Lawmakers are mulling converting the state’s pension system into a 401(k)-like model, bringing Indiana into the heated national debate over public pensions.

The pension fund that holds benefits for public employees has seen improved investment returns over the last two years, but the hammering it took during the depths of the recession continues to deal a blow to cities, counties and other employers.

Indiana University is drafting plans to offer thousands of university employees a voluntary retirement buyout.

A record number made hardship withdrawals in the second quarter, and the number of of workers who borrowed from their accounts reached a 10-year high, according to Fidelity Investments.

The mandate from a U.S. bankruptcy judge will supply retroactive benefits to more than 6,000 Visteon Corp. retirees who lost insurance coverage after the Michigan-based auto-parts maker filed for bankruptcy in 2009, including 2,100 workers in Indiana.

The AARP says IPL "perverted" a promise to its retirees regarding post-retirement benefits. The retirees have appealed their case to the Indiana Supreme Court.

Testimony filed in Indianapolis Water Co.'s rate case shows the city in 2007 agreed to take on millions of dollars in costs from the private firm it hired to operate the utility, including $48 million in retiree medical plan obligations.

Gov. Mitch Daniels wants legislators to revive a merger of the Indiana Public Employees Retirement Fund and the Indiana State Teachers Retirement Fund. He says the move could save up to $50 million a year in fees.

Last fall's Wall Street meltdown, which erased half the value of some 401(k) retirement plans, has both employers and employees re-examining what to expect long term.

Indianapolis Power & Light could have been on the hook for more than $100 million in retirement benefits, but a ruling this month by the Indiana Utility Regulatory Commission allows IPL to keep the money.

Experts worry that if unemployment worsens, even more companies could be forced to cut benefits, especially health insurance.

Private employers that still offer traditional pension plans are getting a big shock as they assess how much more it will cost to shoulder retirement obligations.

Angela Braly, Wayne DeVeydt and the rest of the top brass at WellPoint Inc. face wrath over the company's recent stock swoon from a new group: ex-employees. Four former WellPoint workers have filed lawsuits against the Indianapolis-based health insurance giant over the losses its 401(k) retirement plan suffered in March when the company slashed its profit forecast for the year.

In a case with huge financial implications for Indianapolis Power & Light and Virginia parent AES Corp., a labor union and 16 IPL retirees have asked regulators to force the utility to pay up to $115 million to back-fund a retirement plan it spun off in 2001.