Frequently Asked Questions
When does IPERS consider me “retired”?
IPERS’ definition of retirement means you have applied for and begun receiving IPERS retirement benefits. You must live into your first month of entitlement to receive benefits regardless of your age. To qualify for IPERS benefits you must terminate all employment with all covered employers (you do not need to stop working if you are age 70 or older) and file a properly completed application for benefits, which IPERS must approve.
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When can I expect my first retirement payment?
Retirement benefits may start the first month following the month in which you terminate employment with all IPERS-covered employers, provided you have filed an application and are 55 years of age or older. (Benefits may begin before age 55 if you qualify for disability benefits or if you are a Special Service member.)
If you have chosen to have your monthly retirement benefit direct deposited, IPERS pays on the last business day of each month. If you have chosen to receive a paper check each month, the checks are mailed the evening before the last business day of the month.
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How is my retirement benefit calculated?
The benefit amount is determined by a formula. The formula includes your average annual salary from the three years when you earned the most and a multiplier based on your years of service. The multiplier for regular members is 2 percent a year for the first 30 years of service and 1 percent a year for the next 5 years, up to a maximum of 65 percent. The multiplier for Special Service members is approximately 2.7272 percent a year for the first 22 years and then 1.5 percent for years 23–30, up to a maximum of 72 percent.
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Do employer-sponsored early retirement incentive programs change IPERS benefits?
An early retirement incentive program offered by an employer does not change the IPERS plan. Iowa law governs IPERS eligibility and benefits. Only legislative action can change the IPERS retirement plan.
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After I begin drawing IPERS benefits following an "early out" or early retirement, how long must I wait before returning to work?
IPERS requires that a member terminate employment and complete a bona fide retirement period. A member’s right to draw an IPERS pension is not affected by how the member terminates employment, unless the termination is a sham transaction. For example, if an employer and employee had an agreement that the employee would be rehired after completing a bona fide retirement, and this agreement was in place before the employee started drawing IPERS benefits, IPERS would consider that a sham transaction.
An employer may impose additional return-to-work restrictions when offering an early retirement incentive program. These are separate from IPERS. The employer, not IPERS, determines and enforces these restrictions.
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What is a bona fide retirement?
The Internal Revenue Service mandates that pension plans like IPERS require a bona fide retirement period. The Iowa Code mandates the length of the IPERS bona fide retirement period.
An IPERS member has a bona fide retirement if the member severs all IPERS-covered employment for the first four months of receiving retirement benefits. In addition, a member cannot work for an employer that participates in IPERS for the first month of those four months, whether or not the actual position is one that is covered by IPERS.
The only exception to the four-month requirement is for certain licensed health care professionals in some public hospitals. The Iowa Legislature in 2006 set a one-month bona fide retirement period for eligible licensed health care professionals working for these public hospitals through June 30, 2010.
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How much can I earn in a calendar year while drawing an IPERS benefit?
For members who are age 65 and over, there is no IPERS earning limit. For members under age 65, the earnings limit is $30,000 or the current Social Security limit, whichever is higher. A member’s IPERS benefit will be reduced by 50 cents for each dollar the member earns over the earnings limit for the remainder of the calendar year. The earnings limit is determined annually, using the calendar year. The limitation on earnings does not apply to members who are elected to public office.
A member returning to work in an IPERS-covered job will again start contributing to IPERS and accrue service credits. However, the person cannot receive any additional benefits until the person again terminates employment and completes another bona fide retirement period.
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Can I elect not to draw IPERS retirement benefits to avoid reemployment restrictions?
Yes. Members do not begin to receive IPERS benefits automatically, even if the member meets all the qualifications to begin drawing his or her pension. A member must submit a completed application, and the member decides when to do this. However, IRS laws require if a member reaches age 70½ and has terminated employment, the member must start receiving benefits.
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