KPERS 1 Retirement

Employer Manual

Revised:

7/22



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Age Years of Service Points
At least 65 1 year or (2 or more quarters)* n/a
At least 60 10 years (38 or more quarters)* n/a
Age + Years of Service = 85 | Retire with full benefits

*two quarters round up to one year; 38 quarters round up to 10 years

Members are eligible to receive reduced retirement benefits if they are between ages 55 and 62 and have at least 10 years of service.

If a member is between ages 60 and 62, his or her reduction factor is 0.2 percentage points for each month he or she is under age 62.

If a member is between ages 55 and 60, his or her reduction factor is 0.6 percentage points for each month he or she is under age 60.

Age Estimated reduced benefit Reduction
62 $1,500/mo (max) 0%
60 $1,425/mo 5%
55 $885/mo 41%
Full Retirement Eligibility
Group A Group B
Age 55 with 3 years of service or Age and years of service equal 85 points Age 60 with 3 years of service or Age and years of service equal 85 points
If Group A Correctional Officer retires at age 55 with 3 years, employee must be a Group A Correctional Officer at least 3 years immediately before retirement and retire on the first day of the month after the last day on the payroll. If Group B Correctional Officer retires at age 60 with 3 years, employee must be a Group B Correctional Officer at least 3 years immediately before retirement and retire on the first day of the month after the last day on the payroll.
Early Retirement Eligibility
Group A Group B
Age 50 with 10 years Age 55 with 10 years of service
Must be a Group A Correctional Officer at least 3 years immediately before retirement and retire on the first day of the month after the last day on the payroll. Must be a Group B Correctional Officer at least 3 years immediately before retirement and retire on the first day of the month after the last day on the payroll.

If a member has service in more than one of the plans administered by the Retirement System, they can combine service to vest and to meet retirement eligibility in KPERS. This “portability” should not be confused with portability of group life insurance. They can also usually combine service credit for retirement eligibility. Contact KPERS with questions.

Retirement benefits are calculated using a formula set by state statute. When a KPERS covered employee retires, the formula takes into account the following:

  • The employee's final average salary
  • A statutory multiplier
  • The employee's years of service

Final Average Salary x Statutory Multiplier* x Years of Service = Annual Benefit
*1.75% for service before 2014; 1.85% for participating service January 2014 and after

Final Average Salary

A three-year salary average excluding additional compensation.* This three-year average is based on the employee’s three highest years of pay during his or her career. They do not have to be continuous years.

The member may not use their add-on pay (compensation the employer pays the employee in a lump-sum for unused sick leave, annual leave, comp-time, holiday pay.

  • A three-year salary average excluding additional compensation.* This three-year average is based on the employee’s three highest years of pay during his or her career. They do not have to be continuous years.
  • A four-year salary average including additional compensation.* This four-year average is based on the employee’s four highest years of pay during his or her career. They do not have to be continuous years.

Compensation considered "add-on"

Compensation an employer pays the employee at retirement in a lump-sum for unused sick leave, annual leave, comp-time, holiday leave payout, kelly days, PTO, wellness days and longevity. Add-on compensation is paid only at retirement.

* Add-on pay

KPERS cannot use an early retirement incentive or severance pay as part of add-on pay when calculating the final average salary. School employees have special guidelines.

KPERS will calculate both options and use whichever is higher to calculate the employee’s retirement benefit. If add-on pay is included in final average salary, it is spread over all the days the employee worked in the calendar year he or she retired. It is not credited only to the quarter in which he or she left employment.

The “Spike Law” places the actuarial liability for certain payments on the participating employer. According to K.S.A. 74-49,126, employers are responsible when add-on payments for accumulated sick leave, vacation or annual leave, etc. increase the member’s final average salary by more than 15%.

The employer must pay the Retirement System a lump-sum amount equal to the actuarial liability for benefits attributable to and payable on account of the excess payments over the 15%.

K.S.A. 74-4902(9) states that if a member’s compensation used in calculating his or her final average salary is more than 15% higher than the preceding year, the amount which exceeds the 15% will not be included in compensation.

