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Human Resources

Retirement Investors' Club (RIC)

3-Year Catch-Up Provision

The 3-year catch–up provision allows you (if you are eligible) to contribute up to twice the regular maximum annual contribution limit during the three years prior to, but not including, the year you will reach normal retirement age. If you are eligible, request a 3-year catch-up worksheet to determine your catch-up amounts.

Am I eligible to use the 3-year catch-up benefit?

You are eligible to use the 3-year catch-up provision if you:

  • Are currently participating in the Retirement Investors' Club;
  • Are three years from your declared "normal retirement age"; AND
  • Did not defer the maximum amount allowed for one or more years since you were eligible to participate in this plan or a previous employer’s eligible section 457 plan.

What is the 3-year catch-up limit?

The catch-up provision for 2008 allows you to contribute up to twice the regular IRS limit as follows:

  • 100% of your compensation* or $15,500, whichever is less, PLUS
  • The amount of the contributions which have been underutilized in all prior taxable years since the plan has been available to you (no earlier than January 1, 1979)
  • Up to a total of $31,000

If you want to increase your payroll deduction amount, please complete the RIC Account Form.

*Compensation is your gross salary minus your retirement (IPERS, POR, Judicial) deductions. The maximum amount you may contribute is reduced by deductions for FICA, insurances, flexible spending accounts, auto use maintenance, employee organizations, and assignments.

Which years can I "catch-up" on?

You may only catch-up on amounts you were eligible to contribute in the past but did not. You may go back to the later of the following dates:

  • January 1, 1979; or
  • The date you became eligible for the State’s plan or a previous employer’s eligible section 457 plan.

If I do not use the first two years of my 3-year catch-up benefit, can I use the third year to make up for what I missed?

No. If you do not increase your contributions in the first or second year that you elected the 3-year catch-up provision; you have "lost" those years. You may only contribute the IRS 3-year catch-up limit designated for that year. You may designate only one period of time as your 3-year catch-up period. This period must preceed your declared retirement age. You cannot use the 3-year catch-up provision during or following the year of your normal retirement age.

If I start using the 3-year catch-up, must I continue to use it?

No. You are not required to contribute the maximum amount nor are you required to use it for all three years. Your contributions should be based on your budget and how much you can afford.

How much can I contribute?

If you request a worksheet from RIC, we will complete your basic information and send the worksheet to your payroll office. Your payroll office will complete your income and deferral information. Based on this information, the worksheet will automatically figure your missed contribution amount. The maximum amount you may contribute is explained above under what is the 3-year catch-up limit?

The completed form will be returned to you for your signature. To request a worksheet, please provide your full name, social security number, and the date you will be eligible for full IPERS (or POR or Judicial) benefits without an early withdrawal penalty. (request a worksheet). If you need assistance with the worksheet or have questions, please contact the Retirement Investors' Club. If you want to increase your payroll deduction amount, you need to complete the RIC Account Form.

What if I work beyond my declared normal retirement age?

If you work beyond your declared normal retirement age, you may NOT extend the use of the 3-year catch-up provision. You simply return to your regular contribution limits once the catch-up period is completed.

What is my normal retirement age?

Normal retirement age is age 65 unless you declare a different normal retirement age. The normal retirement age you choose:

1. May not be earlier than a year in which you are eligible to receive benefits WITHOUT an age reduction penalty from your regular pension plan (IPERS, POR, Judicial). A pension plan may reduce your benefits if you retire earlier than the plan’s normal retirement age(s). Please consult with your retirement plan’s representative for more information.

For example, IPERS will NOT reduce your benefits due to age, if you:

  • Meet the Rule of 88 (If your age (must be at least age 55) plus your years of service equal or exceed the number 88); or
  • Meet the 62 and 20 provision (Are at least age 62 and have at least 20 years of service);or
  • Are age 65 or older.

2. Determines the time period of your 3-year catch-up provision.

For example, if you are an IPERS covered employee and eligible for the Rule of 88 at age 59, you could use the 3-year catch-up provision at ages 56, 57, and 58. You must declare your normal retirement age to be age 59.

3. Is irrevocable once you begin to use the 3-year catch-up provision to any extent.