1. 2019 Pre-Retirement
Seminar

2. 3 SOURCES OF RETIREMENT INCOME
Personal Savings
Social Security
YOUR
RETIREMENT
INCOME
KPERS

3. KPERS 457 AFTER RETIREMENT
Stay in KPERS 457 after retirement
Retirement Specialist to help
Great for retirement lump sums
Sick/vacation payouts
Retirement incentive
kpers457.org
Use (A)
If 457 rep is NOT THERE or
If 457 rep is THERE but NOT PRESENTING
Use (B)
If 457 rep IS PRESENTING
(A)
Now for a few words about KPERS 457. KPERS 457 is the voluntary 457(b) deferred compensation savings plan for State and some local employees. Some of you have it and some may not. If you’re in the plan before retirement, you can stay in the plan after you retire.
There are several benefits to staying in the plan:
You may pay less in costs compared to a brokered account. We spread administrative costs over 25,000 other people, which leaves more money available to work for you. Before you make a decision, look at all of the services you’d pay for. Then decided if it’s better for you to stay in KPERS 457 or roll it into account.
Another reason is that you know us. You know KPERS. And KPERS has your best interests in mind. It’s our fiduciary responsibility. KPERS 457 representatives are not commissioned sales people. They are paid a salary, and are expected to care for you and your savings….instead of selling you something. With KPERS, you know what to expect.
Continue to have easy account access, so you can make investment changes 24/7 online or by phone, quick and easy
Flexible payout options when you are ready to start taking your money, and you can change it at any time.
There are lots of things to consider as you decide whether you’re going stay in the KPERS 457 plan or take it somewhere else.
If 457 rep is NOT there
But you’ll have help from KPERS 457. If you have any questions, be sure to contact KPERS 457; contact information is on this slide.
If 457 rep IS there but NOT presenting
If you have any questions, be sure to see (title & name) with us tonight.
(B)
Now for a few words about KPERS 457. KPERS 457 is the voluntary 457(b) deferred compensation savings plan for State and some local employees. Some of you have it and some may not. I have asked (name & title) with the KPERS 457 Plan to come and talk about it with you, especially what you can do with your KPERS 457 in retirement.

4. TYPE OF RETIREMENT PLAN
KPERS is a 401(a) defined benefit plan
Contrast to defined contribution plans (personal savings plans)
457(b)
403(b)
401(k)
IRA

5. EMPLOYEE CONTRIBUTIONS
6% of pay
Deducted pre-tax for federal taxes
Interest credited June 30 based on balance December 31 of the previous year
Balance doesn’t determine your benefit. Only important if you withdraw or die before retirement.

6. EMPLOYER CONTRIBUTIONS
Are not deposited into your account
Go into the KPERS Trust Fund for:
Disability benefits
Death benefits
Retirement benefits

7. KPERS MEMBERSHIP KPERS 1 Member
Employee hired before July 1, 2009, and active on July 1, 2009
KPERS 2 Member
All employees first employed in covered positions on or after July 1, 2009, and before January 1, 2015

8. Retirement Eligibility

9. WHEN CAN YOU RETIRE – KPERS 1
Age 65 with 1 year
Age 62 with 10 years
Any age when your age and years of service equal 85
Current age 52
Current years of service + 29
Total points 81
Subtract total from 85 = 4
Divide by 2
4 ÷ 2 = 2
Add to current age = 54
 Age for 85 points

10. WHEN CAN YOU RETIRE – KPERS 2
Age 65 with 5 years
Age 60 with 30 years
No Points

11. EARLY RETIREMENT – KPERS 1
Age 55 with 10 years
The earlier you retire, the more your benefit is reduced
Age
Example
Reduction 62
Full benefit = $1,500/month 0% 60
Reduced benefit = $1,425/month 5% 55
Reduced benefit = $885/month
41%

12. EARLY RETIREMENT – KPERS 2
Age 55 with 10 years
The earlier you retire, the more your benefit is reduced
Smaller reduction if you retire with at least 30 years of service
Age
Example
Reduction < 30 years
Reduction > 30 years 65
Full benefit = $1,500/month 0% 60
Reduced benefit = $920/month
38.6% 55
Reduced benefit = $583/month
61.1%
18.3%

13. THINGS TO CONSIDER BEFORE RETIRING EARLY
The earlier you retire, the more your benefit is reduced
Lifetime reduction
No Automatic COLA
Inflation reduces your buying power over time

14. Benefit Calculation

15. BENEFIT CALCULATION KPERS 1 KPERS 2 40,000 1.75% 20 $14,000 12 $1,167
EXAMPLE
Final Avg Salary x
Statutory Multiplier
Years of Service =
Annual Benefit ÷
Months in Year
Monthly Benefit
40,000
1.75% 20
$14,000 12
$1,167
1.85% 10
+ $7,400
+ $617
Combined (Total)
$21,400
$1,784
KPERS 1: Service before January 1, 2014, is calculated at 1.75%. Service January 1, 2014, and after is calculated at 1.85%.
KPERS 2
EXAMPLE
Final Avg Salary x
Statutory Multiplier
Years of Service =
Annual Benefit ÷
Months in Year
Monthly Benefit
40,000
1.85% 30
$22,200 12
$1,850