  • Part-time members who stay in the same position and whose salary is over the 15% because they work more hours (not overtime hours)
  • Raises
  • Bonuses
  • Extra duties, teaching extra classes
  • Longevity if paid early

Note: members with membership dates July 1, 1993, and after do not have add-ons included in their final average salary because this type of compensation should not be reported to KPERS.

Compensation that is not capped

  • Compensation for “add-ons” paid to members if their membership date is before July 1, 1993, and a four-year final average salary is used in their retirement calculation.
  • Any increase in compensation for any member due to reclassification or reallocation to a higher range or level
  • Overtime

Requesting a estimate from KPERS

  • A retirement estimate is calculated the same way as an actual retirement benefit.
  • A retirement estimate may use projected salary information.
  • The KPERS office requires a Retirement Benefit Estimate Request form (KPERS-15E) for all estimate requests. Processing will take approximately four weeks.
  • If you are requesting the estimate, the designated agent will need to sign the estimate request form.
  • If the member is requesting the estimate, the member will need to sign the estimate request form.
  • In the event of a discrepancy between an estimate and the actual monthly benefit, the benefit received will be paid in accordance with applicable laws and regulations.
  • To calculate the actual retirement benefit we will use salary information reported on the retirement certification (completed by employer).

Try our KPERS 1 calculator. Just fill in the information and receive a benefit estimate. And remind employees they can estimate their benefits at any time using their online account.

Completing retirement application

  • Submit a retirement application 30 to 60 days before the member's retirement date.
  • From the KPERS forms page, click on the Application for Retirement Booklet (KPERS-15 Booklet). Click to order a supply of printed retirement applications.

Documents needed for retirement

Member

  • A photocopy of the member's birth document.
  • A photocopy of member’s name change document if name is different than name on birth document.

Joint annuitant

  • A photocopy of the joint annuitant’s birth document.
  • A photocopy of the joint annuitant’s name change document if name is different than name on birth document.

Acceptable proof of birth | A photocopy of one of the following:

  • Marriage or other court records showing birth name and present name (If a person has had more than one name change, records submitted must reflect all name changes.)
  • Name Change Affidavit (KPERS-40NC) or other affidavit from a parent listing all name changes
  • Request for Member Information Change form (KPERS-12) signed and submitted to KPERS by designated agent at the time of the name change will be acceptable for name changes occurring during employment at the time of the name change will be acceptable for name changes occurring during employment.
  • Federal Employment Eligibility Verification form (I-9)
  • Driver’s License
  • Social Security card

If unable to provide proof of birth with any of the above, submit photocopies of two of the following:

  • Military record
  • Passport
  • School record, certified by the custodian of the record
  • Vaccination record, certified by the custodian of the record
  • Insurance policy application that shows the age or date of birth
  • Marriage records showing date of birth or age (application for marriage license or church record, certified by the custodian of the record or marriage certificate)
  • Other evidence such as signed statements from persons who have knowledge of the date of birth

Acceptable proof of name change | A photocopy of one of the following:

  • Marriage or other court records showing birth name and present name (If a person has had more than one name change, records submitted must reflect all name changes.)
  • Name Change Affidavit (KPERS-40NC) or other affidavit from a parent listing all name changes
  • Request for Member Information Change form (KPERS-12) signed and submitted to KPERS by designated agent at the time of the name change will be acceptable for name changes occurring during employment at the time of the name change will be acceptable for name changes occurring during employment.
  • Federal Employment Eligibility Verification form (I-9)
  • Driver’s License
  • Social Security card

Request for Member Information Change form (KPERS-12) signed and submitted to KPERS by designated agent at the time of the name change will be acceptable for name changes occurring during employment.

If unable to provide proof of birth with any of the above, submit photocopies of two of the following:

  • Name Change Affidavit (KPERS-40NC) or other affidavit from two persons declaring that the persons have known the applicant by all names in question.
  • Birth documents of natural child if document shows both the given name and the married name.
  • Other documents showing both names in question, such as school records, medical records, insurance policy application, etc.

School non-licensed employees

Non-licensed employees may retire the first of any month after their last day on payroll. KPERS must receive the member’s retirement application at least 30 days before his or her retirement date. Ideally, encourage members to submit their application 60 to 90 days ahead of time. This gives KPERS’ staff time to process the applications with the required documents and time for you to certify member pay.

