Member Glossary

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This Glossary of Terms provides definitions for the many retirement terms and definitions used in the administration of your benefits.

Term Definition See also
Active Member One who has made contributions to IPERS during the current calendar yet and has not applied for a retirement benefit or a refund. For example, you could have stopped working in January but you are still considered an active member through December 31. Member Status
Accumulated Contributions A member's (or employer's) total contributions and the interest earned. By law, interest is granted at 1 percentage point above the one-year certificate of deposit rate. Retirement Benefit Calculation
Average Salary The IPERS-covered wage component of the benefit formula. Retirement Benefit Calculation
Bona Fide Retirement The period during which an IPERS member files a completed application for benefits, ends IPERS-covered employment and demonstrates the member is entitled to benefits. Returning to Work
Buy-back A service purchase when a member who previously took a refund from IPERS purchases the refunded service credit. Purchasing Service
Buy-in Any authorized service purchase that is not a buy-back or buy-up. Purchasing Service
Buy-up A service purchase when a member converts Regular service credits to Special Service credits. Purchasing Service
Calendar Year (CY) The 12-month period beginning January 1 and ending December 31.  
Computed Year Part of IPERS' retirement benefit formula that helps determine a member's average salary when the member's last year of employment is not a complete calendar year. Retirement Benefit Calculation
Contingent Annuitant A person, named by the member, who is guaranteed lifetime monthly payments upon the death of the member. A member designates a contingent annuitant (in place of a beneficiary) only if the member chooses Option 4 or 6 at retirement. Benefit Payment Options
Defined Benefit Plan An employer pension plan that uses a formula to guarantee a specified benefit at retirement. As a defined benefit plan, IPERS provides guaranteed benefits using a formula based on a member’s age, years of service and covered wages. Defined Benefit vs. Defined Contribution Plans
Disability Benefits Benefits provided to eligible members of any age with a qualified disability. Disability benefits are not adjusted for early retirement. Member Disability Benefits
Dividend A lump-sum payment intended to help compensate for the effect of inflation over time, such as the November dividend. Learn more
Early Retirement When a member not eligible for disability benefits starts receiving benefits before normal retirement age. The member's benefits are permanently reduced by an early-retirement reduction. Retirement Benefit Calculation
First Month of Entitlement (FME) The first month a member receives a monthly benefit. This is usually the month following the month in which a member terminates employment. A member must live into the first month of entitlement in order to qualify for retirement benefits. Retirement Benefit Calculation
Inactive Member One who has left IPERS-covered employment , has not made any contributions during the calendar year and who has not yet applied for a for a retirement benefit or a refund.  Member Status
IPERS-Covered Employment Any employment for which a person accrues benefits under IPERS. You receive service credit for any quarter during which you make contributions.   
IPERS-Covered Wages An employer pension plan that uses a formula to guarantee a specified benefit at retirement. As a defined benefit plan, IPERS provides guaranteed benefits using a formula based on a member’s age, years of service and covered wages.  
Membership Group A category of IPERS member determined by the type of IPERS-covered employment a member works in. There are three membership groups: Regular, Sheriffs/Deputy Sheriffs and Protection Occupation. Sheriffs/Deputy Sheriffs and Protection Occupation members are also known as Special Service members. Membership Groups
Multiplier Used in the formula to calculate your retirement benefit amount, the multiplier is expressed as a percentage. As you accrue more service, you qualify for a higher multiplier of your final average salary, which increases your benefit. Multiplier
Normal Retirement Age The time when a member begins receiving benefits not subject to an early-retirement reduction. Retirement Eligibility
Prior Service Service for an IPERS-covered employer in Iowa before July 4, 1953. Purchasing Service
Protection Occupation Members The group of public safety positions defined in Iowa Code 97B.49B. The members of this Special Service membership group have benefits calculated differently from the majority of IPERS' membership, Regular members. Membership Groups
Qualified Domestic Relations Order (QDRO) A special court order that individuals obtain in divorce that specifies how IPERS pension assets will be divided between a member and a former spouse.  Member Divorce
Retiree Divorce
Qualified Plan A status under the federal Internal Revenue Code that conveys certain tax advantages to the members of the plan, such as having contributions and investment earnings treated on a tax-deferred basis. IPERS has a qualified plan status under federal Internal Revenue Code section 401(a).  Governance
Required Beginning Date The date when members aged 721/2 or older must begin receiving IPERS benefit payments, as required by Internal Revenue Code section 401(a)(9).  
Retirement Retirement means applying for and beginning to receive benefits. A member's retirement will be revoked if the member returns to employment with an IPERS-covered employer without satisfying the bona fide retirement requirement. A member who has severed the employee/employer relationship, but has not taken the steps above, is not retired for IPERS' purposes. The member has simply terminated employment. In addition, retirement does not include a refund payment.  Nearing Retirement
Rule of 88 One way members can reach normal retirement age. A member must be age 55 or older and the sum of the member's age at the last birthday and the years of membership service must must equal or exceed 88. (This applies only if these qualifications are met on the member's first month of entitlement to benefits.) Retirement Eligibility
Rule of 62/20 One way members can reach normal retirement age. A member with 20 or more years of service may retire at age 62 without an early-retirement reduction. Retirement Eligibility
Service IPERS-covered employment completed by a member after July 4, 1953. Years of service are counted to the quarter of the calendar year. Service also includes credit for service purchases and service qualifying for free credit, such as certain military time. For any calendar quarter in which a member receives both Regular and Special Service wages, the quarter will be coded based on the membership group that generated the majority of reported wages for that quarter. Purchasing Service
Special Service Member Includes members of the Sheriffs/Deputy Sheriffs and Protection Occupation groups.  Membership Groups
Vested Member Becoming vested means a member has established rights to IPERS benefits and is eligible for additional membership rights such as purchasing service. Members can become vested in several ways related to years of service or age while employed.  Vested Members
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