16. FINAL AVERAGE SALARY (FAS) – KPERS 1
Hire date before July 1, 1993 (includes non-school members in their year of service waiting for membership)
Average of highest four years (16 quarters) salary including additional pay
Average of highest three years (12 quarters) salary without additional pay
Highest calculation used
Hire date on or after July 1, 1993
Additional pay is lump-sum payout of unused sick leave & vacation pay

17. FINAL AVERAGE SALARY (FAS) – KPERS 2
Average of highest five years (20 quarters) of salary without additional pay
Additional pay is lump-sum payout of unused sick leave & vacation pay

18. Choosing Your Retirement Date

19. CHOOSING YOUR RETIREMENT DATE
All Non-Licensed (classified)
Retirement date = first day of any month
Must be off payroll

20. Benefit Options Maximum Monthly Joint-Survivor Life-Certain
Partial Lump-Sum

21. MAXIMUM MONTHLY BENEFIT OPTION
Monthly benefit for life
Beneficiary receives any remaining contributions
No continued monthly benefit

22. JOINT-SURVIVOR BENEFIT OPTIONS
KPERS 1 Member’s Benefit
50% % (+ /– .4%)
75% % (+ /- .5%)
100% % (+ /- .6%)
KPERS 2 -- Based on actuarial tables
Pop-up Feature --If joint survivor dies before you, benefit increases to Maximum Monthly
Can name only one joint survivor and cannot change

23. LIFE-CERTAIN BENEFIT OPTIONS
If you die within a guaranteed period of time, beneficiary receives benefit for rest of the guaranteed period
KPERS 1
Any Age
5-year Life-Certain
98%
10-year Life-Certain
95%
15-year Life-Certain
88%
KPERS 2
Age 60
5-year Life-Certain
99.8%
10-year Life-Certain
99.4%
15-year Life-Certain
96.5%
Reduction factors based on actuarial tables
Change beneficiaries anytime and name any number of beneficiaries to share benefit

24. PARTIAL LUMP-SUM OPTION
Based on the actuarial present value of your lifetime retirement benefit, not your account balance.
KPERS 1 can be 10, 20, 30, 40, or 50%
KPERS 2 can be 10, 20, or 30%
Monthly retirement benefits are reduced by the same percentage of the partial lump-sum option taken.
2017 Pre-Retirement Seminar

25. Your Online Account

26. KEEP YOUR INFO UP-TO-DATE
Use your online account to update:
Address
Phone
After retirement:
Tax withholding

27. ONLINE ACCOUNT ACCESS

28. LOGIN

29. ONLINE ACCOUNT HOME PAGE
YOUR ACCOUNT
ONLINE ACCOUNT HOME PAGE

30. ACCOUNT SUMMARY – Active Member

31. ACCOUNT SUMMARY – Retired Member

32. Calculate an Estimate

33. BENEFIT CALCULATOR

34. BENEFIT CALCULATOR

35. BENEFIT CALCULATOR

36. Generic Benefit Calculators

37. KPERS-15E BENEFIT ESTIMATE REQUEST FORM

38. The Retirement Process

39. STEPS TO TAKE
Pick your best retirement date
Choose a payment option
Submit application at least 30 days before retirement date
Provide age and name change documents

40. RECEIVING MONTHLY BENEFIT PAYMENTS
Direct deposit form (KPERS-15B)
Paid on last working day of month
Get notice of changes, but no regular payment notice
Payment summary online

41. BENEFITS WILL BE HERE
See Page 5 of Seminar Booklet
KPERS prefunded during your career
Contributions and investment earnings now for when you retire

42. BENEFITS WILL BE HERE
Over $19 billion in assets and growing
Long-term funding shortfall
Keep funding needs in front of the Legislature
We’re your fiduciary

43. RETIREE DEATH BENEFIT
$4,000 death benefit
Taxable for federal tax, but not Kansas taxes
Person, estate, trust or funeral establishment
Beneficiary responsible for taxes
No death benefit for joint annuitant

44. KEEP BENEFICIARY UP-TO-DATE
Time to review beneficiaries
- Marriage - Birth/adoption
- Divorce - Death
- Retirement
Change beneficiaries any time

45. CONTINUING LIFE INSURANCE
Conversion – Basic & Optional
Whole-life option
No health questions
Higher rates, builds cash value
Within 60 days of last day on payroll

46. CONTINUING LIFE INSURANCE
Portability – Basic & Optional
Term insurance option
Must port some member coverage to port spouse coverage
No health questions
Under age 80 and actively at work
Coverage reduces to 65% at age 65
Coverage ends at age 100
Within 60 days of last day on payroll

