IPERS
Members
 

For Members Retiring—
Protection Occupations

Congratulations on Your Upcoming IPERS Retirement

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Eligibility for Benefits and Payout Amount

Eligibility for Benefits
You are eligible for retirement benefits if you are no longer working for an IPERS-covered employer and meet one of these conditions:

If you are age 70 and still working for an IPERS-covered employer, you may apply to begin receiving IPERS retirement benefits while still employed. When you stop working, IPERS may adjust your benefit to account for your additional years of service and salary.

Benefit Amount
The formula used to calculate your annual IPERS benefit includes:

  1. A formula multiplier (based on your years of service).
  2. Your highest 3-year average salary.

Your annual IPERS benefit is calculated as follows:

Multiplier
(Based on your
years of service)
X Salary
(Your highest
3-year average)

IPERS will compare your highest 3-year average salary to your highest calendar year salary (control year salary) not being used in the formula. If your highest 3-year average salary is more than 121 percent of your control year salary, your salary in the benefit formula will be reduced to 121 percent of your control year salary. Additional rules apply when your control year salary does not represent a full year of salary.

To determine the multiplier used in the calculation, refer to the chart below.

Chart Thumbnail

View enlarged version of chart

Let’s look at some examples of the IPERS benefits a member might receive. Please keep in mind that these examples are for illustrative purposes only. Your benefits may be different depending on your employer, length of service, covered wages, and the payment option you choose at retirement.

Example 1
Retirement Benefits

Scenario A
Joe works for an IPERS-covered employer for 21 years. He retires at age 55, when he qualifies for a normal retirement pension. His highest 3-year average salary is $51,814. His annual retirement benefit would be $29,673.88 (57.27% x $51,814) under Option 2. Depending on the payment option Joe elects, this amount may be adjusted.

57.27% Multiplier
(Based on Joe’s
years of service)
X $51,814 Salary
(Joe’s highest
3-year average)
= $29,673.88

Scenario B
If Joe worked another 3 years and retired at age 58 with a highest 3-year average salary of $55,056, his annual retirement benefit would be $34,685.28 (63% x $55,056) under Option 2. Again, depending on the payment option Joe elects, this amount may be adjusted.

63% Multiplier
(Based on Joe’s
years of service)
X $55,056 Salary
(Joe’s highest
3-year average)
= $34,685.28

Death Benefits

Assuming the same years of service, age, and salary as Scenario B above, a lump-sum benefit of $289,044 would be payable to Joe’s beneficiary in the event of his death before retirement.

Example 2

Retirement Benefits Calculated With Control Year Salary

Brenda works for an IPERS-covered employer for 30 years and decides to retire at age 65. Her highest 3-year average salary is $60,000. Her control year salary is $46,000. To find out what to use as Brenda's salary in the benefit formula, IPERS must multiply $46,000 by 121 percent, which equals $55,660. Because $60,000 is more than $55,660, IPERS will adjust Brenda's salary used in the benefit formula to $55,660. Brenda's annual retirement benefit would be $40,075.20 (72% X $55,660) under Option 2.

Brenda's highest 3-year average salary $60,000
Brenda's control year salary x 121% $55,660

$60,000 > $55,660, so $55,660 is used in the benefit formula.

72%
Multiplier

(Based on Brenda's years
of service)
X $55,660 Salary
(121% of Brenda’s
control year salary)
= $40,075.20

If You Have Special Service and Regular Service
If you have worked as a Special Service and regular member, a hybrid formula may be used to calculate your benefit. The hybrid formula takes all of your service into account by applying the appropriate multiplier for each membership class to the service you earned in that class. The formula multiplier for your first 30 years of regular service is 2 percent per year.

Grandfathered years of Special Service (years in which you contributed at regular rather than Special Service rates while working in a Special Service position) are treated as regular service in this formula. If a hybrid formula is used to calculate your benefits, they could be reduced if you begin receiving them before normal retirement age. A benefit reduction for early retirement will apply only to your regular service credits. Normal retirement age for members with both regular service and Special Service is one of the following, whichever comes first:

  • Age 65
  • Age 62 if you have 20 or more years of covered employment (62/20)
  • When your years of service plus your age equals or exceeds 88 (Rule of 88)

The hybrid formula cannot be used if you have 30 or more years of regular service or 22 or more years of Special Service. The maximum retirement benefit under the hybrid formula is 65 percent of your final average salary. The following examples show benefits calculated using the hybrid formula.

Example 3
Retirement Benefits Calculated Using the Hybrid Formula,
Payable at Normal Retirement Age

Nancy works for an IPERS-covered employer for 21 years. During those years, she worked as a regular-class employee for 6 years and as a deputy sheriff for 15 years. She retires at age 62, when she qualifies for a normal retirement pension. Her highest 3-year average salary is $53,754. Her annual retirement benefit would be $28,435.87 (12% regular-class formula multiplier × $53,754 + 40.90% Special Service formula multiplier × $53,754) under Option 2. Depending on the payment option Nancy elects, this amount may be adjusted.

12% Multiplier
(Based on Nancy’s
years of service as a regular-class employee)
X $53,754 Salary
(Nancy’s highest
3-year average)
= $6,450.48

40.90% Multiplier
(Based on Nancy's
years of service as a Special Service employee)
X $53,754 Salary
(Nancy’s highest
3-year average)
= $21,985.39


$6,450.48

+ $21,985.39
= $28,435.87

Example 4
Retirement Benefits Calculated Using the Hybrid Formula,
Payable Before Normal Retirement Age

Jack works for an IPERS-covered employer for 20 years. During those years, he worked as a regular-class employee for 10 years and as a police officer for 10 years. He retires at age 55, before he meets normal retirement age. His highest 3-year average salary is $50,000. His annual retirement benefit would be $21,535 (20% regular-class formula multiplier × $50,000 – $2,100 age reduction [7 years before normal retirement age × 3% per year reduction] + 27.27% Special Service formula multiplier × $50,000) under Option 2. Depending on the payment option Jack elects, this amount may be adjusted.

20% Multiplier
(Based on Jack’s
years of service as a regular-class employee)
X $50,000 Salary
(Jack’s highest
3-year average)
$2,100 Reduction for Early Retirement
(3% per year)
= $7,900.00

27.27% Multiplier
(Based on Jack's
years of service as a Special Service employee)
X $50,000 Salary
(Jack’s highest
3-year average)
= $13,635.00


$7,900.00

+  $13,635.00
= $21,535.00

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FAQs
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Helpful Links
If you have always worked as a Special Service member, your benefit is not reduced for early retirement.

If you have both Special Service and regular service, a hybrid formula may be used to calculate your benefit, in which case your benefit may be reduced for early retirement.


IPERS membership includes the regular membership class (which makes up about 96 percent of the membership), the sheriff/deputy membership class, and the protection occupation membership class. Sheriffs/deputies and members in protection occupations are known as Special Service members. These members work in public safety occupations. Their careers tend to be shorter because of the physical demands of their jobs. There are some differences in the retirement benefits offered to each membership class.