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The Indiana Public Retirement System last week finished disbursing almost $60 million to more than 160,000 retired former public employees.
The retirees received about $370 on average, in a post-retirement benefit increase known as a 13th check. The bonuses supplement flat retirement benefits that don’t keep up with inflation.
“It really felt huge for (members) to receive the 13th check during a time of such high inflation,” said Jessica Love, leader of the Retired Indiana Public Employees Association.
The money came from dedicated funding in reserve accounts. It was disbursed in two phases.
Nearly 100,000 members of the Public Employees’ Retirement Fund received about $34 million Friday, averaging $346, according to INPRS.
So did the almost 300 members of the Excise, Gaming and Conservation Officers’ Retirement Fund, who received about $110,000, averaging $544.
“For once, Friday the 13th didn’t have to have negative connotations,” Love quipped. Members, she said, “couldn’t have been happier.”
The 62,000 members of the state’s two teachers’ retirement funds got their checks on August 30. They took in about $25 million, with pre-’96 members averaging $416 and ’96 fund members averaging $356.
INPRS’ 13th checks ranged from $150 to $450, with payments increasing based on years of service. The 13th check can be higher or lower than a retiree’s typical monthly payment, Love noted.
Rep. Bob Cherry, an outgoing Republican representing Greenfield, was one of the 13th check’s most strident proponents.
“For 10,000 people making $200 or less a month, that was pretty important to those folks,” he told the Capital Chronicle.
He said constituents reported spending the money on medications, groceries, and even holiday gifts for grandchildren and great-grandchildren.
Lawmakers approved the move on the last day of the most recent legislative session, following weeks of inter-chamber tussling. The House preferred an ad hoc 13th check, while the Senate preferred a long-term plan guaranteeing either a check or a cost of living adjustment.
What’s next
With this year’s payments out of the way, there is a new system for the future.
House Enrolled Act 1004 established a hybrid mechanism offering annual 13th checks to public employees retired before July 1, 2025. Those retired after that date would get 1% cost-of-living adjustments.
To pay for the plan, the legislation removed a previous 1% payroll-based surcharge cap and instead created an annual 0.1% annual cap until 2030. And it banned INPRS’ board from lowering rates until 2030.
“There’s no perfect solution, necessarily,” Love said. “But this hybrid gets us … closest to perfect.”
There are details left to settle.
Love said she was waiting to see the money assigned in the state’s biennial budget — the legislative session begins in January — and to see an implementation date.
Cherry, meanwhile, indicated lawmakers could tweak the COLA percentage, noting that it is more expensive than the 13th check in the long term. That’s because a COLA represents a permanent increase in benefits rather than a one-time bump.
“(Rep. Jeff) Thompson and I think a fraction of a COLA would be better,” he said. “… The 1% COLA is out of the question. We can’t afford that.”
Thompson, who leads the budget-building House Ways and Means Committee, didn’t immediately reply to a request for comment. Neither did Sen. Ryan Mishler, who chairs the Senate’s powerful Appropriations Committee.
INPRS spokesman Dimitri Kyser said in March that lawmakers could do both “if all actuarial assumptions are met” but warned the system hasn’t examined the risks Indiana would face if finances failed to meet those assumptions.
Moving forward with both approaches would increase INPRS’ unfunded liabilities by $779 million, Kyser wrote to the Capital Chronicle. That would also decrease the funded statuses for the ’96 Teachers Retirement Fund and the Public Employees Retirement Fund by about 3% and 2%, respectively, he said.
INPRS this month declined to provide updated estimates for the impact of taking both approaches.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.
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