IPERS Fact Sheet
Authored By: Iowa Legal Aid
Who is Covered?
- Any public employee who is vested in the IPERS plan is eligible to receive retirement benefits when they reach their entitlement date.
Vesting occurs when an employee:
- Reaches age 55 while an active employee, or
- Prior to July 1, 2012, completes four years (16 quarters) of service, or
- After July 1, 2012, completes seven years (28 quarters) of service. Applies to all new employees and to existing employees who have not vested under the four-year rule by July 1, 2012.
When Can I Retire?
Vested IPERS members are eligible for monthly retirement benefits:
Normal or Early Retirement with No Reduction in Benefits.
- Normal Retirement. Age 65
- Rule of 88. When the member’s age plus years of service equals 88.
- Rule of 62/20. Age 62 with at least 20 years of service.
Early Retirement with Reduction in Benefits.
At age 55, with a reduction for each month prior to age 65.
- For Service through June 30, 2012, the reduction is 3% per year (or .25% per month).
- For service earned on or after July 1, 2012, the reduction is 6% per year (or .5% per month).
Before age 55 if the member is eligible for social security disability and receives approval from IPERS.
- The cause of termination does not affect a member’s IPERS benefits.
To receive retirement benefits, terminated employees must have
- Four (4) years of service if terminated prior to July 1, 2012;
- Seven (7) years of service if they have less than 4 years of service as of June 30, 2012.
- Terminated employees have the option of withdrawing their IPERS contributions at any time by contacting IPERS and completing a refund application. Once former employees have withdrawn their contributions, they will no longer have retirement credit with IPERS. Former employees cannot “buy back” their retirement credit unless they become re-employed as a public employee and complete an additional four years of service. NOTE: It is generally a bad idea to withdraw IPERS contributions if you are vested or if you expect to return to IPERS employment. Consult a pension or financial professional if you are considering such a withdrawal.
Applying for IPERS Benefits.
Eligible members can apply for IPERS retirement benefits by:
- Filing an IPERS benefit application at least 60 days before they want to begin receiving benefits,
- Terminating their public employment and any other employment. (A member must end all employment for four (4) months. After the end of this four (4) month period, IPERS members can obtain other employment. However, IPERS retirement benefits will be reduced in half if the member’s yearly employment earnings are more than $30,000.)
- Benefits will start the first month after they have filed an application, received approval from IPERS, and terminated their employment.
As a defined benefit plan, IPERS uses a formula to calculate member benefits.The benefit formula for regular IPERS members is:
[(Average Salary x Multiplier) - Early Retirement Reduction (if any)], where:
Average Salary equals
- For retirement before July 1, 2012, your high three (3) year average salary
- For retirement on or after July 1, 2012, the greater of:
- Your highest three (3) year average salary based on your service before June 30, 2012, or
- Your high five (5) year average salary over your entire career.
- Multiplier equals 2% per year for your first 30 years and 1% for years 31 to 35.
- Early Retirement Reduction. See "When Can I Retire?" above.
- Average Salary equals
- Note your benefit will be lower if you elect a joint and survivor annuity (see Death and Survivor Benefits below)
- Note also that all "Average Salary" calculations may be adjusted for "Wage Spiking", which is beyond the scope of this summary.
Death and Survivor Benefits.
- Death Before Age 55. If an IPERS member dies before age 55, the beneficiary will normally receive the member’s contributions and interest in a lump sum payment.
- Death After Age 55. If an IPERS member dies after reaching age 55 (or earlier if disabled and receiving benefits), IPERS benefits will normally be paid based on the option chosen by the member.
- Survivor Benefits. A member can elect to have his or her surviving spouse or beneficiary continue to get pension benefits after the member’s death. This payment option is called a “joint and survivor annuity.” Under this option, the member will get slightly smaller benefit payments during his or her life. If the member dies first, his or her surviving spouse or beneficiary can receive part or all of the member’s payment.
- A member can choose to have the benefits completely stop at his or her death if the member either does not have a spouse or the spouse agrees in writing to this option.
- Spousal Consent. If a member is married, his or her spouse must agree in writing to the benefit option chosen.
- In the event of a divorce, the spouse who was not an IPERS member can receive IPERS retirement benefits through a qualified domestic relations order (QDRO).
- A QDRO gives a spouse, former spouse, child, or other dependent of an IPERS participant the right to receive all or a portion of the member’s IPERS retirement benefits.
- A QDRO can be included in the divorce decree or issued as a separate order.
- Members should contact IPERS for any specific QDRO requirements or guidelines.
Appealing an IPERS Determination
- IPERS members or beneficiaries can appeal any decision that affects their rights.
- To appeal an IPERS determination, a notice of appeal must be sent to IPERS within 30 days after the unfavorable decision. The notice must state the decision to be appealed and reasons for the appeal.
7401 Register Drive
P.O. Box 9117
Des Moines, IA 50306-9117
Phone: (515) 281-0020
Fax: (515) 281-0053
Iowa Legal Aid provides help to low-income Iowans.
- To apply for help from Iowa Legal Aid:
- Iowans age 60 and over, call 800-992-8161 or
- apply online at iowalegalaid.org