A-Z Index | Forms

Eligibility

Election Period

Retirement Incentive Benefit

Returning to IU Employment

Obtaining More Information

Forms to Complete

Normal PERF Retirement Benefit Provisions (with examples)

Forms:

Request for Estimate form

Resignation and Election form

See Also:

Frequently Asked Questions (FAQs)

IU PERF ERI

General Information

Indiana University is pleased to offer this one-time “window” early retirement incentive for certain employees currently covered by the PERF retirement plan. This is an opportunity for eligible employees to retire earlier than they would otherwise have considered, with a significant increase in PERF Pension benefits payable for the participant’s life.

The election of this early retirement incentive is strictly a voluntary option for employees. It is expected that all eligible employees will have a fair opportunity to consider this incentive, that employees will not be coerced in any way to enroll, and will not be denied this opportunity.

The following provisions apply to this early retirement incentive (provisions of normal PERF retirement benefits are included toward the end of this document):

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Eligibility Criteria:

To be eligible for this early retirement incentive, the employee must satisfy all of the following criteria:

1. Be an active IU employee on January 1, 2004, currently covered by the PERF retirement plan, and
2. be at least age 55 on the date of retirement from IU, and
3. have completed at least 15 years of PERF-covered service as an IU employee as of the date of retirement from IU, and
4. elect to retire and resign from IU between January 1, 2004, and June 30, 2004.

The “15 years of PERF-covered service” requirement excludes any PERF service purchased under this incentive or by the employee.

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Election Period:

Eligible employees must submit an IU PERF Early Retirement Incentive and Resignation form to the University Human Resource Services office no later than March 31, 2004.

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Retirement Incentive Benefit:

Eligible employees electing this early retirement incentive will receive: one (1) additional year of PERF service credit for every five (5) years of PERF covered IU service, plus any remaining partial five-year period will receive prorated service credit as follows: one (1) year: an additional three (3) months of PERF service two (2) years: an additional five (5) months of PERF service three (3) years: an additional eight (8) months of PERF service four (4) years: an additional ten (10) months of PERF service Only whole years of PERF-covered service at IU will be used in this calculation.

These additional years of PERF service will be used to calculate PERF Pension benefits, and may be used to satisfy the PERF minimum service requirement for full pension benefits.

Examples of the additional benefits associated with this retirement incentive are included below.

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Returning to IU Employment:

Individuals electing this early retirement incentive may not return to IU employment for 90 days from their date of retirement. Individuals returning to IU employment (in any capacity, including Hourly) within 90 days from the date of their retirement will have to repay IU for the cost of additional years of PERF service purchased.

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Obtaining More Information About this IU PERF Early Retirement Incentive:

Eligible employees may obtain more information by attending an information session to be held in December 2003 and January 2004—see the below schedule.

The Frequently Asked Questions file will also provide very useful information.

Campus information sessions; each will last for approximately one hour:

Monday, Dec. 15	IUB, IMU Georgian Room	9:00a.m.	11:45a.m.	3:00p.m.
Friday, Dec. 19	IUB, IMU Georgian Room	9:00a.m.	11:45a.m.	3:00p.m.
Monday, Jan. 12	IUB, IMU Dogwood Room	9:00a.m.	11:45a.m.	3:00p.m.
Tuesday, Dec. 16	IUPUI, School of Nursing, Room 108	10:00a.m.	2:00p.m.	4:00p.m.
Thursday, Dec. 18	IUPUI, University Library Auditorium	9:00a.m.	11:30a.m.	2:00p.m.
Tuesday, Jan. 13	IUPUI, Cancer Research Institute, Room 101	9:00a.m.	11:30a.m.	2:00p.m.
Wednesday, Dec. 17	Regional Campus Video Conference	10:00a.m. (central Indiana time) (check with campus Human Resources offices for videoconference locations)

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Forms to Complete for this IU PERF Early Retirement Incentive:

1. IU PERF ERI Request for Estimate Form—is used to indicate interest in this early retirement incentive and to obtain an estimate of PERF benefits, with and without the IU PERF ERI. This form must be returned through campus or U.S. mail to:
   
             W. Jack Hudson
             University Human Resource Services (UHRS)
             Indiana University
             400 E. Seventh Street
             Bloomington, IN 47405
   
   This form should not be sent directly to the PERF Agency. (UHRS must endorse this form and supply additional information before the PERF Agency can provide this estimate of PERF benefits.)
   
