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INPRS Update: What State Bill 10 Means for Teachers

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Photo Credit: David Mark from Pixabay

Written by: Tom Farrer, CFP®, CRPC® & Mychal Eagleson, CFP®, AIF®, ChSNC®

On June 26th, our team attended the INPRS Board Meeting to ensure we stay on top of all developments that affect members of the Teachers’ Retirement Fund (TRF). We believe this is a vital element in order to provide our clients with the relevant information they need on their pension, and as always, we will continue to monitor these communications and keep you abreast of important changes that may impact their financial plans.

The Board meeting covered too many topics to summarize in this communication, but we do want to give you a few highlights and make you aware of a very important change beginning January 1st, 2021 (see item #3 below):

1. INPRS continues to be a well-run pension plan with the interests of teachers top of mind.  Recent benchmarking data shows that INPRS ranks #3 in their peer group in the areas of overall cost and service to their members. Compared to our neighboring states, Indiana is well funded and well managed.

2. During this volatile time for the stock market, INPRS continues to follow their investment strategy and mitigate return risks to the pension plan by maintaining a well-diversified portfolio. Essentially, they are “sticking to the plan” and their current asset allocation is inline with their investment policy statement (IPS).

3. The Board approved proposed changes to the administrative rules that will allow access to a portion of your retirement plan while you’re still working. Beginning January 1st, 2021 active TRF members (teachers currently employed and working) that meet certain age and service requirements will be allowed to withdraw funds from their Defined Contribution account (DC Account - formerly known as the Annuity Savings Account or ASA) without impacting their primary pension benefit, and without requiring a separation from service. 

In-Service Withdrawal Changes Based on SEA 10:


  • This approved change states that a member of the Indiana state teachers' retirement fund (TRF) who meets certain age and service requirements may withdraw all or part of the amount in the member's annuity savings account without consequence to the member's pension benefit under the fund and without separating from a covered position. 

a. Specifies that TRF and PERF members who have reached age 59 ½ and meet normal retirement age requirements may withdraw money from their defined contribution account without separating service after December 31, 2020. Also clarifies that members who do so will not have their service cancelled based on such withdrawal. 

b. Specifies that TRF and PERF Hybrid members who have not reached normal retirement age and service requirements must wait thirty (30) days after separation of service prior to withdrawing money from their defined contribution account. 

What It Means for You:

This change is presenting a significant opportunity for you to gain access to your DC Account while still working. Is this a good idea? Every teacher’s circumstances are different, so the answer is, it really dependsWe're happy to sit down with to you to discuss the provision in light of your individual situation, but here are some circumstances where we believe it would warrant careful consideration: 

1. You meet the age and retirement requirements but have experienced a significant or unexpected financial loss and you need those funds to maintain your current lifestyle.

2. You are interested in some of the many investment options that are not currently available through INPRS. There are now over 10,000 different mutual funds and exchange traded funds available in the US, so while it is true that INPRS’ investment options are competitive, they clearly cannot offer all the choices that would be available to you through investing in an IRA. 

3. You are interested in investment options that offer a more “active” investment strategy, rather than one that is more “passive” (or indexed based).  As a reminder, the INPRS DC Account offers eight investment options that are very competitive in terms of performance and fees but limited in options. 

Here is the big CAUTION, and something we want you to be keenly aware of…

Due to this change in the rules, we anticipate that many sales reps from the financial industry will try to capitalize on this change, encouraging INPRS members to take a distribution from their DC Account and then use the funds to purchase financial products that will likely not be sold in their best interests.

We strongly recommend against taking any such action without first consulting a professional who can help you evaluate all the pros and cons of the move. Often times, the representatives that show up in your teachers lounge DO NOT have your best interests in mind or the long-term health of your finances.

Here's what to ask of anyone who recommends this strategy to you or who you seek out to help you evaluate if it's the right move for you:

-Ask him or her if they are a fiduciary. If they say yes, ask them to explain to you what that means. They should say that as a fiduciary that their duty is to put your best interests first. Ideally, the person will also be a Certified Financial Planner (CFP) who is also well-versed in teacher-related financial issues.

-Ask him or her to show you their evaluation of why this move is in your best interests. They should be able to produce a document for you that weighs the pros and cons, outlines any calculations they've made, and explains why this move aligns best with your long-term financial goals.

-Ask him or her if they money you'll be taking out/rolling over is going to be used to fund an annuity. If so, this is a red flag that you're likely getting a conflicted recommendation from a salesperson, not a true financial professional.


Thanks for taking a few minutes to read our summary of this major change from the INPRS Board. We invite you to schedule a conversation with us if you have any questions about what this means for you, or the potential opportunities that it presents to you and your financial plan. 

Before you go, we’d value the opportunity to have a conversation with you to discuss your financial planning, how the provisions of this bill may affect you, and generally how you can make the most of your finances. Right now may be the best time to examine your situation and plan for what’s ahead.


And don’t forget to follow us on Facebook & Twitter for more important updates and tips on finance for teachers!

Tom Farrer, CFP®, CRPC® is a Financial Planner with Teach Plan Retire, an independent financial planning firm specializing in finance for teachers. He served for six years as an executive at the Indiana Public Retirement System (INPRS), Indiana's largest pension plan and the one that specifically covers teachers' retirement. His passion for working with individuals one-on-one to achieve their goals motivated him to earn the CERTIFIED FINANCIAL PLANNER™ designation in late 2019, and joined Teach Plan Retire in 2020. He's a proud member of the Financial Planning Association of Greater Indiana.

Mychal Eagleson, CFP®, AIF®, ChSNC® is the President of Teach Plan Retire, an independent financial planning firm specializing in financial planning for teachers. His passion is helping teachers plan for successful financial futures and he frequently writes and speaks on important financial topics and how they specifically affect teachers' personal finances. He serves on the board of the Financial Planning Association of Greater Indiana as the President-Elect and Co-Director of Programming, serves as a member of the Professional Advisory Leadership Council for the Central Indiana Community Foundation, and is a proud member of the Financial Planning Association of Greater Indiana. To read more of the articles he's written or been quoted in through national publications, continue to navigate our Knowledge Center.