Q&A: Layoffs and IPERS
Updated November 2009
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1. Am I still covered by IPERS if I am laid off?
Once you become a member of IPERS, you remain an IPERS member until you decide otherwise–even if you no longer work in a job covered by IPERS. Although you will no longer be contributing to IPERS or earning additional service credits, you remain an IPERS member as long as you choose, even if your layoff is permanent. Your membership in IPERS does not end until you close your account with IPERS and take a refund. However, a refund may not be best for you, and you have other choices. See questions 3 and 5 for a discussion of alternatives.
2. Do I need to call IPERS or take any action if my layoff is permanent? You don’t have to call IPERS after a permanent layoff, but we recommend you do. Our retirement counselors can talk with you about the benefits you have earned so far and your alternatives.
3. What are my alternatives if I am permanently laid off?
You can immediately cash out your IPERS account or roll over your money into another retirement account. Because both of these end your IPERS membership and erase service credits you have earned, you should talk with an IPERS representative first.
You may also leave your money in IPERS, and your account will continue to earn interest until you decide to:
- Roll your money over to another retirement plan.
- Take a refund.
- Begin receiving retirement benefits, if eligible (which is generally after you are vested and age 55 or older).
An IPERS publication, Leaving IPERS-Covered Employment Before Retirement, describes these alternatives in detail. It is available on our Web site, or you can call IPERS for a printed copy.
4. Do I need to do anything if I leave my money in IPERS when I am laid off?
If you want to leave your money in IPERS, you do not need to do anything. Your membership in IPERS will continue and all benefits you have earned so far will remain intact. Keeping your IPERS membership means your beneficiary will become eligible for a death benefit if you die, and if you are vested, you may become eligible for IPERS disability benefits at some time in the future. These benefits provide important protection for you and your family.
If you are vested and entitled to an IPERS retirement benefit, you may contact IPERS to receive a benefit estimate. You can keep your money in IPERS until you begin receiving retirement benefits. Benefits may begin as early as age 55, or before age 55 if you are awarded social security disability benefits or railroad retirement disability benefits. To apply for retirement benefits, contact IPERS.
If you leave your money in IPERS, be sure to:
5. What’s the best alternative for me?
Each person faces different circumstances and only you can decide what is best for you. While we cannot tell you what to do with your money if you leave IPERS-covered employment before retirement, here are times when it might make sense to leave your money in IPERS:
- You plan to return to IPERS-covered employment in the future.
The service credits you earned before you left employment will remain on file if you keep your money in IPERS.
- Your new employer’s retirement plan has a waiting period before you are eligible to join.
You cannot roll your money from IPERS into your new employer’s plan until the waiting period ends.
- You don’t have an employer-sponsored retirement plan.
You left IPERS-covered employment and do not have another employer-sponsored retirement plan into which you can roll over your contributions.
- You are unsure of what to do with your IPERS contributions.
You can leave your money in IPERS and let it earn interest while you decide what to do. If you decide later that you want to take a cash refund or roll over your money, you may do so then.
- You want to keep access to IPERS death benefits.
By leaving your money in IPERS, you continue to provide your beneficiary protection if you die.
6. If I participate in an early retirement program set up by my employer to reduce the number of layoffs, can I start IPERS benefits?
It depends. Your eligibility for IPERS benefits and eligibility for an early retirement program sponsored by your employer are separate. To receive IPERS benefits, you must be eligible under IPERS’ rules. Your employer may have eligibility rules for its early retirement program that are different from IPERS’ rules.
Employers may place other limits on your future employment when you accept an early retirement incentive. These also are separate from IPERS' rules.
Remember, IPERS benefits do not start automatically. We recommend you complete an application 60 days before the month you want benefits to start.
7. Can I receive IPERS retirement benefits if I also receive unemployment benefits?
Yes. However, you should keep in mind that you must have a bona fide retirement to receive IPERS benefits. This requirement restricts where you can seek employment. Where you work can also affect how much you can earn before your IPERS benefits are reduced. See the IPERS publication Returning to Work After Retirement: How Your IPERS Benefits Are Affected By Reemployment for more information. It is available on our Web site, or you can call IPERS for a printed copy.
8. If I receive unemployment insurance benefits, will my IPERS refund or monthly benefit be reduced?
No. The amount of your IPERS benefit is not reduced by unemployment insurance benefits.
9. If I take a lump-sum refund from IPERS, will my unemployment insurance benefits be reduced?
That depends on whether you are vested in IPERS. (You are vested if you have at least four years of service or have been at least age 55 while working in IPERS-covered employment.)
If you are not vested, your unemployment insurance benefits will not be reduced.
If you are vested, your unemployment insurance benefits may be reduced. As part of your refund, you will receive some of the contributions your employer(s) have made to IPERS for you, and interest. Your unemployment insurance benefits will be reduced by that portion of your refund. However, you can avoid reduced benefits by rolling over that portion of your refund. You must roll over that portion to a qualified trust or sheltered retirement plan as specified in the Internal Revenue Code.
10. If I receive monthly benefit payments from IPERS, will my unemployment insurance benefits be reduced?
Yes. You can find out how much your unemployment benefit would be reduced because of an IPERS monthly benefit before applying for either one. Call IPERS at 1-800-622-3849 to request an IPERS benefit estimate. Ask us to provide a breakout of your contributions and your employer’s contributions. Once you receive your IPERS estimate, contact your local Workforce Development Center. They can determine how much your unemployment benefit would be reduced. You can then decide to apply for IPERS benefits, unemployment benefits, or both.
Workforce Development Center offices
For unemployment insurance claims
- Burlington 319-753-1671
- Carroll 712-792-2685
- Cedar Rapids 319-365-9474
- Council Bluffs 712-242-2100
- Creston 641-782-2119
- Davenport 563-445-3200
- Decorah 563-382-0457
- Des Moines 515-281-9619
- Dubuque 563-556-5800
- Fort Dodge 515-576-3131
- Mason City 641-422-1524
- Ottumwa 641-684-5401
- Sioux City 712-233-9030
- Spencer 712-262-1971
- Storm Lake 712-732-1576
- Waterloo 319-235-1471
More offices are listed at
www.iowaworkforce.org/centers/files/offices.htm. |
