Changes to Teachers Retirement Fund

I. Current structure of Retirement Fund a. Divided into two parts: i. Defined Benefit 1. Contribution comes entirely from the school corporation 2. This is the major portion of a teachers retirement benefit ii. Annuity Fund 1. Usually funded by the school corporation, but can be funded by teacher contribution or combination of teacher and school corporation 2. Ways to use at retirement a. Roll over i. Into a separate annuity owned by teacher ii. TRF fund b. Lump sum payment c. Choice can be deferred for a period of years d. Can be used as part of teachers monthly paid out by INPRS 3. Teacher currently has control of this option and can choose how it is invested (Guaranteed fund or more aggressive growth fund) Proposed Changes a. Defined Benefit Plan i. Update mortality tables used to calculate benefit ii. Align PERF and TRF benefits iii. Could result in minor decreases in future retirement benefits; probably between .1 to 1.1% decrease b. Annuity Plan i. Current rate set at 6.75% interest on investments in Guaranteed fund ii. Plan to go to market rate which is currently around 4.5% iii. Could result in major decrease in retirement benefits c. General information i. These changes will not affect individuals who are already retired ii. As of now (9/9/13) changes are set to take effect on June 30, 2014. iii. INPRS Board to meet this Friday, Sept. 13, 2013 to decide whether to extend implementation date to August 1, 2014. Talking Points: Implementation date needs to be changed to August 1, 2014 to ensure that teachers retiring this school year stay on the old rates If the June date remains, teachers retiring this school year would have their benefits reduced by the new formula if they teach even one day in June 2014. Retirement is a major decision and teachers need time to make a decision based on accurate information. At the current time, the online calculator is

II.

not accurate as to the annuity portion of the retirement benefit (if it is even working). State law requires that a teacher work 120 days in order to get a full years credit for retirement. For most school districts this will mean that teachers could retire on or around March 1st and still get full credit for this year. If the date is left at June 30, 2014, many teachers might opt to retire before the end of the school year, causing major problems for the School Corporation and students.

Teachers and other school employees need to call INPRS Board members and State Legislators immediately before the INPRS Board meeting. Find board at: http://www.in.gov/inprs/board_of_trustees.htm **Brian Abbott babbott@hccsc.k12.in.us Randy Brown Randy.brown@wellpoint.co m **Michael Pinkham mikepinkham@aol.com Chris Atkins catkins@gov.in.gov Ken Cochran kcochran@samcoinc.us **Ms. Klye Rosebrough krosebrough@msdpt.k12.in. us Tim Berry tberry@auditor.in.gov Judi Golden jgolden@tos.in.gov Bret Swanson bret.swansom@gmail.co m

Sign up for INPRS Retirement Member Newsletter at: http://www.in.gov/inprs/index.htm Changes that may impact.... at http://www.in.gov/inprs/2817.htm