3 Contributions All Indiana public schools are required to participate in the TRF Hybrid retirement plan.  Charter schools can elect to opt out of the TRF Hybrid retirement plan if they offer an alternative plan. If an alternative plan is offered, individual members may elect to opt out of TRF participation.  Certain legally qualified state agencies are also eligible for participation.  In addition, some universities have the option of participating in the TRF Hybrid retirement plan. 3.1 Employer Contributions Employer contributions fund the employer’s pension benefit obligations and support the DB pension for TRF members. The employer contribution rate is separate and distinct from the 3% mandatory member contributions. Employer contributions do not fund individual member DC accounts. Contribution Rate – 1996 (‘96) Fund Employers contribute at an actuarially determined rate which is evaluated annually and approved by the INPRS Board. This is a flat rate, which is charged to all employers. These contributions are made to fund the employer’s pension benefit obligations for members in the ‘96 Fund. The amount is expressed as a percentage of the gross payroll for all members in the ‘96 Fund. Contribution Rate – Pre-1996 (Pre-‘96) Fund Employers do not contribute to the TRF Hybrid for members in the Pre-‘96 Fund. Annual appropriations are made to the Pre-’96 Fund and placed in the Pension Stabilization Fund. The investments in the Pension Stabilization Fund combined with funding from the General Fund provide the pension benefit to members in the Pre-‘96 Fund on a pay-as-you-go basis. 3.2 Member Contributions State law (IC 5-10.2-3-2) requires 3% of your gross covered wages (W-2 reportable wages) be contributed to TRF 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. 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. Teachers' Retirement Fund Hybrid Plan Member Page 11 of 47 Handbook Effective: 07/01/2024