| What is IAP |
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What is the Individual Account Program (IAP)?
The IAP is a defined contribution retirement program for all active Tier One, Tier Two, and OPSRP members. The legislature created the IAP in 2003 to provide an individual account-based retirement benefit for new workers hired on or after August 29, 2003, and for Tier One/Tier Two members active on and after January 1, 2004. The IAP benefit is in addition to the member’s other retirement program benefit (i.e., Tier One, Tier Two, or OPSRP).
Contributions
Effective January 1, 2004, 6 percent of your salary has been placed in your IAP account. The IAP can have earnings or losses, and administrative fees are deducted from the fund’s earnings as part of the annual crediting process. You are automatically vested in your IAP account when your account is established.
Earnings
Earnings are credited annually to your account. This allows PERS to work with your employer to ensure that your contributions are accurate and complete before allocating earnings on a year-end balance basis so you are not adversely affected by posting delays or corrections.
Annual Statement
Active and inactive IAP members receive an annual statement after earnings are credited each year.
Portability
Your membership in the IAP is portable, so once you become an IAP member, you remain a member if you later leave one participating employer to work for another participating employer in a qualifying position.
Withdrawal
If you are an inactive member, you may elect at any time to withdraw your IAP account to the extent you are vested.
Withdrawn funds are subject to federal income taxes plus an additional 10 percent tax unless you elect a direct-transfer rollover into an Individual Retirement Account (IRA) or other tax-qualified plan. PERS must withhold 20 percent federal tax on the taxable portion of your refund unless you elect a direct-transfer rollover. You can roll over only the taxable portion of your refund (that portion of your account that has not been previously taxed).
Your withdrawal payment should be mailed to you within 90 days after PERS receives all needed documentation, including a Notice of Separation from your employer(s).
At Retirement
At retirement, you can receive your IAP account balance as a lump-sum payment; in equal installments over a 5-, 10-, 15-, or 20-year period; or over your anticipated life span.
Your withdrawal payment should be mailed to you within 90 days after PERS receives all needed documentation, including a Notice of Separation from your employer(s).
If you are also or were Tier One or Tier Two member, IAP benefits are in addition to any other PERS retirement benefit you are entitled to receive.
If you are retired and you die before all installment payments are completed, your beneficiary is entitled to receive the remaining installment payments and may choose to receive the remaining amount in a lump-sum payment.
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