Public Employees Retirement Fund (PERF)
- Defined Benefit
- Annuity Savings Account (ASA)
Retirement Plan Eligibility and Contribution Rates for Employees Paid Biweekly (Hired Before September 9, 2013)
- Benefits-eligible clerical and service staff members and operations/technical positions hired before September 9, 2013 are covered by the Indiana Public Employees' Retirement Fund (PERF). University-funded contributions begin immediately upon employment. Newly hired non-exempt police and firefighters participate in PERF and are not impacted by the September 2013 change for other non-exempt staff.
PERF Plan Description
The PERF Retirement Plan is made up of two parts:
- The Defined Benefit (pension) and
- The ASA
The state of Indiana determines annually the level of Purdue's contribution required to fund the PERF pension. Of this percentage, three percent is allocated to the ASA and the remaining portion is directed to the PERF Defined Benefit fund.
The Defined Benefit portion of your PERF pension is funded by Purdue. Defined Benefit contributions go into Purdue's employer account with PERF. If you leave PERF-covered service and do not become eligible to receive a retirement benefit, you cannot withdraw Defined Benefit funds.
The ASA supplements your Defined Benefit pension at retirement. State law requires that three percent of your gross wages be contributed to fund the ASA-Purdue funds this contribution for you. Staff who separate service from Purdue before becoming eligible to receive a retirement benefit may take a distribution of the ASA.
Statements are available online from PERF showing the ASA activity and balance. Call PERF if you need assistance in establishing a PIN to access your information. For a projection showing what the two portions of the PERF pension together will provide for you in retirement, employees can obtain a retirement estimate. A tool allowing individuals to estimate their retirement pension is available at the PERF website.
Funds contributed to the ASA accumulate in the participant's name during the time of participation in PERF. Members are given the option of directing their ASA investments to a number of options.
The variety of investment choices is intended to offer security while allowing participation in economic trends. More information on the investment options, including past performance and investment philosophy, is available at the PERF website.
Voluntary Retirement Savings Plans
All faculty and staff who receive a regular paycheck are eligible to contribute voluntarily to the Purdue University 403(b) Voluntary Retirement Savings plan and/or the Purdue University 457(b) Deferred Compensation plan. Contributions can be made to these plans by designating a percent of gross pay from 1 percent to 85 percent. Contributions to the plans can be started, increased or decreased at any time at www.netbenefits.com.
Employees who separate from service with 10 years or more of credited service have achieved vested status. This entitles participants to a retirement pension benefit no later than age 65. The ASA funds are separate from the vesting rules and will earn yearly interest until settled into a retirement benefit or until taken as a refund of the contributions and the accumulated interest. Requesting a refund before becoming eligible for a retirement benefit may result in forfeiting your rights to a pension through the PERF program. Contact PERF to learn of any restrictions that apply to your situation.
If you terminate your employment and have not reached a vested status, you are entitled to withdraw a lump sum payment of the money in your savings account. Nonvested members who leave their monies in PERF will earn interest on those funds for only 10 years.
Separation from employment prior to reaching vested status entitles the participant to withdraw a lump sum payment of the money in the ASA. However, requesting a refund before becoming eligible for a retirement benefit may result in forfeiting your rights to a pension through the PERF program. Contact PERF to learn of any restrictions that apply to your situation.
Nonvested members who leave their monies in PERF will generally continue to earn interest on those funds for a maximum of 10 years.
Benefit at Retirement
The PERF pension is a defined benefit plan. This means that the pension is calculated by using a formula set by law. Normally participants are eligible for full retirement benefits at age 65 with 10 or more years of service in a PERF plan.
Individuals who have worked in a PERF-eligible position for 15 or more years are eligible for early retirement benefits.
Individuals who fulfill the requirements for either normal or early retirement under PERF are entitled to receive a monthly benefit for life. The monthly benefit amount is based on:
- the average of the participant's highest five years of salary,
- years of service,
- age at the time of retirement, and
- the annuity payout option you select
To keep the pension income in line with economic changes, the state of Indiana has traditionally passed legislation authorizing a cost-of-living increase each year for PERF recipients.
The ASA component is in addition to the PERF pension. The amount of income this fund yields is based on the dollars accumulated, age at retirement and payout option selected. Both annuity and lump sum payments are available at retirement.