3 Contributions 3.1 Employer Contributions Employer contributions fund the employer’s pension benefit obligations and support the Defined Benefit (DB) pension for PERF members. Each employer contributes at an actuarially determined rate that is evaluated annually. The employer contribution rate is separate and distinct from the 3% mandatory member contributions. Employer contributions do not fund individual member Defined Contribution (DC) accounts. 3.2 Member Contributions State law requires 3% of your gross covered wages (W-2 reportable wages—regular and overtime) be contributed to PERF Hybrid to fund the DC. Employers are given the option of paying your mandatory 3% contributions (pre-tax) as part of a wage adjustment; however, not all employers choose to do so.  If you work for the State, a quasi-governmental agency, or a university, the 3% is paid by your employer on your behalf before taxes are calculated on wages.  For all others, the 3% is deducted through payroll deduction, or your employer may pay all or part of this mandatory 3% contribution. The governing body of the employer makes this decision, and generally, may change it at any time. Regardless of whether you contribute the mandatory 3% contribution, or your employer makes it on your behalf, those contributions are considered member contributions and are submitted to INPRS for deposit in your DC account. Within the DC there are two types of member contributions:  Mandatory – Paid by the employer, by you, or shared by both.  Voluntary – Voluntary contributions are available to you if you work for an employer who is willing to deduct and report the voluntary contributions. As of January 1, 2018, voluntary pre-tax contributions are no longer available for new enrollment. However, if you enrolled in the Voluntary Pre-Tax Contribution account prior to January 1, 2018, you continue to make contributions and upon re-employment with the same employer you are required to continue with the voluntary pre- tax deductions. Enrollment in the plan is irrevocable. The following are the types of transactions that are part of your DC:  mandatory contributions,  voluntary contributions (pre- and post-tax), and  investment gains and losses. The contributions in your DC account and accumulated interest (earnings and losses) are for you to use after you retire. The DC can serve to supplement your pension benefit. If you leave covered employment before becoming eligible to receive a retirement pension benefit, you may take a distribution of your DC funds and accumulated interest (earnings and losses) under certain conditions. While actively employed in a position covered by the Fund, you are not permitted to withdraw funds. See the Millie Morgan Retirement section of this handbook for an exception. Voluntary Member Contributions In addition to the 3% mandatory member contribution, you may contribute up to an additional 10% of your compensation (gross wages). This additional 10% can be all post-tax, all pre-tax (if enrolled in the Voluntary Pre-Tax Contribution account prior to January 1, 2018), or a combination of both post and pre-tax (if Public Employees’ Retirement Fund Hybrid Plan Page 12 of 48 Member Handbook Effective: 07/01/2024