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Indiana Retirement System

The state retirement system of Indiana comprises several different retirement plans to cover the wide range of public employees working on behalf of the state. As pension systems can be complex, you may value some extra assistance understanding the Indiana retirement system. SmartAsset’s free financial advisor matching tool can pair you with financial advisors in your area who can best cater to your financial needs and goals.

Types of Retirement Systems in Indiana

The Indiana Public Retirement System (INPRS) is among the largest pension funds in the country, providing several distinct pension funds for employees of the State of Indiana/ These funds are: the Indiana State Teachers’ Retirement Fund; the Indiana Public Employees’ Retirement Fund; the 1977 Police Officers’ and Firefighters’ Retirement Fund; the Judges’ Retirement System; the Excise, Gaming and Conservation Officers’ Retirement Fund; the Prosecuting Attorneys’ Retirement Fund; the Legislators’ Defined Benefit Fund; and the Legislators’ Defined Contribution Fund.

The benefits and retirement requirements that accompany these plans depend on what the position entails. These funds all operate separately to bring benefits and security to their workers. But they are all overseen by the umbrella organization of the INPRS board of trustees.

Indiana Retirement Systems
Plan Title Eligible Employees
Indiana Public Retirement System (INPRS) Umbrella system encompassing rest; all public employees are eligible to enroll and begin accruing benefits.
Indiana State Teachers’ Retirement Fund Teachers and educators at all public Indiana K-12 schools within participating districts. This includes college professors and graduate employees of such institutions.
Indiana Public Employees’ Retirement Fund All public employees seeking state-mandated retirement benefits.
1977 Police Officers’ and Firefighters’ Retirement Fund General employees, firefighters, and police
officers serving in the participating cities, with general Indiana laws governing distinct eligibility and the Indiana State Legislature enacting local and private.
Judges’ Retirement System Judges and justices of peace serving on the Indiana State Court and Court of Appeals.
Excise, Gaming and Conservation Officers’ Retirement Fund Sworn officers in the prescribed fields.
Prosecuting Attorneys’ Retirement Fund Attorneys working on behalf of the prosecution in Indiana State Court.
Legislators’ Defined Benefit Fund; Legislators’ Defined Contribution Fund Sworn members of the state legislature.

Overview of Indiana’s Main Retirement Systems

Indiana Retirement System

Indiana State Teachers’ Retirement Fund  – This is the designated Indiana retirement system for all teachers and professors at K-12 schools or “institutes of higher learning.” As public teaching here is a union-based employment scenario, this plan is limited to educators, excluding non-teaching faculty at such institutions.

Indiana Public Employees’ Retirement Fund – The largest retirement system in the state, the PERF covers by far the largest number of single employees. All state employees are eligible to enroll.

1977 Police Officers’ and Firefighters’ Retirement Fund – This program consists of city retirement plans from around Indiana state for firefighters and police officers serving in participating counties. This fund coordinates in conjunction with with INPRS, meaning if you’re a member of one, you’re a member of the other.

Judges’ Retirement System – It’s mostly as simple as the name suggests. This is a plan for judiciary members and judges in Indiana state courts.

Legislative Defined Benefit and Contribution Funds –This provides supplemental benefits, in addition to all existing INPRS benefits, to all members of the Indiana Legislature and the President of the Senate, Lieutenant Governor.

Retirement Taxes in Indiana


On a federal level, the money that you contribute to your pension plan does not get taxed, making it a tax-deferred account. On the other hand, you’ll pay taxes on any payments you take directly from your pension once you retire. Luckily, you will have the chance to decide whether you’d rather have these funds withheld from each pension check, or make estimated tax payments.

You can’t predict how much will be withheld from your income. Many moving parts may have an impact, but luckily, the government does those calculations for you. It will supply you with a refund (or charge the dividends) at the end of the year.

Retirement plans, like many of Indiana’s, include a rollover, which goes from your pension plan to a tax-deferred retirement account. Finally, if you instead have a Roth IRA, you’ll have to pay your taxes upfront. But many of your distributions in retirement will be tax-free.

As detailed in our thorough Indiana Retirement Tax Friendliness Guide, the state of Indiana is moderately tax-friendly toward its retirees. Indiana doesn’t tax Social Security. But it does fully tax retirement account withdrawals. Wages are taxed at standard rates, and the marginal state tax rate is at 3.23%. Finally, public and private pension incomes are fully taxed.

Current Financial Health of the Indiana Retirement System

Indiana Retirement System

The Indiana Retirement System is booming, covering almost 475,000 members. According to its annual report, in 2017, it paid out approximately $2.5 billion in annual benefits and received $2.2 billion in contributions. Those are no small numbers; even more, the portfolio held a total of $30.2 billion of assets under management as of June 2017.

Tips for a Successful Retirement

  • Create a list of financial goals you’d like to meet before you reach retirement age is the best way to ensure that you’re not over-saving. This will make it easier to decide where you want to end up financially, which can make retirement more attainable.
  • Indiana does not levy an estate tax, but make sure to check out federal estate tax rules if your estate is worth enough.
  • Even with all the benefits of a state-set pension, retirement can nonetheless prove difficult to prepare for. Help from a financial advisor might be the best way to get your ducks in a row. SmartAsset’s financial advisor matching tool can set you up with skilled financial advisors in your area free of charge.

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Jane Thier Jane Thier writes on a variety of personal finance topics for SmartAsset. Her expertise includes banking and mortgage. Jane is currently studying at Washington University in St. Louis and serves as editor-in-chief of Armour Magazine. Jane aims to receive her Master's Degree in Journalism.
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