KNEA Retired Program

• KPERS and Retirement
• Answers to frequently asked member questions about retirement options (by the KNEA Legal Department)
• Newsletters
• Pre-Retired Membership Form 
• Retired Membership Form
• 2008-2009 KNEA-Retired Executive Committee

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Forms are available by calling 1-800-432-3573 or by clicking on this link.

President
Judy Day, Arkansas City

Vice President
Alma Lee Powers, Ulysses

Secretary/ Treasurer
Janis Taylor, Overland Park

Past President
Terry Jochems , Pratt

The Apple Corps Editor
Rowena Turk , Overland Park

KNEA Board
Betty J. Morgan, Paola

Staff Consultant - Kevin Riemann

You have ONE chance ONLY to choose your retirement option

Retirement Options
Future Benefit Increases
Computing Your Retirement

Before you retire from KPERS, you must select from various retirement options. After retirement, this designated retirement option cannot be changed according to Kansas law. “You are gambling with your future, so consider carefully your retirement and survivor options,” said David Schauner, KNEA general counsel.

For details, talk to your KPERs representative or visit the KPERs Web site. Use KPERS and your employer's designated agent as resources. E-mail KPERS at kpers@kpers.org or call toll-free at (888) 275-5737, 296-6166 locally, for any help. You can also schedule a personal counseling appointment with a KPERS staff member to discuss your retirement options.

As a KPERS member, you will receive a monthly retirement benefit for the rest of your life - no matter what. In addition, KPERS has retirement payment options that add flexibility and allow you to provide for loved ones after your death.

Your decision about which option to take is crucial, because once you make a choice, you cannot change it. Consider all of your options and ask questions until you are certain you have all the information you need to make the best decision for you and your loved ones.

First Things First

The first benefit decision you need to make before retiring is whether to receive your entire retirement benefit in monthly payments or, at the start of your retirement, take part of your retirement benefit in an up-front, lump-sum payment and receive the balance of your benefit in reduced monthly payments.

The retirement options you must choose from are as follows:

Partial Lump-Sum Option
Choosing this partial lump-sum option means that you will receive a single lump-sum payment equal to a given percentage of your lifetime benefit's actuarial present value. You will then receive the rest of your retirement benefit in reduced, regular monthly payments.

PLSO payment amounts
The PLSO is available in 10, 20, 30, 40 or 50 percent amounts. The percentage you select determines the size of the lump sum and the resulting decrease in your monthly benefit amount. For example, a 40 percent PLSO payment would result in a single lump-sum payment equal to 40 percent of the actuarial present value of your lifetime benefit, along with a permanent 40 percent reduction in your regular monthly payments.

Taxes

PLSO payments are taxable income under federal law unless directly rolled over into an eligible retirement account. KPERS is required to withhold 20 percent for federal income tax if you receive the money directly. State taxes may also apply. While the State of Kansas does not tax KPERS benefits as a general rule, Kansas income tax may apply when you take your PLSO money out of an account to which you have rolled it over.

For additional tax information on the PLSO, contact your tax consultant or review the Internal Revenue Service's Publication 575, Pension and Annuity Income.

Future benefit increases

Cost-of-living increases are based on the amount of your monthly benefit. Any future increases would be based on your reduced monthly benefit at the time of the increase. Given the longer life span of retirees today, this factor should be considered when deciding whether to select the PLSO.

Maximum monthly Benefit Option

Once you've decided whether or not you want the PLSO, KPERS will establish your maximum monthly benefit amount. This amount will provide the basis for the rest of your options. You can choose to stay with this maximum monthly benefit amount without any additional options. You will then receive a payment each month for this same amount until your death, plus any cost of living adjustments over the years. Your beneficiary will receive the balance of any remaining money that you contributed to KPERS. There is no continued benefit after your death.

Joint-Survivor Options

Because of your personal situation, you might want to provide a monthly benefit for someone after you die. You can do this by choosing a joint-survivor option. Your regular monthly payments will be reduced, allowing for continued payment after your death for the rest of your survivor's life. The higher your survivor's benefit payment is, the lower yours will be during retirement. The difference in your ages is also a factor.

The three joint-survivor options are:

• 50 percent
• 75 percent
• 100 percent

50 percent joint-survivor benefit
You will receive approximately 91 percent of your maximum monthly benefit, adjusted for age difference. Your survivor will receive 50 percent of your reduced monthly benefit for his or her lifetime after your death.

75 percent joint-survivor benefit
You will receive approximately 87 percent of your maximum monthly benefit, adjusted for age difference.
Your survivor will receive 75 percent of your reduced monthly benefit for his or her lifetime after your death.

100 percent joint-survivor benefit
You will receive approximately 83 percent of your maximum monthly benefit, adjusted for age difference.
Your survivor will receive 100 percent of your reduced monthly benefit for his or her lifetime after your death.

Pop-up feature

If the person you choose to receive a benefit after your death dies before you, your option is canceled. Your monthly benefit will then increase to your original maximum monthly benefit amount. This is called the "pop-up feature." You cannot name someone else to receive the benefit.

Life-Certain Options

Under certain situations, a life-certain option may better fit your needs.

• There is a significant difference in age between you and your beneficiary.
• You need to be able to change beneficiaries during your retirement.
• You want to have more than one beneficiary.

With a life-certain option you will receive a reduced benefit for life. If you die within the guaranteed period of time from your retirement date, your beneficiary will receive the same monthly benefit for the rest of the guaranteed period.

You can change beneficiaries at any time, and you can have any number of beneficiaries at once. They will equally share the benefit for the remaining time period.

You have three life-certain options.

• five-year: Your benefit is reduced to 98 percent.
• ten-year: Your benefit is reduced to 95 percent.
• 15-year: Your benefit is reduced to 88 percent.

An example

Mary has a maximum monthly benefit of $1,000. She chooses the ten-year life-certain option. She receives $950 monthly for the rest of her life, no matter how long she lives.

Mary dies seven years after she retires. As her chosen beneficiary, Mary's daughter will receive $950 monthly for three more years.

Mary's seven years plus her daughter's three years total the ten years Mary was guaranteed.

If Mary had two daughters named as beneficiaries at the same time, they would share the $950 monthly and each would receive $475 for the three years.

Computing your retirement

Your retirement benefits are based on your age, salary and years of service, including both prior and participating service. See the KPERS Membership Information Manual for more information on the calculation process. You can calculate your estimated retirement benefits online at www.kpers.org or request an estimate from KPERS. These are wise steps when considering your options before retirement.

NEA Member Benefits also provides a retirement calculator.  You can use the calculator in other financial decisions.

Regardless of which benefit option you choose, a $4,000 death benefit is included. You can designate this death benefit to a beneficiary or funeral establishment.

Since your employer is an important part of your retirement process, be sure to keep your designated agent informed of your retirement plans. Try to give as much notice as you can before you retire. Find out from him or her if you are eligible for any additional benefits or programs from your employer and coordinate health care and life insurance coverage. If you don't have one already, you can download and print the Application for Retirement booklet (KPERS-15) from KPERS or contact KPERS to make your request.