KPERS MEMBERSHIP

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					Kansas Public Employees Retirement System

Membership Information Presentation
Johnson County Benefits Fair September 11, & 12, 2007

Introduction
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KPERS is a qualified, governmental, section 401(a) defined benefit pension plan KPERS administers three separate retirement systems
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KPERS KP&F Judges Retirement System

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Retirement benefits - based on a formula and lasts for your lifetime Withdrawal of contributions - 30 days after last day on the payroll. Can only withdraw member contributions.

Designated Agents
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Each employer required to appoint a designated agent Your contact person for retirement matters is your designated agent All communications from KPERS directed through designated agent Designated agents name is on the Annual Statement of Member Account

Membership

Membership
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Mandatory for all employees in covered positions
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Covered position for non-Schools agencies is a position that
 Is

not seasonal  Is not temporary  Requires 1000 Hours of work per year  Is covered by social security

Membership Date
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First day of payroll period following the completion of one continuous year of employment with the same employer

Contributions
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Member Contributions - 4% (Pre-Tax)
Interest earnings - Prior to 7/1/93 earning 8% After 7-1-93 earning 4% Interest computed on December 31 account balance Interest added to account on July 1 Employer contributions not added to member account

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Annual Statements
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Sent out each year - March or April. Show currently named beneficiaries Total contributions and interest in member account Total years of service

Vesting
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Age 65 with any number of years of service 10 years or more of credited service
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included prior, participating and purchased service Termination of employment - Benefits protected Reduced Retirement benefits as early as age 55 Full retirement benefits

Not-Vested
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Membership is protected for five years if contributions are not withdrawn
If member reach age 65 during this five year period, member may retire If member return to employment and contributions are not withdrawn, contributions will be withheld immediately

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Withdrawing Contributions
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Eligible to withdraw contributions & interest 30 days after last day on payroll

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Certified employees cannot withdraw until October 1
Withdrawal of contributions results in forfeiture of all rights and privileges Amount withdrawn may be rolled over or will be subject to tax and possible penalty Vested member and married - spousal consent is required Withdrawal options
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Roll over Cash paid directly to you (Taxable)

Service Credit
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Awarded by quarter
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Rounded to years for calculating
Retirement benefits  Vesting rights
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Types of Service Credit
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Prior Service Participating Service  

Disability period Military service if sandwiched between regular service

Purchasing Service Credit
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Types of service that may be purchased
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       

Year of service Partial year of service Forfeited KPERS service Military service - up to 6 years Out-of-state teaching service In-state and out-of-state non-federal public service Elected official service Peace corps service Vista Service

Payment options
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Service Credit can be paid for by
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Pre-tax payroll deduction Roll over / Trustee to Trustee Transfer Lump sum payment

Benefits

Benefits Members Receive
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Basic Group Life Insurance
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150% of annual compensation $50,000 lump sum Monthly benefit of 50% of final average salary
reduction for benefits received from Workers Compensation)
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On the Job Accidental Death
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(subject to

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Payable to: Spouse, Dependent Children, Dependent Parents Disability Insurance
Members may Purchase  Optional Group Life (if employer is affiliated0

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Benefits Payable On Death of Active Member
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Return of contribution & interest Basic group life insurance On-the-job accidental death benefit
Optional group life insurance (if applicable)
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$50,000 guaranteed issue available Coverage up to $250,000 No Cost to Employer

Disability Benefits
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Definition of Disability
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Own occupation first 24 months Any occupation after 24 months

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Monthly benefit – 60% of current salary 180 day waiting period Maximum Benefit Period – to Age 65 Maximum Benefit amount - $5,000 per month Offset by Soc Sec, Workers Comp, Empl. provided LTD Minimum $100 per month Benefit limitations may apply for mental health conditions Basic Group Life remains in effect Continues to earn credit toward retirement

Surviving Spouse Benefit Option

Surviving spouse named as sole primary beneficiary

•

Member dies and has at least 10 years of service and eligible to retire
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Spouse can elect monthly payments in lieu of return of contributions and interest

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Member dies and has at least 10 years of service but is not eligible to retire
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Spouse can leave contributions and interest on deposit and can draw monthly benefit when member would have been able to retire (age 55)

Beneficiary Information
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Different Beneficiary designation allowed
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KPERS benefits
Return of contributions & interest  $50,000 on the job accidental death benefit
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Insurance Benefits

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Sole or joint primary beneficiary Sole or joint contingent beneficiary Keep beneficiary up to date No beneficiary – Line of descendancy

Retirement

Sources of Retirement Income
Social Security Benefits
Career earnings & retirement age help determine benefits. Average KPERS member retiring at age 62 can expect about 21% of retirement income from Social Security. Average KPERS member retiring at full retirement

Employer-Provided Retirement Benefits (KPERS)
Final average salary and years of service credit determine amount of KPERS benefits. Average KPERS member with 20

Personal Savings
Based on personal contributions and investment performance. Retirees need varying levels of savings based on individual circumstances.
Employer-Sponsored Plans

years of service can expect about
35% of retirement income from KPERS.(a) Average KPERS member with 30 years of service can expect about 52.5% of retirement income from KPERS.(a)
(a) Projections assume current plan design.

State Employees
457 Plan

School Employees
403(b) Plans, 457 Plans, Other Plans

age can expect about 30% of retirement income from Social Security.

Local Employees
State 457 Plan, Other Local Plans

Other Personal Savings

Encourage personal savings by educating members about employersponsored savings plans & other available options.

