What would you do for an extra $23,000 in retirement?
Earning an extra $23,000 may be easier than you think, and it all starts with your INPRS Defined Contribution (DC) account. Your DC account is part of your INPRS benefit. You, your employer, or both set aside a portion of your income to invest for use during your retirement years. You get to choose your investments in this account and can update your choices at any time on your secure online account.
The easiest way to help your money work harder for you is to pay close attention to the fees on the DC investments you select. With INPRS, you can see the fees associated with your investment choices on the investment fact sheets we provide on our website.
What you may not know is that, with INPRS, your money is already at an advantage:
INPRS’s DC lineup is almost 60% less expensive than similar retail offerings
As an example, for every $1,000 invested in an INPRS Target Date Fund, your INPRS investments are charged $0.82 to $0.99 in fees per year.
If you had that same $1,000 invested with a similar version from a leading retail provider, the fees could be anywhere between $4.70 to $7.50. *
The more money charged in fees means the less money you have invested and earning compounding returns.
For example, if you invested $1,000 each year for 40 years and assume an 8% gross rate of return, your account balance at the time of your retirement would be vastly different based on your investment firm choices:
INPRS Target Date Fund (0.10% annual fee): $252,000
Competition Target Date Fund (0.47% annual fee): $229,000
By investing in a lower-cost investment option like your INPRS DC account, your money could earn more for you each year. The investment choices you make today can make a significant difference in your account balance when you approach your retirement date. Plus, if you leave INPRS-covered employment, you can keep your money in your INPRS DC account and enjoy the benefits of our low fees while your money continues to be invested.
To review your investment choices and account performance, log on to your account at www.myINPRSretirement.org.
*$4.70 to $7.50 in fees is provided as a comparison to the fee range for an active Fidelity target-date fund at 0.47% to 0.75% as of 5/30/2020.
The information in this publication is for educational use and should not be considered financial or investment advice. For financial and investment advice specific to your situation, please contact a financial advisor. All investments involve risk and may be subject to loss- invest wisely. Think before you act! Before you make a life-changing decision about your retirement, please contact INPRS at (844) GO-INPRS or (844) 464-6777.
2020 INPRS Annual Report
The most recent Comprehensive Annual Financial Report (Annual Report) is now available. Inside you will see INPRS’s most up-to-date membership data, investment returns, and more.
View the Annual Report and other INPRS related resources by visiting www.in.gov/inprs.
Virtual retirement planning opportunities from INPRS
If you think planning for and saving for retirement are confusing, you are not alone.
No matter your age or goal, INPRS’s Retirement and Financial Education team is here to help you plan for your ideal retirement. Start your plan today by attending one of our PERF and TRF webinars. From our webinars, you will learn:
How your plan works;
What retirement benefits and options are available;
Important information to help you plan for retirement;
Answers to your benefit plan and retirement questions.
Basic PERF and TRF webinars are available every Tuesday. PERF and TRF pre-retirement webinars are available every Wednesday.
To register, visit https://bookwithinprs.timetap.com/.
How to prioritize and save for multiple goals
Are you paying down student loans but want to save for a down payment on a house? Do you want to take a vacation next winter but know you need to build your emergency fund? Are you considering retirement?
It is rare to not need to save for multiple goals at once. And, assuming you are not sitting on a winning Powerball ticket, it is also rare to have enough money to cover everything you might want. Prioritizing where you put your savings is one of the most important financial planning decisions you can make, and there are several potential pitfalls.
To read more, check out this article from our recordkeeping partners, Voya Financial: https://blog.voya.com/financial-decisions/setting-goals-help-you-save-your-best-life.
Important updates from Senate Enrolled Act (SEA) 10 effective January 1
Effective January 1, 2021, active members of LE DC, PERF Hybrid, PERF My Choice, TRF Hybrid, and TRF My Choice may take in-service distributions of your defined contribution accounts if they meet specific requirements. To qualify:
LE DC members must be at least 59 ½ years of age.
PERF Hybrid and TRF Hybrid members must also be at least age 59 ½ and meet age and service eligibility for normal retirement to qualify.
PERF My Choice and TRF My Choice members must be at least 62 years of age and have five qualifying years of service.
Active members may withdraw all or part of the balance in their defined-contribution accounts without benefit consequences and without separating from a covered position.
Additionally, PERF and TRF members who are age and service eligible for normal retirement no longer have to wait 30 days after separation from a covered position to withdraw an amount from the member’s defined contribution account.
