Recipients who are drawing a benefit as of June will receive a 3.4% increase on their July retirement allowance. The increase will be given automatically.
Cost of living adjustments are based on the percentage increase in the annual average of the Consumer Price Index for all urban consumers and applied to benefits each July. This is the largest raise since the automatic cost of living provision was enacted in 1996.
A check stub will be mailed July 14, 2001 to recipients to show the new amounts.
Active and retired members of CERS elected two individuals to serve on the Board of Trustees for a four-year term beginning April 1, 2001.
Ed Davis is a retired officer of the Jefferson County Police, where he served from 1965 to 1987. He is also former Treasurer of the City of Whipps Millgate. Mr. Davis is the first candidate to appear on the ballot as a result of a petition.
John Freeman is currently employed as Fiscal Coordinator for Extended School Services with the Jefferson County Public Schools.
A total of 13,777 valid ballots were returned. In accordance with 61.645(4)(b), it will require at least 1,378 eligible signatures to nominate a candidate by petition for the next CERS trustee election.
The members of the General Assembly worked hard to address issues important to public employees in Kentucky.
In particular, Representative Charles Geveden, Chairman of the House State Government Committee, and Senator Albert Robinson, Chairman of the Senate State and Local Government Committee, served as the gatekeepers for retirement legislation in their respective chambers. Bills that would have been financially harmful to the systems did not get past their committees.
Following are the changes enacted by the 2001 General Assembly.
Representative James Comer was the primary sponsor on a bill to provide special benefits when a public employee is killed or disabled because of his public duties.
House Bill 278 was named the "Fred Capps Memorial Act" after the Commonwealth Attorney who was killed in June of 2000 by a man he was prosecuting.
The provision provides for special spousal benefits and payments to dependent children, the same as for hazardous members, if the employee is killed or permanently disabled by a traumatic accident or act of violence related to his job.
House Speaker Jody Richards filed an amendment to House Bill 278 to change the definition of final compensation for nonhazardous employees.
Final compensation is the average salary used for determining benefits at the time of retirement.
For nonhazardous KERS and CERS employees, final compensation will be the three fiscal years with the highest average monthly salary if the employee (1) retires between August 1, 2001 and January 1, 2009, (2) has a minimum of 27 years of service and (3) whose age and years of service total at least 75.
Years of service includes all service--earned, purchased and unused sick leave.
Using the three highest years instead of the five highest years can result in a significant increase in retirement benefits, especially if the employee has increased earnings in recent years.
The same amendment to House Bill 278 contained a provision to make the cost of purchasing service more uniform. Effective July 1, 2001, nearly all service purchases will be based on 100% of the actuarial cost of the service.
This will increase the cost of buying service which used to be calculated under the delayed method (50% of actuarial cost), including active duty military service (first four years), federal service, university service and service with an agency prior to its participation.
Other types of service which were based on employee and employer contributions plus interest may increase or decrease depending on the age of the employee at the time of purchase and how long ago the service occurred.
The cost of out-of-state service, nonqualified service and other purchases already at 100% of actuarial cost will not increase as a result of this legislation.
However, most purchase factors will increase July 1, 2001, as a result of the five-year actuarial experience study, which indiated that the average employee is retiring at a younger age than previously assumed. In addition, purchase costs will increase for those employees who will be eligible to retire under the high-three final compensation provision.
Employees wanting to "lock in" the cost of purchasing service should make their written request to the retirement office before July 1, 2001. You are strongly urged to deliver your request or send it via certified mail, return receipt requested.
All requests received at the retirement office prior to July 1, 2001, will be honored at the cost method in effect at the time.
Once the systems makes the calculation and the employee fails to make the purchase by the stated deadline, subsequent cost calculations for service will be at the higher rate.
Unless you are retiring in the very near future, you do not need to make an appointment to purchase service credit. Service purchases can be handled through the mail.
Not affected by this change are repayments of previously refunded service, contributions not reported due to error and conversion of nonhazardous service to hazardous service.
Representative John Vincent was the primary sponsor of a bill to amend the provision related to employees of local school boards. House Bill 254 eliminates the requirement that classified employees must be contracted to work 185 days per school year to earn 12 months service.
