DA Memo - June 12, 2007

Working After KPERS Retirement

1. Overview
2. Waiting Period for Returning to Work
3. Reporting Retiree Information
4. Making Employer Contributions
5. Retiree Earnings Limit
6. Annual Compensation Reporting
7. What You Need to Do
8. Especially for KP&F

1. Overview

• Retirees must wait 30 days to return to work with any Retirement System employer.
• Retirees who go back to work for the same employer have a $20,000 earnings limit.
• Employers report when they hire most KPERS retirees and their annual earnings.
• When hiring an employee who retired from a different KPERS employer, employers pay
  contributions based on the “working after retirement” employer rate.

General Guidelines

2. Waiting Period for Returning to Work

All retirees must wait 30 days after their KPERS retirement date to go back to work for any Retirement System employer. Their retirement date is not their last day at their employer. It is the first day of the month following their last day on payroll. To calculate the 30-day waiting period, count the day after the retirement date as day one.

3. Reporting Retiree Information

Employers need to report employment and annual earnings for most KPERS retirees who work for their employer.
Use the Report of Employment for KPERS Retirees form (KPERS-1R) available at www.kpers.org.

Which Retirees Should You Report?

If employee retired from your employer
Report all retirees, no matter what position they are filling, except “daily call” K-12 substitute teachers.

If employee retired from a different KPERS employer
Report any retiree working in a position that would otherwise be a KPERS-covered position.

If the position is not normally a KPERS-covered position, you do not need to report
that retiree. This only applies to retirees from a different employer.

4. Making Employer Contributions

“Working After Retirement” contributions only affect employers that hire a KPERS retiree who retired from a different KPERS employer. You should make contributions when the position a retiree is filling would otherwise be a KPERS-covered position and that retiree began employment on or after July 1, 2006 .

Do not make contributions for positions held by retirees who retired from your employer.

How Much Should You Remit?

School employers

Payroll Dates: July 1, 2007, through June 30, 2008
Rate: 15.47% of gross compensation

Payroll Dates: July 1, 2008, through June 30, 2009
Rate: 15.95% of gross compensation

State employers

Payroll Dates: July 1, 2007, through June 30, 2008
Rate: 10.99% of gross compensation

Payroll Dates: July 1, 2008, through June 30, 2009
Rate: 11.35% of gross compensation

How the Remittance Process Works

1. Employer sends Report of Employment for KPERS Retirees form (KPERS-1R).

2. KPERS reviews the report and sets up a special EFT account if the employer has hired a retiree who retired from a different employer.

3. KPERS sends instructions to the employer on how to use the special EFT account.

4. Employer uses this special EFT account to pay employer contributions based on the “Working After Retirement” rate and gross compensation.

5. Contributions sent to this special EFT account are done with a separate EFT phone call within three business days after each payroll warrant date. Do not include these contributions in your regular EFT remittance call.

6. Complete a new Report of Employment for KPERS Retirees form (KPERS-1R) and add additional contributions as more retirees are hired.

5. Retiree Earnings Limit

If Employee Retired From Your Employer
Retirees have an earnings limit if they return to work for an employer that they worked for during their last two years of KPERS participation and they retired on or after July 1, 1988. Employees who retired before July 1, 1988, do not have an earnings limit.
Example: Employee retired from the Department of Transportation and returns to work for the Department of Revenue. This would be going back to work for the same employer because all State agencies, boards, commissions and Board of Regents institutions are all under the State of Kansas as one employer.

If Employee Retired From a Different Employer
Retirees do not have an earnings limit if they return to work for a different employer than one they worked for during their last two years of KPERS participation.
Example: Employee retired from USD 501, Topeka and returns to work for USD 437, Auburn-Washburn. This would be going to work for a different employer.

Earnings Limit Exceptions
Retirees returning to work in certain positions are exempt from the earnings limit: Licensed nurses at State institutions, daily call substitute teachers, and certain legislative staff. “Daily call” K-12 substitute teachers are substitutes who are paid on a daily basis for their services. They are not required to work every day and are not under contract. The earnings limit does apply to teachers who are not on daily call, teachers on temporary status and replacement teachers.

Important for You to Know

• Earnings below the $20,000 limit do not impact benefits.
• The limit is tracked by calendar year.
  Another $20,000 allowance begins each January.
• When retirees reach the $20,000 limit, they have two options:
     1. Stop working and receive KPERS benefits for the rest of the calendar year
     2. Continue working and stop receiving KPERS benefits until the next calendar year
• When a retiree reaches the earnings limit, please complete a Retiree Earnings Limit form (KPERS-15S).

6. Annual Compensation Reporting

Near the end of each year, KPERS will send an annual Employer Report of Compensation for KPERS Retirees. Please complete and return the report with the annual gross compensation of each KPERS retiree.

7. What You Need to Do

1. Complete a Report of Employment for KPERS Retirees form (KPERS-1R) within ten days anytime a retiree who meets the criteria begins employment. You only need to include that retiree’s information, not your entire list. KPERS prefers you e-mail the electronic file of the form, but you can mail or fax a printed report if you need to.
   – E-mail: kpersFS@kpers.org
   – Fax: (785) 296-6057
   – Mail: Kansas Public Employees Retirement System
   Attn: Fiscal Services/Retiree Employment
   611 S. Kansas Ave., Suite 100
   Topeka , KS 66603

2. Make “Working After Retirement” employer contributions when hiring an employee who retired from a different KPERS employer.

3. Complete a KPERS Retiree Earnings Limit form (KPERS-15S) for employees who retired from your employer and reach the $20,000 earnings limit.

4. Complete an annual retiree compensation report.

8. Especially for KP&F

Working after retirement for KP&F has a few different rules. KP&F retirees who retired on or after July 1, 1988 , have an earnings limit like their KPERS counter-parts if they return to the same employer. The allowance cycle and reporting are the same.

How KP&F is Different

• The annual KP&F retiree earnings limit is $15,000.

• The State of Kansas is not considered all one employer.

• KP&F retirees going to work in a KPERS position become KPERS members just like other employees. Employees make employee contributions and earn service credit. And employers make regular employer contributions.

Contact KPERS With Questions

• E-mail: kpersFS@kpers.org
• Toll-free: (888) 275-5737
• In Topeka: (785) 296-6166