Recipients of monthly benefits who have received at least one monthly retirement allowance by July 1, will receive an automatic 3% increase on their July allowance.
Employees whose effective retirement date is June 1, 1997, or earlier will receive the 3% increase.
The increase results from the legislation passed by the 1996 General Assembly which provides an annual increase on July 1 equal to the percent change in the Consumer Price Index for all urban consumers for the preceding calendar year. The 1996 raise under the law was 2.8%.
In order to apply for disability retirement benefits from KERS, CERS or SPRS, an employee must file the disability application at the retirement office within 12 months of the last day of paid employment in a regular full-time position.
Workers' Compensation is not considered "creditable compensation," or salary, for retirement purposes. Unless the employee is being paid sick leave at least equal to the employee's regular full-time pay, the employee is considered off-payroll for retirement purposes.
That means the employee may lose the right to apply for disability retirement if he remains on Workers' Compensation and does not file a disability application at the retirement office within 12 months of the date he began receiving Workers' Compensation.
Any employee who has a medical condition that could last for 12 months should contact the retirement office for information about disability retirement.
Internal Revenue Code Section 401(a)(17) limits annual compensation for determining retirement benefits to a maximum of $150,000 in fiscal year 1996-97 and $160,000 in fiscal year 1997-98. This is the maximum compensation that may be used in determining retirement benefits.
No employer or employee retirement contributions are paid on salary above these limits.
Few members are directly affected by the annual compensation limit.
The limit can affect employees earning over $60,000 who retire August 1 and who will receive large payments for compensatory time or overtime. In these cases, the limit can generally be avoided by working additional months in the fiscal year.
Congress has repealed the $5,000 death benefit exclusion for beneficiaries of individuals who died after August 20, 1996.
Generally, the death benefit exclusion applied to lump sum payments (refunds of member contributions at the time of death and the $2,500 death benefit) or payments which were not paid under a joint and survivor annuity.
If you have received payments this year because of a member's death, you should contact a qualified professional tax advisor for further information.
| Year | Stocks | Bonds | Real Estate | Short Term | Total Portfolio |
|---|---|---|---|---|---|
| 1992 | 13.705% | 13.982% | -2.592% | 5.119% | 11.668% |
| 1993 | 16.028% | 12.060% | -1.757% | 3.484% | 12.252% |
| 1994 | .831% | -.846% | 5.581% | 3.767% | 1.051% |
| 1995 | 25.689% | 11.042% | 4.002% | 5.759% | 18.973% |
| 1996 | 25.965% | 5.009% | 1.332% | 5.898% | 17.637% |
The June 30, 1996 Actuarial Valuation certified that funding requirements were being met. The following table shows the change in funding from June 30, 1995 to June 30, 1996.
| Pension Fund | Insurance Funds | |||
|---|---|---|---|---|
| 1995 | 1996 | 1995 | 1996 | |
| KERS | 92.1% | 98.8% | 8.7% | 14.1% |
| CERS | 94.3% | 100% | 7.5% | 12.1% |
| SPRS | 90.0% | 97.1% | 17.8% | 27.5% |
Last Updated: 7/01/2002