Effective with the 2000-2001 school year, a full year of service will be earned by any employee who works 180 or more days and averages 80 or more hours of work per month.
Employees who work less than 180 days and average 80 or more hours of work per month will receive months of service determined by dividing the actual number of days worked by 180 and multiplying by 12, but the maximum number of months cannot exceed 11.
Senator Lindy Casebier filed an amendment to House Bill 254 to allow those classified employees of school boards retired or retiring between July 1, 2000 and August 1, 2001, to have an option on how their service in the 2000-2001 school year is determined.
These individuals may choose to receive service by using the new method in which 12 months is given for 180 days of work or may have service determined under the old method by dividing the actual number of days worked by 20 and rounding to the nearest month.
Senator Casebier proposed the amendment because some retiring employees' final compensation may be lower under the new method.
However, where the employee needs the added service for insurance benefits or vesting purposes, the newer method may produce greater benefits. Employees or those already retired should review their options carefully.
If you are a classified employee of a school board who retired after July 1, 2000, you may contact the retirement office to determine how this provision might affect you.
Finally, Representatives Tim Feely and Robert "Buddy" Buckingham sponsored House Bill 13 which provides that retired hazardous members who are elected to local government offices will participate in CERS. This corrects and makes uniform a change made in 1998.
If you are currently a retired hazardous member holding an elected local government office, you have the option to elect not to participate in CERS, and purchase service back to July 1998 in the position.
Any retired hazardous member holding an elected local government office who does not wish to start contributing to CERS should contact the retirement office as soon as possible. Unless the election is made not to contribute by August 20, 2001, contributions will be withheld.
Please be patient with the retirement office this summer. As you can imagine, these changes will generate thousands of requests.
Once you make a request to purchase service or for a benefit estimate, allow several months for a response. The retirement office will give priority to those members retiring this year, and on a first come basis afterwards.
If you are retiring this year, please call for an appointment or submit your Notification of Retirement 60 days prior to termination.
Also, follow these tips:
Take the time to fill out the Notification of Retirement completely.
If you submit a form which does not contain all the necessary information, we cannot process it and it will be returned to you. This may cause you to lose retirement income.
REMEMBER BIRTH CERTIFICATES ARE REQUIRED.
If you are planning on retiring within the next year, make sure you have a copy of your birth certificate and a copy of your beneficiary's birth certificate.
Kentucky law requires you to have your birth certificate on file prior to issuance of your retirement check. Failure to obtain a birth certificate before your intended retirement date could result in your check and insurance coverage being delayed.
If you are not retiring this year, please allow benefits counselors to process those who are retiring first.
And by all means, explore our web page--www.kyret.com.
There is information on calculating the cost of service under the 100% of actuarial cost method as well as a new benefit estimator program. (read on...)
If you have access to the internet, you can now estimate your Kentucky Retirement Systems benefits. Simply go to www.kyret.com and click on the "On-line Retirement Benefit Estimate Program."
This program can provide you with a reasonable projection of future benefits, including the various payment options available to you. Of course, the accuracy of the estimate will depend on the accuracy of the information that you plug in.
To protect your confidentiality, the program does not link to your actual retirement account or require you to give your name, address or other confidential information.
If you are more than two years from retirement, please use this program.
The retirement office expects thousands of requests as a result of the legislation passed by the 2001 General Assembly. Using this program will help you obtain an estimate quickly while helping retirement system counselors assist those who are retiring this year.
If you intend to retire this year, please contact the retirement office so that we can provide you with an estimate which will be based on information in your retirement account. Do not rely on this estimate program if you are making permanent decisions about retirement.
Save this article and follow these step-by-step instructions for using the benefit estimator.
Step 1: Select a retirement date.
Step 2: Fill in your birth date.
Step 3: If your estate or a trust will be your beneficiary, check the box and go to the next step. If you will name a person, such as your spouse as beneficiary, fill in your beneficiary's birth date.
Step 4: Choose your agency. There are nearly 1,400 agencies listed. The agency you select determines the system, benefit factor and treatment of sick leave. Some agency names are abbreviated.
Step 5: Enter your total service credit in months as of the end of the month prior to the retirement date you entered in Step 1.
For example, say you would like to retire August 1, 2006, and you will have 240 months this June. You also plan to purchase 5 years of nonqualified service before you retire.
