LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6275 NOTE PREPARED: Dec 1, 2023
BILL NUMBER: SB 38 BILL AMENDED:
SUBJECT: Thirteenth Check.
FIRST AUTHOR: Sen. Niezgodski BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill provides for a thirteenth check for certain members, participants, or
beneficiaries of the: (1) Indiana State Teachers' Retirement Fund (TRF); (2) Indiana Public Employees'
Retirement Fund (PERF); (3) State Excise Police, Gaming Agent, Gaming Control Officer, and Conservation
Enforcement Officers' Retirement Plan (EG&C); (4) State Police Pre-1987 Benefit System; and (5) State
Police 1987 Benefit System. The bill also provides for a $50 payment to members of TRF and PERF, and
to participants of EG&C.
Effective Date: July 1, 2024.
Explanation of State Expenditures: Summary - Total state costs for the thirteenth check and the $50
payments are estimated to be $38.3 M in FY 2025.
Thirteenth Checks - State: Total state costs for the thirteenth checks are estimated at $34 M in FY 2025. The
thirteenth checks for PERF (state), TRF Pre-‘96 (teachers who began teaching prior to July 1, 1995), and
EG&C will be paid from the pension funds’ pre-funded supplemental reserve accounts (SRAs), which are
set up to pre-fund cost-of-living increases (COLAs) and thirteenth checks. The thirteenth checks for the State
Police pension retirees and beneficiaries will be paid from the State Police Pension Trust Fund. The State
Police Pension Trust receives funding from state General Fund appropriations through the biennial budget
process.
Pension benefit recipients of PERF, TRF, and EG&C will receive between $150 and $450 depending on their
years of service while State Police pension benefit recipients will receive a 1% share of the maximum
pension for a trooper with certain years of service. The estimate is based on pension fund member retiree,
SB 38 1 disability, and beneficiary data and years of service as of June 30, 2022. The estimate was adjusted to
account for retirements and disabilities occurring between that date and the eligibility dates laid out in the
bill (see Table 1).
$50 Payments - State: The bill also provides for an additional $50 payment in FY 2025 to pension benefit
recipients of PERF (state), TRF Pre-‘96, and EG&C who receive a thirteenth check. The state cost for the
$50 payments is estimated to be $4.3 M in FY 2025. The $50 payments will be paid from either General
Fund appropriations or from the respective pension funds or a combination of the two sources (see Table 1).
The bill does not make an appropriation.
Table 1. State Cost of Thirteenth Checks and $50 Payments for Pension Recipients in FY 2025
Qualified
Retirees /
Beneficiaries
(Approx.)
Thirteenth
Checks
$50 Payments Total State Cost
FY 2025
(in Millions)
PERF (State) 33,500 $11.5 M $1.7 M $13.2 M
TRF Pre-'96 53,100 $22.0 M $2.7 M $24.6 M
EG&C Fund 270 $0.1 M $0.01 M $0.1 M
State Police 1,620 $0.4 M -- $0.4 M
Total (State) 88,490 $34.0 M $4.3 M $38.3 M
Note: Funding for the thirteenth checks for PERF, TRF, and the EG&C Fund will come from the Supplemental Reserve Accounts
of the respective funds. Funding for the State Police thirteenth check will come from state General Fund appropriations or from the
State Police pension trust. Funding for the $50 payments will come from state General Fund appropriations, from the respective
pension funds, or from a combination of the two sources. Sums may not total due to rounding.
Workload Impact: INPRS administers the PERF, TRF, and EG&C funds. The State Police and the Treasurer
of State’s Office administer the State Police Benefit Funds. This bill will increase workload for these
agencies to make additional payments to pension benefit recipients. The administrative costs of the funds
are paid from the respective funds.
Additional Information -
Total Costs: The combined state ($38.3 M) and local ($30.7 M) expenditures to provide the thirteenth
checks and $50 payments under the bill are estimated at $69.0 M in FY 2025.
