’t have one, the below concepts can help you get started:

  1. Portfolio diversification – Spreading contributions among different types of investments to reduce overall risk.
  2. Time Horizon – How old are you? Members under age 30 may be able to afford to take on more market risk because they have more working years ahead of them. Members closer to retirement may want to reduce investment risk to plan for their impending need to access their account balance.
  3. Risk Tolerance – Do your palms get sweaty just thinking about your account balance going down? You may be more risk-averse and could be more comfortable with investments that don’t fluctuate as much. Do you see falling share values as just a sale on your investments? You may have a higher tolerance for risk and be comfortable with a more aggressive investment lineup. No matter your comfort level, you can choose what feels right for you and your future.

INPRS offers target-date funds that adjust with you as you work. Starting more aggressive while you have lots of years ahead of you and becoming more conservative as you near retirement eligibility. In addition to target-date funds, you can select from the following options:

  • Large Cap Equity Index Fund
  • Small/Mid Cap Equity Fund
  • International Equity Fund
  • Fixed Income Fund
  • Inflation Linked Fixed Income Fund
  • Stable Value Fund
  • Money Market Fund

For further information on retirement benefits plans and investment options, check out Investing 101 online. Look at our investment fact sheets and take our Risk Tolerance Quiz for help determining which investment fund may work best for you.

For questions regarding your DC account or the various investment funds, please contact our Member Advocate Team at (844) GO-INPRS or (844-464-6777) Monday through Friday from 8 a.m. to 8 p.m. EST, or feel free to email us at questions@inprs.in.gov.

Highlights from the 2020 Annual Report

Check out INPRS’s financial status by viewing the most recent Comprehensive Annual Financial Report (Annual Report). Inside, you’ll read about our performance for the fiscal year ended June 30, 2020. Below are a few highlights:

  • On June 30, 2020, INPRS reported a total fund market value of $36.9 billion, an increase of $0.8 billion from the prior year.
  • Supplemental Reserve Accounts (SRAs) on June 30, 2020, totaled $105.3 million.
  • Consolidated Defined Benefits assets returned 2.6 percent net of all fees over the past fiscal year. Despite the unforeseen impact of COVID-19, all asset classes (apart from commodities) posted positive returns for the fiscal year. The consolidated defined benefit portfolio also outperformed its passive benchmark by 0.5 percent.
  • All Target Date Funds had a positive return, with all returns exceeding the benchmark. Returns for the 2060 Fund to the Retirement Fund ranged from 4.3% to 8.0%. The more diversified and conservative the target date fund, the larger the returns given the volatility introduced by the COVID-19 pandemic into the marketplace.
  • For non-target date funds, six of the seven investment options met or exceeded the benchmark (Large Cap Equity Index Fund, International Equity Fund, Fixed Income Fund, Inflation Linked Fixed Income Fund, Money Market Fund, and Stable Value Fund).
  • Retirement rates were generally lower for PERF DB, TRF Pre-’96 DB, and TRF ’96 DB.
  • INPRS was awarded the Public Pension Standards Award for Funding and Administration by the Public Pension Coordinating Council for the ninth consecutive year for the fiscal year ended June 30, 2020.
  • INPRS received the Certificate of Achievement for Excellence in Financial Reporting, the highest recognition in governmental accounting and financial reporting, for the eighth consecutive year from the Government Finance Officers Association of the United States and Canada (GFOA).

Learn more about INPRS’s achievements, actuarial reports, contribution rates, investment holdings, pension funds, and defined contribution plans by viewing the 2020 Annual Report.

The truth about fees

You pay two types of fees as an INPRS member- an administrative fee and an investment fee usually referred to as expense ratios. We know that no one likes to pay fees, but it’s important to understand what fees you are paying and why. Here is what you need to know about administrative fees and expense ratios:

Administrative Fees
Expense Ratios / Investment Fees
  • PERF, TRF, and LE DC plan members pay administrative fees to cover the costs associated with managing their DC accounts.
  • Administrative fees are $3.75 each month and are deducted directly from your DC account. You can view this deduction on pages one and three of your quarterly member statement. For members of the PERF or TRF Hybrid plan, the fee detail is located on page three of your annual member statement.
  • Internal Revenue Service (IRS) regulations require plan expenses to be paid directly from members’ DC accounts.
  • INPRS’s member fee policy outlines the methodology used to determine administrative fees. You can find the fee policy online here.
  • There is an “expense ratio” associated with each INPRS Defined Contribution (DC) Plan investment option. An expense ratio measures how much you’ll pay over a year to own an investment option. An expense ratio is expressed as a percentage for each.
  • When you look at your DC account, your online statement will show you how much money you gained or lost, net of fees. Your investment option(s) already subtracted all expenses before reporting how much you gained or lost.
  • INPRS’s expense ratios are significantly lower than retail investment offerings. For example, an INPRS member working for ten years starting at age 30 could have over $10,000 more in their DC upon retirement than a retail investor with higher fees on the same investment amount and length of time. *

While fees aren’t the most fun thing to pay, you can rest assured that INPRS remains committed to operating with an efficiency that will permit these fees to stay low. To view your investment options and their expense ratios, please log on to your secure online account at www.myINPRSretirement.org.

* Example assumes a $1,000 annual investment for ten years at year-end, starting at age 30 and investing until age 65. Both scenarios assume an 8% return with an INPRS return of 7.9% net-of-fees and a competition return of 7.53% net-of-fees. The rate of return is an assumption and is not a guarantee of performance.

Mortgage relief deadlines extended

Mortgage relief deadlines extended

Many homeowners experiencing difficulty making mortgage payments now have more time to seek forbearance and avoid foreclosure with new deadline extensions.

The COVID hardship mortgage forbearance and a temporary halt to foreclosures are two protections available to homeowners with mortgages backed by federal government agencies or the government-sponsored agencies, Fannie Mae, and Freddie Mac.

If you’re seeking mortgage relief and your mortgage isn’t from a government agency, you can see if you are eligible for forbearance to avoid foreclosure. If you need help, call your servicer to learn what options are available to you.

For more information, visit: http://bit.ly/2P275n9.

Source: Consumer Financial Protection Bureau

Every attempt has been made to verify that the information in this publication 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.

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