When do I become a member of the Retirement System?
You become a member of the Police Retirement System on your first day as a sworn Police Officer of the Kansas City, Missouri Police Department. All law enforcement members in active service for compensation become members of the Police Retirement System as a condition of employment. Police Officer Candidates and civilian employees of the Police Department are not eligible to participate in the Police Retirement System.
Why are member contributions to the Police Retirement System deducted from my pay check?
Contributions to the retirement system are mandatory for all members in active service and are a percentage of base pay. Member and employer contributions, along with investment earnings, are used to pay current and future benefits to members. Your member contribution rate is set by the Retirement Board and is currently 10.55% of base pay and the employer contribution rate is currently 19.7% of base pay.
When am I vested in the Police Retirement System?
You are vested in the retirement system when you complete 15 years of creditable service or are in active service at age 60 with at least 10 years of creditable service. A Tier I vested member is entitled to a retirement benefit at some future date either through a normal service retirement or at age 55 if employment with the Police Department is terminated and the member contributions remain in the retirement fund.
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When am I eligible to retire?
Normal retirement for members of the Police Retirement System is upon completing 32 years of creditable service. Tier I members are first eligible to retire upon completing 25 years of creditable service. Any Tier I member in active service who reaches age 60 with 10 years of creditable service may retire. Any Tier I member who terminates employment with 15 or more years of creditable service and does not withdraw their member contributions becomes entitled to a reduced retirement benefit beginning at age 55. Tier II members are first eligible to retire upon completing 27 years of creditable service. Any Tier II member in active service who reaches age 60 with 15 years of creditable service may retire. Any Tier II member who terminates employment with 15 or more years of creditable service and does not withdraw their member contributions becomes entitled to a reduced retirement benefit beginning at age 60.
How do I start the retirement process?
We recommend that you call the retirement office about two months prior to your planned retirement date and schedule an appointment with our Benefits Specialist to select the best retirement date for your situation. Once you have decided on a date, you should contact the Personnel Records Section to begin the actual retirement process. The retirement sign out process will be reviewed and you will be given a Clearance Sheet to have signed at each stop along the way. The retirement office will be one of several stops in the sign out process.
Please call and make an appointment to sign out, otherwise we will have to prepare your retirement forms while you wait. You will need to bring a voided check or bank deposit slip as all benefit payments are made by direct deposit. If you are married, please bring a copy of your marriage license and your spouse's Social Security card. You should plan on spending a minimum of 45 minutes in the KCPERS' office going through the sign out process, completing paperwork and learning more about your retirement benefits. You are welcome to bring your spouse or beneficiary to the appointment.
If you are considering a Partial Lump-sum Option Payment (PLOP), the application should be made 90 days prior to your retirement date and you will need to notify us that you have decided to take the PLOP 30 days prior to your retirement date.
If you participate in deferred comp you will need to meet with the Deferred Comp Coordinator the month before your retirement date.
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How is my retirement benefit calculated?
The retirement benefit formula is 2.5% of your final average salary multiplied by your years of creditable service. Your final average salary is the average of the highest, usually the last, 24 months of base pay. An easy way to look at the formula is for every year of service you earn 2.5% of your final average salary. So with 32 years of service you would receive 80% of your final average salary. With a final average salary of $63,500, the retirement benefit calculation would be as follows:
32 Years of Service x 2.5% = 80%
$63,500 x 75% = an annual retirement benefit of $50,800
For a member retiring with 25 years of service and the same final average salary the retirement benefit calculation would be as follows:
25 Years of Service x 2.5% = 62.5%
$63,500 x 62.5% = an annual retirement benefit of $39,688
Will I receive cost of living increases after I retire?
Members, including surviving spouses, may receive an annual cost of living adjustment in an amount not to exceed 3% of their respective base retirement benefit. Statutes require that the Retirement System remain actuarially sound and that the Retirement Board must act upon the advice of a qualified actuary when granting cost of living adjustments. To be eligible for the cost of living adjustment your retirement must have started by December 31 of the prior year. Since the cost of living adjustment is calculated on the base benefit for each member, the maximum annual cost of living adjustment can be calculated at the time of retirement or when a surviving spouse begins receiving benefits. The cost of living adjustments are not compounded and are not prorated.
The following is an example of how a member's retirement benefit increases with cost of living adjustments:
Base retirement benefit: $47,625
Maximum annual cost of living adjustment: $47,625 x 3% = $1,429
In the first year, if a full 3% cost of living adjustment is granted, the member's annual retirement benefit would be: $47,625 + $1,429 = $49,054
In the second year, if a full 3% cost of living adjustment is granted, the member's annual retirement benefit would be: $49,054 + $1,429 = $50,483
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Who is an eligible surviving spouse and how are their benefits calculated?
An eligible surviving spouse is married to the member at the time of retirement and at the time of the member's death. A surviving child may be eligible for spousal benefits in the event there is no eligible surviving spouse.
If an active member dies while in service, the surviving spouse benefit is 40% of the member's final average salary.
If a member retires or terminates service after August 1999 and dies after retirement, the surviving spouse benefit is 80% of the member's benefit at the time of death.
If a member retired or terminated service on or before August 1999 and dies after August 1999 the surviving spouse benefit is 40% of the member's final average salary. However the surviving spouse can be appointed by the Retirement Board as a consultant and receive benefits equal to 80% of the member's benefit at the time of death.