If the full cost of the $50 payments for all recipients, including the local members of PERF and TRF ‘96, are
paid from a state General Fund appropriation, the total required General Fund appropriation is estimated to
be $8.2 M which includes the combined state ($4.3 M) and local ($3.8 M) cost of providing the $50 payment
for members of PERF, TRF, and EG&C.
Supplemental Reserve Accounts (SRAs): SRAs were established by SEA 373-2018 for PERF, TRF, EG&C,
and the Legislator’s Defined Benefit Fund as a way to pre-fund postretirement benefit increases and
thirteenth checks. The SRAs are funded by employer contributions as a surcharge as determined by the
INPRS Board, in an amount not to exceed 1% of the employers’ payroll that is attributable to those
employees who are members of PERF, TRF ‘96, or EG&C. Beginning on January 1, 2023, the surcharge
rates are 0.66% of payroll for PERF employers, 0.21% of payroll for TRF ‘96 employers, and 1.00% of
SB 38 2 payroll for EG&C employers. Additionally, $30 M annually of surplus revenue from the State Lottery
Commission is transferred to the SRA to pre-fund thirteenth checks and COLAs for members of the TRF Pre-
‘96 Fund.
Explanation of State Revenues:
Explanation of Local Expenditures: Summary - Total local costs for the thirteenth check and the $50
payments are estimated to be $30.7 M in FY 2025.
Thirteenth Checks - Local: The local cost for thirteenth checks is estimated to be $26.9 M in FY 2025 for
the local share of PERF and TRF ‘96 (teachers who began teaching after June 30, 1995). The thirteenth
checks will provide benefits to approximately 67,000 local PERF members and 10,000 TRF ‘96 members
(see Table 2). The thirteenth checks will be paid from the funds’ SRAs which are pre-funded by an employer
contribution surcharge.
$50 Payments - Local: The bill also provides for an additional $50 payment in FY 2025 to pension benefit
recipients of PERF (local), TRF ‘96, and EG&C who receive a thirteenth check. The local cost for the $50
payments are estimated to be $3.8 M in FY 2025. The $50 payments will be paid from either General Fund
appropriations or from the respective pension funds or a combination of the two sources (see Table 2).
The bill does not make an appropriation.
Table 2. Local Cost for Thirteenth Checks for Pension Recipients for FY 2025
Qualified
Retirees/Beneficiaries
(Approx.)
Thirteenth
Checks
$50 Payments Total Local Cost
FY 2025 (in
Millions)
PERF (Local) 67,000 $23.0 M $3.3 M $26.4 M
TRF '96 10,000 $3.8 M $0.5 M $4.3 M
Total (Local) 77,000 $26.9 M $3.8 M $30.7 M
Note: Funding for the thirteenth checks for PERF, TRF, and the EG&C Fund will come from the Supplemental Reserve Accounts
of the respective funds. Funding for the State Police thirteenth check will come from state General Fund appropriations or from the
State Police pension trust. Funding for the $50 payments will come from state General Fund appropriations, from the respective
pension funds, or from a combination of the two sources. Sums may not total due to rounding.
Explanation of Local Revenues:
State Agencies Affected: Indiana Public Retirement System, Indiana State Police, Treasurer of State.
Local Agencies Affected:
Information Sources: Cavanaugh Macdonald Consulting, LLC. (2023, January 27). Potential Benefits from
the Supplemental Reserve Account for FY 2024 and FY 2025; INPRS. 2022 Comprehensive Annual
Financial Report. https://www.in.gov/inprs/annualreports.htm; INPRS, 2022 valuation pension database;
Legislative Services Agency. Indiana Handbook of Taxes, Revenues, and Appropriations, FY 2023;
McCready and Keene, Inc. (2022). Department of State Police of Indiana Pension Trust Agreement Actuarial
Valuations.
SB 38 3 Fiscal Analyst: Camille Tesch, 317-232-5293.
SB 38 4