Recipients who are drawing a benefit as of June will receive a 1.6% 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.
Capt. Randy J. Overstreet was reelected to the Board of Trustees by members of the State Police Retirement System. Capt. Overstreet is serving his second four-year term on the Board of Trustees. His term ends March 31, 2003. Capt. Overstreet is Commander of State Police Post 4 in Elizabethtown.
Out of 1,738 members, 838 voted in the election.
Capt. Overstreet was also reelected as Chair of the Board of Trustees at the April 1, 1999 meeting. Walter Pagan was reelected Vice-Chair. Mr. Pagan is one of three trustees appointed by the Governor. His term ends March 31, 2000.
Larry C. Conner was reappointed by Governor Patton to a four-year term ending March 31, 2003. Mr. Conner is Director, Division of Personnel Services, Department of Education.
The Kentucky Retirement Systems has a new address on the world wide web. You can find us at www.kyret.com. Our website includes audit and actuarial reports for the past three fiscal years, useful forms, a Summary Plan Description, copies of previous newsletters, an agency directory, current medical insurance rates by county, factors for calculating the cost of nonqualified service credit and a map to the retirement office in Frankfort.
You may e-mail questions to our office from the website. Be aware that e-mail to state offices is considered open record. That means it is not confidential. You may not want to include personal information in your e-mail such as your Social Security number or salary. Retirement staff cannot provide you with details of your account by e-mail. We are happy to answer general questions about plan provisions or procedures.
You can file your Notification of Retirement with the retirement office several months before your retirement date. In fact, we recommend at least 45-60 days advance notice. Just put the last day you intend to work as the "Last Day of Paid Employment." The earlier you file your form, the more time you have to select your payment option, choose insurance and obtain required information. Exception: If you are not currently employed, your effective retirement date will be the month following the month in which your Notification of Retirement is received by the retirement office.
Your notification of retirement will not be processed if it is not completed correctly. The retirement office will not process Notifications of Retirement that:
Do not show the last day of paid employment. We cannot determine your benefit if we do not know the date you will cease working.
Do not have a completed beneficiary section. We cannot give you payment options unless we know the name and age of the person who will receive benefits in the event of your death.
Are not signed, dated and witnessed. Without your signature and that of your spouse or a witness, we cannot send out an estimate of your benefits for your retirement date.
In general, your last day of paid employment should be the last day of a month. Because your retirement benefits are based on your average salary, it is better to have full months of wages at retirement. A month with less than full wages lowers your average salary.
The first retirement benefit cannot be issued until copies of birth certificates are on file at the retirement office. Obtain a copy of your birth certificate and one for your beneficiary. If a birth certificate does not exist, you will need a letter from the state agency that maintains birth records in your state of birth before the retirement office can accept other proof of birth.
To receive a check in your first month of retirement, all forms and required information must be in the retirement office by the last day of the preceding month. If everything is not received by the end of the preceding month, your retirement benefit will be delayed. Worse, you could have a lapse in medical insurance coverage.
Your completed insurance application must be filed at the same time as your other forms. If your insurance form is not filed until the month you expect your first check, your insurance will not be effective that month. If you do not file your insurance application by the 30th of the month in which your retirement allowance is to begin, you will not be eligible for insurance until the next open enrollment period.
You must file a completed direct deposit form or file a written request to be paid by check delivered by mail. Until the retirement office knows in which form you want your monthly benefits, we cannot issue your benefits. Direct deposits are made on the 14th day of the month or the last working day before the 14th if the 14th falls on a weekend or holiday. Checks are delivered to the Frankfort Post Office on the 14th day of the month--the date the post office delivers it to you is not guaranteed from month to month.
No payment will be made until you complete your Estimated Retirement Allowance form on which you select your payment option. If you do not complete and return this form within 6 months of your effective retirement date for early retirement, your retirement will be voided.
If you are requesting the cost of a service purchase when submitting your Notification of Retirement, enclose a copy of your most recent check stub. This will help us determine your current rate of pay. Note, if you are making a purchase or are only eligible to retire if you make a service purchase, you will not receive an estimated retirement allowance sheet on which to select a payment that includes the service until the funds or a completed 401(k) transfer/rollover form is received.
