DA Memo - December 29, 2004
New Disability Administrator
Effective January 1, 2005, DCG Resource Options, LLC will begin administering the KPERS long-term disability plan. KPERS' long-term disability plan will not change; DCG will simply be administering the same disability benefits that SBL administered for many years. Beginning January 1, 2005, direct your disability-related questions to DCG Resource Options, LLC, toll-free at 877-202-5300. Please see the enclosed letter describing this change in greater detail.
Letter from KPERS (Word doc)
Notice of Modification to Disability Certificate
(PDF, 37KB)
New Beneficiary Options
Due to new legislation, all active members can name separate beneficiaries for insurance and retirement benefits beginning January 1, 2005. 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:
1. KPERS benefits (return of contributions and interest).
2. Life insurance proceeds (basic and optional life insurance).
Members who are happy with their current designations do not need to do anything. This new option is purely for members who wish to take advantage of the change. New Designation of Beneficiary forms (KPERS-7/99) are available on KPERS web site. We have also enclosed a sample for your reference.
As in the past, each time members complete a beneficiary form, that form cancels all forms that they have previously completed. It is important that members complete the entire form each time with all the beneficiaries they intend to have. If a member only completes Part C and signs in Part G, that beneficiary will receive all of his or her benefits.
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 primary 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.
Example #1
John is married and has $60,000 in optional life insurance coverage.
On his Designation of Beneficiary form (KPERS-7/99), John names his wife,
Sue, in Part C as the only primary beneficiary for his retirement benefits.
He then names his two children and his wife as beneficiaries for his life
insurance benefits in Part E.
John dies as an active member at age 58 with 15 years of credited service. As his sole primary beneficiary for retirement benefits, Sue can choose between receiving all of his contributions, plus interest, or receiving a monthly benefit for the rest of her life. Additionally, Sue and their two children will split John's basic and optional life insurance proceeds.
Example #2
Joyce is married and is covered by KPERS basic life insurance. She wants
her husband to receive all her benefits. On her Designation of Beneficiary
form (KPERS-7/99), Sue fills out Part C with her husband's information,
leaves the rest of the form blank and signs in Part G. If Sue dies as
an active member, her husband will receive all her retirement and life
insurance benefits because she has named no other beneficiary.
Example #3
Lisa is divorced and has $10,000 in optional life insurance coverage.
Lisa wants her mother, Alice, to receive her retirement benefits. Lisa
has a child, Jack, from her previous marriage, who she wants to receive
her life insurance proceeds. Lisa names Alice in Part C of her beneficiary
form and Jack in Part E.
Lisa dies as an active member at age 40 with five years of credited service. Her mother, Alice, will receive all of Lisa's contributions, plus interest. Jack will receive Lisa's basic life insurance proceeds (150 percent of her annual salary) and the $10,000 from her optional life insurance.
What You Need to Do
- Review page 3 of the new Designation of Beneficiary form (KPERS-7/99) for detailed information on naming beneficiaries, including the new option.
- Inform employees of their new beneficiary option. Also, remind employees that they do not need to complete a new form if they are happy with their current designations.
- Download the new Designation of Beneficiary form (KPERS-7/99) from www.kpers.org for use beginning January 1.
- Contact KPERS InfoLine with any questions.
• kpers@kpers.org
• 1-888-275-5737