News From Terre Haute, Indiana

August 27, 2013

Pension board change cuts retiree payouts

TOM LoBIANCO
Associated Press

---- — INDIANAPOLIS — Indiana lawmakers are pressing the head of Indiana’s pension system for answers about a change that would cut into how much retirees collect from their annuity plans.

Members of the General Assembly’s pension oversight committee grilled Indiana Public Retirement System Executive Director Steve Russo today. The state pension board voted unanimously last month to change retirees’ annuity plans.

The change concerns lump sums workers get from their annuity savings accounts when they retire. Roughly half of retirees opt to reinvest that money with the state in return for a guaranteed payout of 7.5 percent of that lump sum. But employees who retire after July 1, 2014, would have to collect a market-based rate about half that much.

Russo told the panel the current payouts are unsustainable.