Remember, when you select your initial payment it is based on an estimate of your monthly retirement allowance. Your monthly benefit may be adjusted if you purchase service credit at the time of retirement, have more or less sick leave than indicated on your form, receive more or less in salary than was used to estimate your benefit.
You cannot change your payment option or your beneficiary after the first retirement payment has been issued by the State Treasurer's office.
The Kentucky statute, KRS 61.645(9)(e) governing the Kentucky Retirement Systems provides that provisions in state statute that are in conflict with federal law will not be allowed. The following provisions have been changed by regulation to comply with federal law.
Federal law requires that a qualified pension plan may not pay a benefit to a member unless there has been a severance from employment. Generally, this means that an employee cannot retire and return to work with the same employer immediately after retiring. Retired reemployed provisions were amended by 105 KAR 1:230 to conform with the fedeal law.
In light of these provisions, there are some things you should consider before you accept other employment after retiring. The following is a summary of administrative regulation 105 KAR 1:230 providing an overview of how reemployment after retirement may affect members of the KERS, CERS, and SPRS.
Once you have retired, you can go to work for yourself or for a private company with no restrictions. You can draw your pension and earn as much as you can.
After you have retired, you can go to work for a public agency that participates in a different retirement system from the one paying your monthly benefit. There does not have to be a one-month break before taking the new job. For instance, you can retire from state employment, draw a benefit from KERS and immediately go to work for local government, which participates in CERS. You will receive your KERS pension and contribute to CERS as a new employee.
After being retired at least one calendar month, you may return to work in a different job with an agency participating in the same retirement system from which you are drawing a benefit, including the agency you retired from.
For instance, you could retire as an administrative assistant from state government and, after one calendar month, accept a maintenance position with Morehead State University which also participates in KERS. You would receive your pension and contribute to a second KERS account from your new position.
If you are Normal Retirement Age or older (age 65 for regular employees--age 55 for hazardous duty employees), you can retire and return to work in any position, including the same one you retired from, after being retired one calendar month. You will continue to receive your pension, and you will contribute to a second account if you are reemployed in a full-time position.
IMPORTANT: If you return to work with an employer participating in the same system from which you retired, you must notify the retirement office. If you return to work with the same employer from which you retired, you are required to submit copies of the job descriptions for your previous position and the position in which you have been reemployed.
If you quit your job and file the papers to retire the first of a month, you should not accept a full-time position that participates in the same retirement system any time in that first calendar month after your resignation. You must have a month-long break in service or your retirement will be voided. You will be treated as if you had never ceased to contribute.
If you are under Normal Retirement Age, you should not retire and return to employment with the same employer in the same position, or one with the same principal duties, for a period of six months. If you do, your pension will be stopped during your reemployment for a period not to exceed six months from your initial retirement date. You will contribute to a second retirement account from the position. It will not be combined with your previous account.
Note: All of state government, not just the specific cabinet or department you worked for previously, is considered "the same employer" for reemployment purposes. For CERS, each local government unit is a different employer.
For example, Joe (age 52) retires February 1, 1999, from his position as Personnel Director for the Department of Local Services and returns to his old position March 1, 1999. Joe will not receive his KERS pension from his first retirement account for the period from March 1999 (when he returned to his same job) through July 1999 (six months from his original retirement date).
If you return to work in any full-time position with an agency paricipating in CERS, KERS or SPRS, you will be required to contribute to the retirement system. Your new account will be separate from your previous account.
If you are a KERS or SPRS retiree reemployed in an interim or part-time position or a CERS retiree reemployed in a seasonal, part-time, temporary or emergency position, you will not have to contribute to the retirement system. EXCEPTIONS: Part-time positions that average 100 or more hours per month are considered FULL-TIME for retirement purposes, except for employees of school boards who are considered full-time if they average 80 hours per month. Some seasonal and temporary positions may also be treated as full-time if they last longer than permitted by statute.
If you work long enough to be "vested" for benefits, you will be entitled to a monthly benefit from your reemployment. For a nonahzardous employee to be eligible for a benefit at age 55, at least five years employment in the new position are required; four years service are required to draw a pension at age 65.
NOTE: You cannot purchase service credit in your second retirement account that you were eligible to purchase in your first retirement account, except for erroneously omitted contributions where the employer failed to properly report wages.
No, once the first retirement benefit was issued on your original retirement account, you cannot combine it with any other accounts. Your second account will stand on its own.
