Attention: Important update for PERF and TRF members
Changes to public pension plans for PERF and TRF members are underway. In 2016, the General Assembly enacted legislation that replaced the Guaranteed Fund with a new default option called the Stable Value Fund. The legislature made this decision, because the long-standing Guaranteed Fund rates of return declined significantly over the past several years. The fund currently is hovering around 0.25 percent. The transition to the new Stable Value Fund has already begun.
The legislature took action on behalf of members of PERF and TRF to replace this fund with an alternative option, which ensures higher rates for members. The plan is low-risk. There is no longer a guaranteed return rate with the new plan. However, the investment option under the Stable Value Fund is more sustainable long-term and will likely produce a better yield over time than the former option.
Recent investment data, according to the Indiana Public Retirement System, shows that the Stable Value Fund has produced an annual return of 1.41 percent compared to the former Guaranteed Fund rate of 0.66 percent based on yearly averages.
ISTA encourages members to review investment options if you currently have money invested in these plans. INPRS can be reached at 888-286-3544 from 8 a.m. to 8 p.m.
Remember, this change is separate from the Annuity Savings Account (ASA) portion of your pension benefit. ASA accounts for members of PERF and TRF have undergone a gradual step down in return rates over the past several years. The rate is currently 4.5 percent (down from 7.5 percent a few years ago), but the rate will no longer have a guaranteed floor as of January 2017 when INPRS outsources and contracts with MetLife – a third party vendor – to privately manage ASA accounts. The ASA portion of your retirement is separate from the pension and not part of the changes to the Guaranteed Fund.
Please check with INPRS for additional information regarding your retirement benefits.