35 IAC 14-7-12 Social Security integration; benefit calculation

Sec. 12. (a) Pursuant to IC 5-10.2-4-7(b)(3), a member who retires between fifty (50) years of age and sixty-two (62) years of age may integrate the member's monthly pension benefit with the member's estimated Social Security benefits. This option increases the monthly pension benefit amount for which the member would ordinarily be eligible from the date of retirement until sixty-two (62) years of age. When the member reaches sixty-two (62) years of age, the member's monthly pension benefit will be reduced. Such reduction will occur whether or not the member applies for Social Security Administration benefits. (b) To receive an estimate of the member's monthly pension benefit with Social Security integration, the member shall obtain an estimate of Social Security benefits to be received at sixty-two (62) years of age from the Social Security Administration and provide the estimate to INPRS. (c) For retirement benefits payable on or after January 1, 2010, a member's pre-sixty-two (62) monthly pension benefit with Social Security integration shall be computed as follows: (1) Multiply the member's Social Security estimate for benefits to be received at sixty-two (62) years of age and actuarial factors established by INPRS' actuary, and obtain a product. (2) Add the amount of the member's pension as calculated in IC 5-10.2-4-4 and IC 5-10.2-4-5 to the product obtained in subdivision (1). For purposes of this section, the retirement benefit does not include any payments from an ASA or RSA. (d) For retirement benefits payable on or after January 1, 2010, a member's monthly pension benefit with Social Security integration at sixty-two (62) years of age shall be computed as follows: (1) Multiply the member's Social Security estimate for benefits to be received at sixty-two (62) years of age and actuarial factors established by INPRS' actuary, and obtain a product. (2) Subtract the product obtained in subdivision (1) from the member's pre-sixty-two (62) monthly pension benefit with Social Security integration as calculated in subsection (c). (e) For members who apply for unreduced retirement, notwithstanding subsections (c) and (d), the payments made before a member reaches sixty-two (62) years of age and after a member reaches sixty-two (62) years of age may not be less than one hundred eighty-five dollars ($185). (f) If a retired member dies before reaching sixty-two (62) years of age with a designated survivor beneficiary, the beneficiary's benefit will be recalculated and adjusted as described in subsection (d) and in accord with the survivor option chosen at the time of the member's retirement. (g) The amount of the member's Social Security benefits is not affected by the member's election of Social Security integration. (h) For postretirement increases granted after July 1, 2021, as a percentage of a person's retirement benefit, the amount attributable to postretirement increases will be granted in accordance with the amount of benefit the member is receiving at the time the postretirement increase is granted. The postretirement increase shall be also be adjusted according to the amount of benefit the member receives at sixty-two (62) years of age. For example, if Rachel retires and receives one thousand dollars ($1,000) per month in 2020 before she has reached sixty-two (62) years of age under the Social Security implementation option and a postretirement increase is granted in amount equal to two percent (2%) of the pension benefit in 2021, she will receive a one thousand dollar ($1,000) pension amount and a twenty dollar ($20) postretirement increase. In 2022, Rachel reaches sixty-two (62) years of age and her pension benefit reduces to two hundred dollars ($200) based on her Social Security integration selection. At that time, the 2021 postretirement increase of 2% will be calculated based Rachel's two hundred dollar ($200) post age sixty-two (62) pension amount. Thus, after Rachel reaches age sixty-two (62), she will receive a two hundred dollar ($200) pension benefit and a four dollar ($4) postretirement increase.