Receiving a pension from your retirement account while receiving a salary from employment would increase your total gross income. Be sure to consider the tax consequences. You cannot stop your pension once it has started.
If you are considering taking a position that is covered by KERS, CERS, SPRS or Kentucky Teachers' Retirement System, it might be to your advantage not to retire. If you do not retire, you can combine your accounts at a later date. If you do not retire, your highest years of salary will be used to determine the benefit from your service in all of these systems. By waiting, you might be entitled to a higher total retirement benefit when you decide to quit working once and for all.
Remember, too, that once you have retired, any enhancements made by the General Assembly to benefits for active members will not apply to your retired account, only to your account from your reemployment.
Before you retire with the intention of taking another job, be sure to check with the retirement office to see what impact it might have on your pension. Make sure you have considered all the angles before making a commitment.
For more information or answers, call the Kentucky Retirement Systems at (502) 564-4646 or write Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road, Frankfort, KY 40601.
To comply with the Age Discrimination in Employment Act, the disability provisions were amended by administrative regulation 105 KAR 1:205 as follows:
An employee is not eligible to apply for disability benefits if he is eligible for an unreduced benefit. An employee becomes vested for an unreduced benefit when at normal retirement age or when upon attaining a certain number of years of service credit. For nonhazardous members, an unreduced benefit occurs at age 65 or after 27 years of service. For members in hazardous duty positions, an unreduced benefit occurs at age 55 or after 20 years of ervice.
The service added for calculating the disability benefit, when combined with the employee's actual service, will not be more than the service the employee would have earned if he had worked until attaining an unreduced benefit. For nonhazardous employees with less than 25 years of service, service is added, not to exceed the employee's actual service, to the amount the employee would have attained at age 65 or 25 years total. For nonhazardous employees with 25 years, service is added to the amount the employee would have attained at age 65 or 27 years total. For hazardous employees service is added, not to exceed the employee's actual service, to the amount the employee would have attained at age 55 or 20 years total.
Federal law requires that a qualified pension plan may not pay a benefit to a member unless there has been a separation from service. Administrative regulation 105 KAR 1:170 was amended to clarify that a member may not receive a refund of his retirement account unless he has terminated employment. Layoff status does not constitute termination from employment.
Kentucky Public Employees' Deferred Compensation Authority received approval from the IRS, through a Private Letter Ruling request, to allow employees to transfer/rollover assets from their 401(k) accounts on a tax-deferred basis to purchase service credit in KERS, CERS and SPRS prior to retirement, termination of employment or attainment of age 59½.
This means the Deferred Compensation Authority can now transfer all or a portion of a 401(k) account for a member who is also an employee participating in KERS, CERS or SPRS and who is eligible to purchase service credit.
You must obtain a cost calculation sheet for the service you are purchasing. Once you have the cost for the service, you may obtain a Form 4170 from the Kentucky Retirement Systems or the Deferred Compensation Authority.
Should you have any questions regarding the transfer/rollover process, please contact the Deferred Compensation Authority in Frankfort at 502-573-7925 or toll free outside of Frankfort 1-800-542-2667. Office hours are Monday through Friday from 8:00 a.m. to 5:00 p.m.
You may contact the retirement office at 564-4646 in Franklin County or at 1-800-928-4646 if outside Franklin County.
Many of you have waited very patiently for your cost calculations for purchasing service credit or for estimates of retirement benefits for future years. We appreciate your patience.
Since July 1998, we have had over 3,000 employees retire. Nearly 900 retired in February alone. We expect even higher numbers retiring between June 1 and September 1.
Our benefits staff is busy seeing that these retiring employees will receive their benefits on time and be covered for medical insurance. That is our priority.
As of the end of March there were more than 5,500 outstanding requests for service purchases, but between July 1, 1998 and March we had produced more than 15,000 service purchase costs, and participating employees had paid more than $57 million to make service purchases.
We are sorry we cannot get work out faster right now. We will eventually supply your service purchase cost to you. The cost will be calculated at the cost when you requested it, and you will be given time to make the purchase at that rate.
If our counselors are busy, you may have to leave a voice mail message. Be sure to leave your name, telephone number (including area code) and Social Security number first, then a brief message. If you wait to leave your name and phone number until the end of your message, you may get cut off.
Last Updated: 7/10/2002