IPERS Information for Employers

New Hires, Re-Employments, and Transfers

IPERS coverage is mandatory and immediate for all permanent full-time and part-time employees, unless an employee is specifically excluded from coverage by law, or allowed to elect out of IPERS coverage per IPERS rules.


Employees in IPERS-covered positions should submit an Enrollment/Beneficiary Designation Form  directly to IPERS at the beginning of their membership period.


Employees who are in high school are not eligible for IPERS covered employment.  If someone is hired into an IPERS covered position and are still in high school, they should be excluded from IPERS at time of hire.  Once they have graduated high school, IPERS should be deducted.  Please refer to the Temp Workers Qualified for IPERS job aid in Workday for adding or removing the additional job classification.

 

Temporary employee is defined as an individual hired to work less than six months on an irregular, seasonal, or on-call basis. In general, temporary employees are excluded from IPERS coverage immediately upon hire. In Workday, if they are hired into an IPERS covered position an additional job classification will need to be added on their position to exempt them from IPERS. 


A temporary employee may qualify for mandatory IPERS coverage when an "ongoing relationship" with the employer is established as follows: 

●    When wages paid are $1,000 or more in two consecutive quarters, or
●    When a person is employed for 1040 hours or more in a calendar year

 

Mandatory IPERS coverage begins on the first day of the quarter following when the ongoing relationship was established. Centralized Payroll will add the additional job classification to their position to update the retirement code so that IPERS deductions can begin for the new quarter. 

The department should provide the newly qualified temporary employee with an Enrollment/Beneficiary Designation form so it can be completed and submitted directly to IPERS. 

 Temporary employees will remain eligible for IPERS covered wages as long as there is no formal termination or break in service.  Keep IPERS eligibility in mind for all workers when

  1. An employee has position change such as moving from a temporary-to-temporary or permanent to temporary position

  2. Terminating a temporary employee then rehiring to give an increase. 

     

    You can tell if the employee has qualified for IPERS by looking at their positions > additional job classification to see if they have IPERS listed, or review their pay results to see if IPERS have been deducted.  If the employee was in an IPERS covered position prior to the position change, then once the job change business process has been completed, you will need to key another job change task to add the applicable IPERS retirement plan and IPERS occupation code. 

    IPERS coverage for a temporary employee cease if they do not receive any wages for four consecutive calendar quarters.

Covered wages:  For IPERS members, covered wages generally include:

  • Regular pay
  • Vacation pay
  • Sick pay
  • Compensatory leave (max 240 hrs per fiscal year)
  • Overtime
  • Back pay attributable as wages
  • Supplemental workers compensation pays. 

 

Non-covered Wages: generally include:

  • Lump sum payouts for
    • sick
    • vacation
    • banked or compensatory leave
  • Bonuses
  • Subsistence pays
  • Relocation pays
  • Lump sum legal settlements made in lieu of actual back pay
  • Imputed income
  • Workers Compensation paid by a third party
  • Short or long-term disability payments made by a third party
  • Pay for certain job classes that are not covered as these job classes are considered to be non-employees (i.e. client/Patients, AmeriCorps)

 

Termination

Employee terminates AFTER six months of covered employment:

  • The employee may decide to leave contributions with IPERS until a later date, until attainment of retirement eligibility, or until the account is subject to IPERS mandatory account distribution rules.   
  • The employee may request a contribution refund directly from IPERS.  They should contact IPERS directly to initiate the process and obtain a refund application. 

Permanent employee terminates with LESS THAN six months of covered employment, the department can make the decision to issue an in-house refund to the employee for all IPERS deductions collected. Workday will send the Human Resource Assoc a To Do to request a refund.  The department must send a request to Centralized Payroll to initiate the IPERS refund process. Refunds may take up to 6 weeks to process. 

IPERS refunds will be considered taxable wages in the calendar year in which the refund was issued. During the IPERS refund process, the State share of IPERS contributions will also be refunded to the department.

IPERS-covered employee becomes DECEASED, IPERS should be contacted immediately (Toll free 800-622-3849Be ready to provide Deceased Employee Name, SSN, Date of death, and Name, Address, and Phone for contact person of the deceased. 

 

Retirement

To have a bona fide retirement in IPERS, the retiree must:

  • Submitted an IPERS benefit retirement application and IPERS has approved it
  • Left employment with all IPERS covered employers, including non-covered positions with covered employers
  • Currently receiving benefits
  • Followed the time restrictions for providing services for an IPERS covered employer

A retiree cannot enter into reemployment or independent contracting agreements, either written or verbal, before receiving at least one benefit payment from IPERS. A retiree cannot work as an independent contractor for, or in a non-IPERS covered position with, an IPERS covered employer before receiving at least one benefit payment from IPERS. A retiree may accept temporary employment after the first month of entitlement in their previous position. 

 

OTHER ITEMS

Application for Free Military Credit forms are to be submitted to Centralized Payroll for wage certification and submission to IPERS. Members must also attach a copy of their DD-214 form (showing active duty begin/end dates) with the application form. Centralized Payroll will complete the wage certification sections and sign/submit the application form to IPERS

Wage Adjustments for missed covered wages: If an employee receives wages that are not

appropriately treated as IPERS covered, once Centralized Payroll is notified about the error, they will:

  • collect missed contributions from both the employee/department
  • submit wage adjustments to IPERS to properly record the covered wages for the member.

 

Contact Centralized Payroll with any questions, or visit ipers.org for more information

 

 

 

Updated November 2025