Increase awareness & understanding of all three sources of retirement income: Social Security, Employer Plans and Personal Savings

Retirement Income Gap at Age 65
KPERS members may need to supplement KPERS and Social Security benefits with personal savings to meet income needs in retirement. Target  KPERS’ benefit percentage depends on years of service.
Replacement Ratio

Minimum = 80%

100%

A ge 65 with 40 yrs

Social Security = 30%

KPERS = 70% [40 yrs x 1.75%]

A ge 65 with 30 yrs

Social Security = 30%

KPERS = 52.5% [30 yrs x 1.75%]

Other = 17.5%

A ge 65 with 20 yrs

Social Security = 30%

KPERS = 35% [20 yrs x 1.75%]

Other = 35%

A ge 65 with 1 yrs 0 0%
Note: Assumes current plan design.

Social Security = 30%

KPERS = 17.5%
[10 yrs x 1.75%]

Other = 52.5%

20%

40%

60%

80%

1 00%

Retirement Income Gap at Age 62
KPERS members retiring at age 62 need additional savings or income (or reduced expenses) to compensate for lower Social Security benefits.
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KPERS benefits same as those for retirees age 65 with same service.
Target Replacement Ratio Minimum = 80% 100%

Age 62 with 40 yrs

Social Security = 21%

KPERS = 70% [40 yrs x 1.75%]

Other = 9%

Age 62 with 30 yrs

Social Security = 21%

KPERS = 52.5% [30 yrs x 1.75%]

Other = 26.5%

Age 62 with 20 yrs

Social Security = 21%

KPERS = 35% [20 yrs x 1.75%]

Other = 44%

Age 62 with 10 yrs

Social Security = 21%

KPERS = 17.5%
[10 yrs x 1.75%]

Other = 61.5%

0%
Note: Assumes current plan design.

20%

40%

60%

80%

100%

Retirement Income Gap at Age 55
KPERS members who retire before they are eligible for Social Security need significant personal savings or other income. KPERS benefits are designed to integrate with Social Security.
Age 55 with 40 yrs

Not achievable.
Minimum = 80%

Target Replacement Ratio 100%

Social Security = 30%

Age 55 with 30 yrs

KPERS = 52.5% [Normal retirement = 85
points]

Other = 47.5%

Social Security = 30%

Age 55 with 20 yrs [Early retirement]
Social Security = 30%

KPERS = 20%

Other = 80%

Age 55 with 10 yrs

KPERS=10% [Early]

Other = 90%

Social Security = 30%

0%
Note: Assumes current plan design.

20%

40%

60%

80%

100%

When Can You Retire
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Full Benefits
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Age 65 Age 62 with 10 years of service credit Any age when combined age and years of service equal 85 points
Age 55 with at least 10 years of credited service  between 60 and 62 reduction of .2% per month  Between 55 and 60 reduction of .6% per month

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Reduced Benefits
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Retirement Benefits
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Based On
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Years of credited service Statutory multiplier (1.75%, 1% or .75%) Final average salary

Final Average Salary
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Membership or in year of service on to July 1, 1993
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Average of highest 4 years (16 quarters) with additional compensations Average of highest 3 years (12 quarters) without additional compensation KPERS will compute it both ways highest will be used

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Employed after July 1, 1993
Average of highest 3 years (12 quarters) without additional compensation Calculate your own monthly retirement benefit
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Sample on page 17

Retirement Date
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The retirement date is the later of the first of the month following the last day on the payroll or The first day of the month after the receipt of the KPERS-15 (Application for Retirement) form in the KPERS office. Submit an application 60 to 90 days prior to the retirement date.

Steps in the Retirement Process
1. 2. 3. 4. Obtain estimate Review Retirement options Submit application Submit with application
• • • Proof of birth Proof of name change Same documents for joint annuitant if named

Monthly Benefit Estimates
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KPERS 15-E
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Estimate of regular compensation and pay for sick and annual leave must be reported on separate lines

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KPERS Benefit Calculator  www.kpers.org  Benefits provision & estimation tool  Most recent annual statement

Retirement Options
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Partial Lump-Sum Option
Maximum Monthly Benefit Option Joint-Survivor Options Life-Certain Options

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Partial Lump-Sum Option
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Based on actuarial present value of retirement benefit

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Partial lump sum can be 10, 20, 30, 40, or 50 percent

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Regular monthly retirement benefits reduced by percent of lump sum taken

Other Payment Options
The remaining options must be considered whether or not you choose a partial lump-sum option
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Maximum Monthly Benefit Option Joint-Survivor Options

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Life-Certain Options

Maximum Monthly Benefit Option
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Member receives the maximum monthly benefit for members lifetime Beneficiary will receive the balance of any remaining money contributions and interest No continued benefit after member’s death

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Joint-Survivor Options
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Joint and 1/2 (50%)
Joint and 3/4 (75%)

91% (+ -) .4%
87% (+ -) .5%

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Joint and same (100%)

83% (+ -) .6%

Pop up feature

Life-Certain Options
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Five-Year Certain: Benefit reduced to 98% Ten-Year Certain: Benefit reduced to 95% 15-Year Certain: Benefit Reduced to 88%

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Retirees Death Benefit
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Return of unused accumulated contributions & interest $4,000 Death Benefit
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May name funeral home as beneficiary of death benefit Named beneficiary to receive any other benefits

Working After Retirement
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Returning to work - same employer
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$20,000 earnings limitation
(hired after 7/1/06)

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Return to work - different employer
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Employers will pay contributions based on an established actuarial rate.
Employee cannot make KPERS contributions once retired.

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Employee is not subject to the $20,000 earnings limitation

Questions