School licensed employees (including teachers at community colleges)

Licensed employees have special guidelines for selecting a retirement date. School members under the “Continuing Contract Law” must wait until June 1 or after to retire.

If licensed employees choose to retire June 1, they must complete all work on their contract before June 1. Even if your employer’s second quarter does not end until after June 1, you cannot report salary past May 31 if the employee selects a June 1 retirement date. He or she cannot retire June 1 if working any part of June.

Note: Employers must pay all compensation owed to the employees by the first payroll date after their selected retirement date.

Non-school retirement date

Non-licensed employees may retire the first of any month after their last day on payroll. KPERS must receive the member’s retirement application at least 30 days before his or her retirement date. Ideally, encourage members to submit their application 60 to 90 days ahead of time. This gives KPERS’ staff time to process the applications with the required documents and time for you to certify member pay.

Non-school end date

On the retirement certification, enter the employee's last day on payroll as the end date.

Note: Employers must pay all compensation owed to the employees by the first payroll date after their selected retirement date.

Employees may use pay earned through their last day at work as part of their final average salary.

If an employee’s membership date is before July 1, 1993, deduct KPERS contributions from lump-sum payouts for annual, vacation, sick leave and compensatory time at termination or retirement. KPERS may include payouts in the employee’s final average salary. If hired on or after July 1, 1993, do not deduct KPERS contributions from lump-sum payouts for annual, vacation, sick leave and compensatory time at termination or retirement.

Whether you deduct KPERS contributions from pay depends on the contract end date and retirement date.

Retirement date Contract end date Contributions
June 1 June 30 Deduct KPERS contributions from all pay through May 31
Do not deduct KPERS contributions from employee's June pay.
June 1 July 31 Deduct KPERS contributions from all pay through May 31
Do not deduct KPERS contributions from employee's June and July pay.
June 1 July 31 Deduct KPERS contributions from all pay through May 31
Do not deduct KPERS contributions from employee's June, July, August pay.
July 1 June 30 Deduct KPERS contributions from all pay through June 30
July 1 July 31 Deduct KPERS contributions from all pay through June 30
Do not deduct KPERS contributions from employee's July pay.
July 1 August 31 Deduct KPERS contributions from all pay through June 30
Do not deduct KPERS contributions from employee's July and August pay.
August 1 July 31 Deduct KPERS contributions from all pay through July 31
August 1 August 31 Deduct KPERS contributions from all pay through July 31
Do not deduct KPERS contributions from employee's August pay.
September 1 August 31 Deduct KPERS contributions from all pay through August 31

Note: Current statutes provide freedom in how you write contracts for your employees.

However, K.S.A. 74-4940 state that compensation must be paid in 12 equal monthly installments when reporting to KPERS.

Cheat Sheet: Summer Pay for Retiring School Employees

Reminder: Do not deduct KPERS contributions form any early retirement incentives or severance payments.

Early retirement incentive: a bonus paid to all retiring employees because of their pending retirement.

Lump-sum payouts: compensation above regular pay for unused leave balances that could include sick leave, vacation leave, annual leave, compensatory time, etc.

  • If a 9-month or 10-month employee has previously been paid in 12 monthly checks and elects to take a payout at the end of May for the balance earned, the final average salary is subject to the 15% cap law for KPERS 1 members and 1.5% for KPERS 2 members.
  • If a 9-month or 10-month employee has previously been paid in 12 monthly checks and does not elect to be paid for the balance earned in May, the employee must wait to retire until all wages have been paid (including all summer pay).
  • Please designate on the employer certification if employee was paid over nine, 10, or 12 months in previous years.

All teachers employed at community colleges are covered by the “Continuing Contract Law.” Please refer to the licensed employees section when helping an employee select a retirement date.

If licensed employees retire before the end of the school year, the following applies:

  • When reporting compensation, KPERS can only accept a prorated contribution amount based on the number of days of service in the last month.
  • Do not report additional pay such as sick leave, vacation leave, etc.
  • Do not give daily per diem or daily rates of pay.

For example:

Teacher’s last day is March 10. The teacher’s school contract is $48,000. Report 1/12 of the contract amount for each month in the calendar year through February $48,000/12 = $4,000.

Month Compensation Contributions
January $4,000 $240 (6%)
February $4,000 $240 (6%)
March $1,290.30 $77.62 (6%)
$4,000/31 (days in March) = $129.03
x10 days of service = $1,290.30

Board of Education's list of licensed employees:

  • Educator (teacher, administrator)
  • Audiologist
  • Speech pathologist
  • Occupational therapists
  • Physical therapist
  • Social Worker
  • Registered Nurse
  • Dietitian
  • Licensed professional counselor
  • Licensed clinical professional counselor
  • Psychologist
  • Orientation and mobility instructor

KPERS will calculate the member’s maximum monthly benefit amount. This amount will provide a basis for the rest of the options. The member may choose the maximum monthly benefit amount without any additional options. The member will receive a payment each month for the member’s entire lifetime. When the member dies, there is no continued benefit to a joint survivor. The member’s beneficiary will receive any remaining account balance that has not been paid out in benefits.

Joint-survivor options Retirement benefit If member dies first beneficiary receives
1/2 Maximum benefit (adjusted for age difference) 50% of member's reduced benefit for life
3/4 75% of member's reduced benefit for life
Same 100% of member's reduced benefit for life

Members cannot change the retirement option after he or she retires.

On all the joint-survivor options, if the joint survivor dies before the member dies, the retirement option chosen is canceled. The member’s benefit will increase to the original maximum monthly benefit amount. This is called the “pop-up feature.” The member cannot choose someone else to continue to receive a monthly benefit after their death.

With a life-certain option, the member will receive a reduced benefit for the rest of his or her lifetime. If the member dies within a guaranteed period of time from his or her retirement date, the beneficiary will receive the same monthly benefit for the rest of the guaranteed period of time.

The member can change his or her beneficiary at any time, and the member can have more than one beneficiary. The named beneficiaries will share equally the benefit for the remaining time period.

Life-certain options Percentage of max. benefit
5-year life-certain option 98%
10-year life-certain option 95%
15-year life-certain option 88%
The longer the guaranteed period the more the member's benefit is reduced to pay for the continuing benefit.

~REPLACE MARY EXAMPLE~

The partial lump-sum option is available in 10%, 20%, 30%, 40% or 50% amounts. The percentage the member selects determines the size of the lump sum and the resulting decrease in the member’s monthly benefit amount.

For example, a 40% PLSO payment would result in a single lump-sum payment equal to 40% of the actuarial present value of the member’s lifetime benefit, along with a permanent 40% reduction in the member’s regular monthly benefit.

If the member has chosen the maximum option, one of the life-certain options or the partial lump-sum option, the spouse must complete the spousal consent section of the retirement application. This verifies that the spouse has read, understands and agrees with the retirement option that the member has chosen. The spouse’s signature must be notarized.

In the event a Retirement System member divorces, any annuity, benefit, or accumulated contributions from the Retirement System may be subject to claims by a former spouse under the provisions of a qualified domestic relations order (QDRO).

A QDRO is a court order providing for:

  • Maintenance.
  • Child support.
  • Property division.

Retirement account assets are considered marital assets to the extent they have accumulated during the marriage. Most QDROs result from an agreement between the parties. A former spouse may not receive payment from the Retirement System under a QDRO unless and until the member:

  • Retires - If the member becomes eligible to retire with monthly benefits, the former spouse may be awarded either a lump-sum distribution or a percent of each monthly benefit.
  • Withdraws - If the member ends employment and withdraws his/her contributions, the former spouse may be awarded a portion of the lump-sum distribution.
  • Dies - If a member dies before retirement, the former spouse’s award may be enforceable against the refund of accumulated contributions or the lump-sum death benefit.

Retired members: The QDRO in the proper form may become effective immediately, resulting in the division of the member’s benefits.

Check your EWP To-Do list for certification

When KPERS receives an application for retirement, we will require a last day on payroll and certified contributions for that member. You will receive a request on your EWP To-Do list and under Certifications, asking you to report pay info for the employee who is retiring.

Quick Vid: Certifications