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DA Memo - July 30, 2004
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  1. New Beneficiary Options
  2. Upcoming Board Election
  3. Employees with Green Cards
  4. Employer Affiliation Date Directly Affects Final Average Salary Criteria

 

1. New Beneficiary Options

New legislation allows members to designate separate beneficiaries for retirement benefits and life insurance benefits. Previously, when a KPERS member named a beneficiary, all of his or her benefits went to the same beneficiary. Members can now name separate beneficiaries for:

  • KPERS benefits (return of contributions and interest and the $50,000 benefit for a
    job-related death).
  • Life insurance proceeds (basic and optional life insurance).

The law provides for a two-step implementation process.

Step One: Now Through December 31, 2004
Members with a medical or financial hardship can make the split beneficiary designation now. Affected employees should write a letter of request briefly explaining their situation and include their contact information. Address letters to:

Glenn Deck, Executive Director
KPERS
611 S. Kansas Ave., Suite 100
Topeka, KS 66603-3803

Step Two: Beginning January 1, 2005
Beginning January 1, 2005, all members will be able to name separate beneficiaries for insurance and retirement benefits. New Designation of Beneficiary forms (KPERS-7/99) will be available at that time. We will send a reminder along with a copy of the revised form.

Important for Members to Know
One of the significant benefits of this change is that it allows employees to preserve their spouse's right to a pension by naming the spouse as sole beneficiary for their KPERS benefit, and at the same time, naming someone else to receive their life insurance proceeds.

Please remind members that instead of a loved one receiving returned contributions when the member dies, a spouse can receive a continuing monthly benefit for the rest of his or her life if the member meets one of these situations when he or she dies:

  • Member is at least age 55 with ten years of service and eligible for retirement, and
  • The spouse is the sole primary beneficiary.
  • The spouse can begin receiving a monthly benefit immediately.

or

  • Member has 15 or more years of service and is not yet eligible for retirement, and
  • The spouse is the sole primary beneficiary.
  • The spouse can begin receiving a monthly benefit at the earliest time the member
    would have been eligible for retirement.

Members who designate their spouse as sole primary beneficiary can still name contingent beneficiaries.

What You Need to Do

  • Inform any employees with a medical or financial hardship of their new beneficiary option.
  • Watch for new forms and more beneficiary designation information in December.


2. Upcoming Board Election

The next issue of KPERS Papers will announce the 2005 KPERS board of trustees election and ask for interested candidates.

All active and retired members (except Judges) are eligible to become candidates. To get on the ballot, members need to complete a petition form that includes 100 signatures from eligible active and retired members. If the potential candidate is a school member, all signers must be school members. If the potential candidate is a non-school member, all signers must be non-school members. Potential candidates can get the necessary forms and information from our web site or by calling the KPERS InfoLine. The petition deadline is November 30, 2004.

What You Need to Do

  • Hand out the KPERS Papers newsletters when they arrive.
  • Encourage members to become candidates.
  • Direct members to the KPERS web site (www.kpers.org) or the InfoLine (888-275-5737) for additional information.
  • Post the enclosed flyer where members can see it. Feel free to make copies as needed. You can also e-mail kbasso@kpers.org to receive an electronic version if you'd like to e-mail it to members or post it on an intranet site.

What's Next
In late February or early March, you will receive voting materials and information to help your employees participate in the election.


3. Employees with Green Cards

Issued by U.S. Citizenship and Immigration Services, an Alien Registration Receipt Card, more commonly known as a "green card," gives immigrants the legal right to permanently live and work in the United States. Green card holders also receive health, education and other benefits. If you have an employee with a green card who is working in a covered position, that employee is eligible to become a member and required to make contributions to the Retirement System.


4. Employer Affiliation Date Directly Affects Final Average Salary Criteria

All members working for employers that affiliated on or after January 1, 1994, (including future service only) are limited to a three-year final average salary with no add-on pay. "Add-on pay" is any additional compensation from your employer including pay for:

  • Sick leave.
  • Annual or vacation leave.
  • Personal days.
  • Holiday pay.
  • Bonuses.
  • Any compensation dependent upon termination.

When determining final average salary for a member, you must look at the date your employer affiliated with each system (KPERS, KP&F or Judges). Even if a member has an inactive KPERS or KP&F account with an old affiliation date, that member is limited to a three-year final average salary with no add-on pay if your current employer affiliated on or after January 1, 1994.

If a member previously worked for a different employer and the add-on pay was being paid at the time the member left that employer, a four-year final average salary with add-on pay can be used for that previous system benefit only.

Reference: K.S.A. 74-4902 (17)

Example
John belongs to KPERS and works for a city with an affiliation date before January 1, 1994. He is paid for unused vacation leave when he leaves employment. John is then hired for a KP&F position by a county with an affiliation date of January 1, 1994. When he retires under his KPERS, we will calculate a four-year final average salary with the add-on pay and a three-year without and use whichever is highest for the KPERS benefit only.

When he retires under his KP&F, we will only calculate a three-year final average salary with no add-on pay. Even if he retires under both systems at the same time, he is limited to a three-year final average salary with no add-on pay for his KP&F benefit. If portability applies, salaries from both systems may be used, but the salary calculation from the employer with the affiliation date of January 1, 1994, or later may not include any add-on pay.