47. KPERS does not provide health insurance coverage
Contact your personnel office

48. FEDERAL AND STATE INCOME TAXES
Federal: taxable
Kansas: not taxable
You already paid state taxes while working
Other states? Check with that state
Change federal withholding anytime online
1099-R tax form each January

49. 1099-R FORM

50. SOCIAL SECURITY
KPERS will not affect Social Security
Social Security will not affect KPERS
Social Security Administration:

51. Working After Retirement
2017 Pre-Retirement Seminar

52. No Pre Arrangements Prearrangements not allowed (written or verbal)
Working after Retirement No Prearrangement
Prearrangements not allowed (written or verbal)
Anytime before KPERS retirement date OR
During the 60-or 180 day waiting period*
Why follow the rules?
Penalties for employer and retiree
KPERS’ “Qualified Status” with IRS could be jeopardized
Definition of Prearrangement SB 168 Section 2, subsection (9) “…facts and circumstances of the situation indicate that the employer and employee reasonably anticipated that further services would be performed after the employee’s retirement.”

53. Repay benefits paid while working after retirement
Penalty for retiree
Working after Retirement Prearrangement Penalty (Retiree)
Penalty for retiree
Benefit suspended starting month retiree returned to work, ending 6 months after ending employment
Repay benefits paid while working after retirement
Employee certifies on the Application for Retirement Benefits that he has made no prearrangement to return to work for any KPERS employer.

54. Penalty for employer Penalty for employer
Working after Retirement No Prearrangement (Employer)
Penalty for employer
Pays all IRS-associated costs
Pays costs of legal defense
Pays costs for collecting repayment from the employee
School’s “appointing authority” (superintendent*) must certify on the KPERS-15RE form that no prearrangements were made.
*If retiree is being hired as superintendent, the president of school board must sign.

55. Employer Contributions
Working after Retirement – Earnings Limit & Employer Compensation
Retiree Working In
Covered Positions
Non-Covered
No grandfather or great-grandfather status
No hardship exemption
Earnings Limit
No earnings limit
Employer Contributions
Statutory rate (12.01%) on first $25,000
30% on earnings over $25,000
No contributions
Waiting Periods
Retire before age 62 (180 days)
Retire on or after age 62 (60 days)
effective January 1, 2018

56. RETIREMENT CHECKLIST (Page 4)
Find out when you’re eligible
Calculate an estimate
Review payment options
Submit application
Review life insurance
Determine tax withholding
Confirm Social Security
Review health insurance needs
Review your other retirement plans and savings

57. RETIREMENT INFORMATION CENTER
HOME Page - I want to Find - Select (When to Retire)

58. CONTACT INFO
KPERS (Page 6)
Social Security
KPERS 457
Website: ssa.gov
Toll-free:
Toll-free:
Toll-free:
Topeka:
Topeka:
Topeka:

59. KPERS 457 AFTER RETIREMENT
Stay in KPERS 457 after retirement
Retirement Specialist to help
Great for retirement lump sums
Sick/vacation payouts
Retirement incentive
kpers457.org
Use (A)
If 457 rep is NOT THERE or
If 457 rep is THERE but NOT PRESENTING
Use (B)
If 457 rep IS PRESENTING
(A)
Now for a few words about KPERS 457. KPERS 457 is the voluntary 457(b) deferred compensation savings plan for State and some local employees. Some of you have it and some may not. If you’re in the plan before retirement, you can stay in the plan after you retire.
There are several benefits to staying in the plan:
You may pay less in costs compared to a brokered account. We spread administrative costs over 25,000 other people, which leaves more money available to work for you. Before you make a decision, look at all of the services you’d pay for. Then decided if it’s better for you to stay in KPERS 457 or roll it into account.
Another reason is that you know us. You know KPERS. And KPERS has your best interests in mind. It’s our fiduciary responsibility. KPERS 457 representatives are not commissioned sales people. They are paid a salary, and are expected to care for you and your savings….instead of selling you something. With KPERS, you know what to expect.
Continue to have easy account access, so you can make investment changes 24/7 online or by phone, quick and easy
Flexible payout options when you are ready to start taking your money, and you can change it at any time.
There are lots of things to consider as you decide whether you’re going stay in the KPERS 457 plan or take it somewhere else.
If 457 rep is NOT there
But you’ll have help from KPERS 457. If you have any questions, be sure to contact KPERS 457; contact information is on this slide.
If 457 rep IS there but NOT presenting
If you have any questions, be sure to see (title & name) with us tonight.
(B)
Now for a few words about KPERS 457. KPERS 457 is the voluntary 457(b) deferred compensation savings plan for State and some local employees. Some of you have it and some may not. I have asked (name & title) with the KPERS 457 Plan to come and talk about it with you, especially what you can do with your KPERS 457 in retirement.

60. Thank You for attending