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Benefit Changes

What's Happening?


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Tier 1 Overview Flyer

Learn about your benefit changes. No frills. Just the facts!

When?

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DATES YOU NEED TO KNOW

January 1, 2014

Multiplier increase to 1.85% for future service
Member contribution rate increases to 5%

January 1, 2015

Multiplier continues at 1.85%
Member contribution rate increases to 6%

Who?

  • bullet point Tier 1 KPERS: Hired before July 1, 2009
    Benefit multiplier and contribution increase
  • bullet point Tier 2 KPERS: Hired July 1, 2009 and after
    Benefit multiplier increase & loss of COLA
  • bullet point Employers: Contributions increasing by $500 million over the next 10 years
  • bullet point All Retirees, KP&F members, & Judges: these changes do not affect you

Why?

KPERS has struggled with a long-term funding shortfall for more than a decade. The 2012 Legislature passed these changes in answer to the shortfall.

REASONS FOR THE SHORTFALL
  • Member benefit increases in the 1990s were funded mostly through actuarial changes that put off paying for them until later.
  • For over 18 years, state statute has kept employers from contributing at the rate required for proper funding.
  • The Great Recession in 2008 caused unprecedented investment losses.
  • Members are living longer and members have been retiring earlier under the 85 point rule, both increasing liabilities.

The Unlikely Election

TODAY'S STATUS: NO ELECTION

KPERS has not heard from the IRS. As a result, we will not hold a benefit election for Tier 1 members in 2013. Contributions for Tier 1 members will increase to 5% starting with the first pay period that begins on or after January 1, 2014.

Questions?
kpers@kpers.org

1-888-275-5737

IF YOU'RE A TIER 2 MEMBER

Your benefit changes are simpler.

  • Employer contributions increase
  • Your benefit multiplier increases
  • You no longer have cost-of-living adjustments (COLA) in retirement

Employer contribution increases

Increases to employer contributions will have the most significant impact on funding. Employers will contribute an additional $500 million ($10 billion total) over the next 10 years.

Member multiplier increase

Your contribution rate will stay at 6% but your benefit multiplier will increase to 1.85% for all service! Even past service.

The Un-COLA

Legislation calls for employers to do the heavy lifting to help fund the system, but some of the weight is on your shoulders, too. You will no longer have a cost-of-living adjustment.

Tier 2 Changes Overview Flyer

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Questions? Contact the KPERS InfoLine at 1-888-275-5737 or kpers@kpers.org

Kansas Public Employees Retirement System
611 S. Kansas Ave., Ste 100
Topeka, KS 66603-3869