Most retirement benefits to public employees in Indiana are administered through the Indiana Public Retirement System (INPRS), which was created through legislation that merged the Indiana Public Employees Retirement Fund and the Indiana Teachers' Retirement Fund effective July 1, 2011. INPRS also administers and manages:
1977 Police Officers’ and Firefighters’ Pension and Disability Fund (1977 FUND)
State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers’ Retirement Plan (C&E)
Judges’ Retirement System (JRS)
Legislators’ Retirement System (LRS)
Prosecuting Attorneys’ Retirement Fund (PARF)
And INPRS oversees three non-retirement funds:
Pension Relief Fund - created by the Indiana General Assembly in May, 1977, to address the unfunded pension obligations of the police officers' and firefighters' pension systems of Indiana's cities and towns. INPRS is not responsible for the administration of those local pension funds addressed by the Pension Relief Fund. Those local funds have been closed to new membership since the creation of the 1977 Police Officers' and Firefighters' Pension and Disability Fund.
Public Safety Officers’ Special Death Benefit Fund
State Employees’ Death Benefit Fund.
The Public Employers' Retirement Fund (PERF) administers pension and other benefits to nearly all public employees in the state. PERF provides coverage for more than 90 percent of all active members. The fund is a hybrid plan, which features a defined benefit component funded with employer contributions and a defined contribution component funded with employee contributions. In 1996, Indiana voters approved for the first time investment of PERF assets in equities.
The Teachers' Retirement Fund (TRF) administers pension and other benefits to all certified teachers of public school districts in Indiana. Faculty members of the state's public universities may elect to join TRF.
IC 5-10.3-2-1 of the Indiana Code establishes the Public Employees Retirement Fund.
Sec. 1. Establishment of Fund and Board. (a) The public employees' retirement fund of Indiana, referred to as the fund, is established to pay benefits to officers and employees of the state and its political subdivisions after specified years of service and under other specified circumstances. The purpose of the fund is to promote economy and efficiency in the administration of state and local government by providing an orderly way for members to be retired without prejudice and without inflicting hardship on the retired member. (b) The fund is a trust. The board of trustees of the public employees' retirement fund, referred to as the board, shall administer the fund and implement this article, without the supervision of the department of insurance.
Employees of political Subdivisions
IC 5-10.3-6-1 covers participation by political subdivisions in Indiana.
By ordinance or resolution of the governing body specifying by departmental, occupational, or other definable classification the employees who will become members of the fund, a political subdivision may become a participant in the fund if the ordinance or resolution is filed with and approved by the board.
IC 5-10.4-2-1 of the Indiana Code establishes the Teachers' Retirement Fund.
Sec. 1. Establishment of Fund. (a) The Indiana state teachers' retirement fund is established to be used to pay benefits to teachers and to supervisors of teachers in the public schools after specified years of service and under other specified circumstances. (b) The board is responsible for the control and management of the fund.
The System Board of Trustees consists of nine persons appointed by the governor. Eight of the trustees serve four-year terms. The ninth trustee is the director of the Budget Agency or the director’s designee.
At least one trustee must have experience in economics, finance, or investments.
At least one trustee must have experience in executive management or benefits administration.
Two trustees are nominated by the Speaker of the House of Representatives as follows:
• One nominee must be an active or retired police officer or firefighter who is a member of the 1977 Police Officers’ and Firefighters’ Pension and Disability Fund.
• One nominee must be a member of the Indiana State Teachers’ Retirement Fund with at least ten (10) years of creditable service.
• One nominee must be a member of the Public Employees’ Retirement Fund with at least ten years of creditable service.
• One nominee must be a member of the Indiana State Teachers’ Retirement Fund with at least ten years of creditable service.
One trustee is nominated by the Auditor of State. The nominee may be the Auditor of State or another individual who has experience in professional financial accounting or actuarial science.
One trustee is nominated by the Treasurer of State. The nominee may be the Treasurer of State or another individual who has experience in economics, finance, or investments.
The ninth trustee is the director of the Budget Agency, or the director’s designee, who serves as an ex officio voting member of the Board. An individual appointed to serve as the director’s designee is required to take an oath of office and serves as a permanent designee until replaced by the director.
Per the U.S. Census, in FY 2014, employer contributions to Indiana state and local government pension plans were 3.75 percent of all state and local government direct general spending.
Courts treat compulsory and noncontributory pensions as a mere gratuity. An employee has no entitlement to vested rights until all eligibility requirements are satisfied. See Haverstock v. State Public Employees Retirement Fund, 490 N.E.2d 357 (Ind. Ct.App. 1986)("1n order for a right to vest or a liability to be incurred it must be immediate, absolute, complete, unconditional, perfect within itself and not dependent upon a contingency. Moreover, it is well settled a mere expectance of a future benefit, or a contingent interest in property founded on anticipated continuance of existing laws, does not constitute a vested right."); Bd. of Trs. of the Pub. Emps.' Ret. Fund v. Hill, 472 N.E.2d 204, 208-09 (lnd.1985)(voluntary retirement system, in contrast to mandatory retirement system, creates contractually vested property rights which are protected from impairment of contract). (IN CONST., Article 1, §24) Source:Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits