Employer Manual
Revised:
The Retirement Info Center is the resource for members within 5 years of retirement. Find answers to the when, how-much and how-to questions, and a lot more.
Age | Years of Service | Points |
At least 65 | 1 year or (2 or more quarters)* | n/a |
At least 62 | 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:
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.
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.
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
Requesting a estimate from KPERS
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
Documents needed for retirement
Member
Joint annuitant
Acceptable proof of birth | A photocopy of one of the following:
If unable to provide proof of birth with any of the above, submit photocopies of two of the following:
Acceptable proof of name change | A photocopy of one of the following:
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:
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.
Early notification pay/Early resignation bonus: when an employee notifies the school of his/her plan to resign and in turn receives a stipend/bonus for letting the school know in advance. This stipend/bonus is KPERS wages.
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:
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:
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:
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:
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.