View your online member handbook or contact our Member Advocate Teams at (844) GO-INPRS or (844-464-6777) for more information.
Time to review your TRF Plan
For teachers, the beginning of a new calendar year can be just as busy as the first day of school.
Whether teaching in a classroom or virtually, teachers like you go above and beyond for their students. However, when you can steal away a few minutes for a break, INPRS would like to suggest that you use that time to review the TRF benefits you are earning as an educator.
Here’s a great place to start:
New teachers have the choice between two retirement options; the traditional TRF Hybrid plan- a defined benefit plus a defined contribution account; or the My Choice: Retirement Savings plan- a defined-contribution only plan, which you selected when you were hired. No matter which plan you chose, you have a defined contribution (DC) account. Teachers hired before July 1, 2019, were enrolled in the TRF Hybrid plan, the only option offered at that time.
The way you invest can make a significant impact on your account balance when you retire. We encourage you to become familiar with your account, select investments that make sense with your goals and review them annually. To do so, log on to your account at www.myINPRSretirement.org.
INPRS offers eight different investment options, including Target Date Funds, Large Cap Equity, Small/Mid Cap Equity, and more.
In some cases, you may be able to roll over other retirement plan balances or money you have earned and saved from other jobs into your INPRS plan. This move can streamline your accounts and save you money long-term.
INPRS is a non-profit organization. Our sole purpose is to help you on your road to and through retirement, not make a profit.
You can find videos, educational resources, and plan fact sheets at https://www.in.gov/inprs/teachers.htm.
For additional questions and information regarding your TRF plan, please contact our Member Advocate Teams at (844) GO-INPRS or (844-464-6777).
New rates approved by INPRS Board
The INPRS Board of Trustees approved new rates for several of INPRS’s plans during the October 30, 2020 board meeting.
Total Employer DB Contribution Rates Effective January 1, 2022 (Calendar Year 2022)
2021 | 2022 | |
|---|---|---|
Prior | New | |
PERF DB Political Subdivisions | 11.20% | 11.20% |
'77 Fund | 17.50% | 17.50% |
EG&C | 20.75% | 20.75% |
LE DC | 14.20% | 14.20% |
There were no changes to these total contribution rates from the prior valuation.
Total Contribution Rates Effective July 1, 2021 (Fiscal Year 2022)
2020 | 2021 | |
|---|---|---|
Prior | New | |
PERF DB State | 11.20% | 11.20% |
TRF '96 DB | 5.50% | 5.50% |
There were no changes to these total contribution rates from the prior valuation.
Supplemental Reserve Accounts
The INPRS Board approved the following surcharge rates for the supplemental reserve accounts, starting January 1, 2021:
2020 | 2021 | |
|---|---|---|
Prior | New | |
PERF DB | 0.44% | 0.44% |
TRF '96 DB | 0.14% | 0.14% |
EG&C | 0.61% | 0.85% |
The PERF and TRF ’96 surcharges are unchanged from the calendar year 2020. However, the EG&C surcharge increased from 0.61% to 0.85% due to the decrease in EG&C payroll from the prior year.
The lottery revenue ($30,000,000 per year) is currently arriving in $2,500,000 portions per month allocated to the TRF Pre-’96 supplemental reserve account. For the first time, this legislative session and the biennium that follows utilize the supplemental reserve accounts to pay a 13th check or COLA.
The INPRS Board has the authority to allocate the lottery revenue to any of the five supplemental reserve accounts. The INPRS Board may need to allocate funding to different accounts to balance the funds and pay a legislated post-retirement benefit increase. The board indicated they want to revisit this topic in February 2021.
My Choice Funds
In addition, the INPRS Board approved the following rates for the My Choice funds:
PERF State (FY 2022) | PERF Political Subdivisions (CY 2022) | TRF '96 (FY 2022) | |
|---|---|---|---|
Member Contributions | 3.0% | 3.0% | 3.0% |
Employer Contribution Credited Member's Acount | 3.2% | 0.0% - 3.9% | 5.3% |
Employer Contribution Credited to Unfunded Actuarial Accrued Liability | 8.0% | 7.3% | 0.2% |
The employer contribution credited to the member’s account is equal to the normal cost of the relevant defined benefit plan liabilities, rounded down to the nearest 0.1%. For this purpose, political subdivisions can contribute any amount up to the normal cost, including 0%. The only changes in this chart from the prior year are that the PERF political subdivision’s normal cost rate was 4.0% and decreased to 3.9%. This caused an increase in the UAAL rate from PERF political subdivisions from 7.2% to 7.3%.