You would have total service July 31, 2006, of 240 months + 60 months nonqualified + 61 months additional employment for a total of 361 months.
If you have service in more than one system, enter total service for each appropriate system or for each type of coverage within a system (hazardous or nonhazardous).
Step 6: If you have service in the Judicial Retirement Plan, Legislator's Retirement Plan or the Kentucky Teachers' Retirement System and you plan to retire on combined accounts, list the months of service in the appropriate box. This service will be used to determine your total months of service, but not the amount of benefits.
Step 7: Note if you had continuous service from January 1, 1998, through January 31, 1999. This is used to determine the KERS nonhazardous benefit formula factor.
Step 8: Enter your final monthly salary. You may enter it with or without cents (2500 or 2500.00).
Step 9: Enter your accumulated sick leave balance in hours.
Step 10: Enter your compensatory leave balance. The program will compute the value of your compensatory leave based on the salary given in Step 8 and will add it to your final salary.
Step 11: Indicate whether you work 7.5 or 8 hours per day.
Step 12: If you are interested in the Social Security Adjustment Options, fill in your estimated monthly Social Security benefit at age 62.
Step 13: You have two choices. Either estimate your final compensation or fill in salaries for actual fiscal years.
If you have figured your final compensation or are estimating more than five years into the future, you may simply want to check the box and type in a figure.
It is hard to predict salary increases very far into the future, because economic factors and promotional opportunities play a major role. For long range projections, you may want to use a conservative salary figure. It is better to end up with more than you estimated, rather than the other way around.
If you are within five years of retirement, type in your actual fiscal year salaries. Remember, if retiring during a fiscal year, only include actual salary and months of service as of your retirement date.
For example, if retiring August 1, you will have only your final monthly salary and 1 month of service in that fiscal year.
If you are eligible for final compensation based on the three highest years, you only need to type in three fiscal years of salary, so long as they contain at least 24 months of service. If you do type in more years of salary, the program will automatically select the appropriate number of fiscal years to use.
NOTE: There is a federal limit of $170,000 annual salary for pension purposes. While your salary may be considerably less, you can exceed the $14,166.67 average monthly maximum if you have a large compensatory leave balance and retire August 1.
If the program gives you a message that you have exceeded this amount or if your salary for the fiscal year prints out as $14,166.67, you may want to consider changing your retirement date to be later in the fiscal year to gain full benefit of the payment for compensatory time.
A person earning $70,000 with 240 months of compensatory time would exceed the $14,166.67 monthly maximum if retiring August 1, but not if retiring September 1.
Step 14: Click on the "Show Estimate" button. If you have completed all the required fields correctly, you will be shown the payment options available to you to help you with your financial plans.
Next year, employees, inactive members and retired members of the Kentucky Employees Retirement System will vote for two individuals to serve on the Board of Trustees.
Per KRS 61.645, the Board may place up to three names on the ballot for each position to be filled.
The Board of Trustees is asking for names of members who would be interested in running for the two KERS trustee positions.
To be eligible a person must be a member or retired member of KERS. The full board meets a minimum of five times per year.
In addition, members appointed to certain committees may have monthly committee meetings to attend. Board members do not receive a salary. Members may receive a per diem and necessary travel expenses.
If you are interested, please send a resume (be sure to include your Social Security number) to the retirement office by August 1, 2001.
The Board of Trustees will select six names (three for each position) at the August meeting that will appear on the ballot to be mailed in January 2002. New board members will serve from April 1, 2002 to March 31, 2006.
June 21 & 22, 10 a.m. to 3 p.m.
Farnham Dudgeon Civic Center, Frankfort
Kentucky Retirement Systems will be conducting a special seminar to explain retirement benefits and the legislative changes enacted by the 2001 General Assembly with special emphasis on the "high 3."
The same presentation will be given each day, so you may attend the one that is most convenient. Advanced registration is not required. The Civic Center is located on Wilkinson Boulevard in downtown Frankfort at the Capital Plaza.
Why not send a copy of your birth certificate and your spouse's to the retirement office before you retire. That will be one less thing you have to do when you apply for retirement. Write the member's Social Security number on each certificate.
Last Updated: 7/11/2002