   The estimate of PERF benefits will be mailed to the participant’s home address within 30 days. It should be retained for any appointments with Human Resources’ personnel; UHRS will not receive a copy of this estimate from the PERF Agency.
2. IU PERF ERI Election and Resignation Form—is used to indicate the employee’s intention to retire under this early retirement incentive and terminate from Indiana University. Once completed and delivered to UHRS, this personnel action cannot be withdrawn or amended without the consent of Indiana University.
   
   The form must be returned to W. Jack Hudson at the above address. UHRS must authorize each PERF Retirement Application, indicating the final retirement date, the IU PERF Incentive option, and must verify final payroll and terminal pay information.
   
   Note: To take advantage of this early retirement incentive, this form must be received by UHRS by March 31, 2004.
3. PERF Retirement Application Form (normal PERF application form)—is used to provide the PERF Agency with other relevant information needed for normal PERF benefits. This form must be completed, and along with other necessary documents, forwarded to a campus human resources office for verification of IU employment and PERF service data. After completion by a campus human resources office, this form should be forwarded to UHRS for final authorization. (UHRS will verify the election of the IU PERF ERI option and final payroll and terminal pay information, and then forward the form to the PERF Agency.)
   
   The PERF Retirement Application form is available at campus human resource offices or from the PERF Agency at 888-526-1687.

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Normal PERF Retirement Benefit Provisions

The PERF retirement plan consists of two separate and distinct benefit provisions: an Annuity Savings Account benefit and a Pension benefit. (The following information is intended to provide highlights of the PERF retirement plan, without going into extensive details.)

Annuity Savings Account benefit is the associated account balance, which is the result of IU contributions equal to 3 percent of total salary, plus any associated investment performance.

• This account balance is reflected on quarterly statements from the PERF Agency.
• Participants are 100 percent vested in this account balance at initial plan enrollment.
• At retirement, participants can convert this account balance to a monthly payment for life or elect a lump-sum withdrawal.
• This benefit is in addition to the below Pension benefit, which generally provides a more significant benefit.
• The IU PERF Early Retirement Incentive does not have any impact on this benefit.

Pension benefit is a life-time monthly payment, based on the participant’s Years-of-PERF-Service Credit times Average Salary times 1.1 percent divided by 12 months:

• Monthly Pension = PERF service X Average Salary X .011 / 12 months
• Average Salary equals the average of the five highest years of salary while covered by the PERF retirement plan.
• Participants become 100 percent vested after 10 years of PERF service.
• Normal benefits are available based on the participant’s age and PERF service:
  • At least age 65 with at least 10 years of PERF service
  • At least age 60 with at least 15 years of PERF service
  • At least age 55 where the combination of age and PERF service equals at least 85
• Reduced benefits are available when the participant is at least age 50 with at least 15 years of PERF service.
• The IU PERF Early Retirement Incentive will increase PERF service for the Pension calculation, as well as apply to the determination of “normal” or “reduced” benefits.

Example 1: PERF Pension benefit for an employee with 27 years of PERF service from IU, who is age 62 and an Average Salary of $32,000; where “normal” benefits would apply. Monthly Pension benefit without the early retirement incentive equals $ 792 (27 years X $32,000 X .011 / 12 months) Monthly Pension benefit with the early retirement incentive equals $ 951 (32.42 * years X $32,000 X .011 / 12 months) * The early retirement incentive adds 5.42 years of PERF service. In this example, the early retirement incentive resulted in an additional $159 per month of pension payment for life; a 20 percent increase in benefits.

      

Example 2: PERF Pension benefit for an employee with 25 years of PERF service from IU, who is age 58 and an Average Salary of 38,000; where “reduced” benefits would normally apply. Monthly Pension benefit without the early retirement incentive equals $ 731 (25 years X $38,000 X .011 X .84 age reduction / 12 months) Monthly Pension benefit with the early retirement incentive equals $ 1,045 (30 * years X $38,000 X .011 / 12 months --- no “age reduced”) * The early retirement incentive adds five years of PERF service. In this example, the early retirement incentive resulted in an additional $ 314 per month of pension payment for life; a 43 percent increase in benefits.

In both examples, the monthly PERF Pension benefit is in addition to the PERF Annuity Savings Account and any Social Security benefit payments.

Participants should plan on the PERF Agency taking approximately three to four months to process the first retirement payment. This first payment will include a retroactive amount effective from the date of retirement. This first payment will also include any Annuity Savings Account settlement.