If a member retired prior to August 1997, an eligible surviving spouse must have been married to the member at least two years prior to retirement.
After August 2000, surviving spouses are eligible to remarry without any loss of benefits.
What is the supplemental retirement benefit?
All retired members and eligible surviving spouses that receive a monthly retirement benefit are also entitled to receive the supplemental retirement benefit, which is currently $420 per month. The supplemental retirement benefit started in 1991 at $50 per month to help offset the rising cost of health insurance premiums. It has increased through cost of living adjustments to the current amount. The supplemental retirement benefit is not restricted to paying for health insurance premiums.
When will I receive my first retirement benefit check?
It depends on when you retire. Normally your first day of retirement is the day after your last day on payroll at the Police Department. If that date is early in the month and close enough to the end of a pay period you may receive your first retirement check at the end of the month in which you retire.
In most cases because we have to wait for the payroll period to end before we can determine your final benefit calculation, your first retirement benefit payment will not be made until the end of the next month following your retirement date. However that benefit payment is usually larger than a normal benefit payment because you started earning your benefit in the month you retire. For example, if your first day of retirement is September 19 you will receive a benefit payment at the end of October for 12 days of September and all of October.
So back to the original question.retirement benefits from the Police Retirement System are paid on the last business day of the month via direct deposit to your bank. A monthly confirmation statement from Northern Trust, our custodial bank, is mailed to your home.
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What is the retirement system's role in providing retiree health insurance?
As a convenience to our members the retirement system will deduct your health insurance premium from your monthly retirement benefit and send it to the Police Department. The department then pays the monthly Blue Cross/Blue Shield bill for both active and retired members.
Access to retiree health insurance is provided by the Police Department and not by the Police Retirement System. The department contracts with Blue Cross/Blue Shield for health insurance for both active and retired members, and is responsible for negotiating the policy benefits, co-pays, deductibles, and monthly premiums.
Open enrollment for making changes to your retiree health insurance is coordinated by the department's Benefits Section and usually takes place from mid March to mid April. New health insurance premiums take effect on May 1, at the start of the fiscal year, and are deducted for the first time from your end of May retirement benefit payment.
If you are over 65 and participating in the Medicare Supplemental Plan and Medicare Part D the open enrollment period, through the Benefits Section, is generally from mid November to mid December. The new Medicare premiums take effect on January 1 and are deducted for the first time from your end of January retirement benefit payment.
What is a PLOP?
The Partial Lump-sum Option Payment (PLOP) is an alternative way to receive your lifetime retirement benefit. Members who retire with 26 or more years of creditable service may elect to take part of their retirement benefit in a lump sum at the time of retirement and then receive a reduced monthly retirement benefit going forward.
In the Police Retirement System a member with 26 years of service can elect a lump sum equal to 12 times their base monthly retirement benefit. A member with 27 years of service can elect a lump sum equal to 12 or 24 times their base monthly retirement benefit and a member with 28 or more years of service can elect a lump sum equal to 12, 24, or 36 times their base monthly retirement benefit. When a member elects to take a PLOP their monthly benefit is reduced on an actuarial basis. The new reduced base benefit is used to determine future cost of living increases and surviving spouse benefits. The actuarial reduction depends on the age of the member at retirement, the amount of the lump sum PLOP and if there is an eligible surviving spouse.
A portion of the PLOP distribution is nontaxable and can be paid directly to you. The taxable portion of a PLOP distribution is subject to mandatory 20% federal withholding and may be subject to an additional 10% federal tax penalty for early distribution from a retirement plan. You may defer paying taxes, and possibly eliminate the additional 10% tax penalty, by rolling the taxable portion into an IRA or other qualified retirement plan like the department's ING Deferred Compensation plan.
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If I leave the Police Department can I get a refund of my contributions to the Police Retirement System?
Upon termination of employment with the department you will be entitled to a refund of your member contributions to the Police Retirement System. If you are vested with 15 years of creditable service you may choose to leave your contributions in the retirement system and be eligible for retirement benefits starting at age 55.
If you are not vested in the retirement system you will receive a refund of your member contributions. As part of the sign out process we will review the amount of pre-tax and after-tax contributions you have made. Your after-tax contributions, those made prior to September 2003, can be refunded directly to you and are not subject to taxation. Taxable funds paid directly to you are subject to mandatory 20% federal withholding and may be subject to an additional 10% federal tax penalty for early distribution from a retirement plan. You can defer paying taxes, and possibly eliminate the additional 10% tax penalty, by rolling the taxable portion into an IRA or other qualified retirement plan like the department's ING Deferred Compensation plan.
When I get a refund, why don't I get any of the employer contributions made on my behalf?
The City and Police Department make employer contributions to KCPERS based on total salary for the pay period, not for specific individual members. The Police Retirement System, being a defined benefit plan, does not credit employer contributions to individual member accounts. Benefits are paid from the investment trust that includes contributions from the employees and employer and investment earnings on those contributions. A defined benefit plan requires all members to contribute the same percentage of pay and guarantees a specific benefit at retirement. A defined contribution plan would keep separate accounts for all contributions because the member can determine how much they want to contribute, within certain limits, the employer can determine how much they want to contribute and at retirement there is no guarantee of a specific benefit.
I am going through a divorce, why are the attorneys asking about my retirement benefits?
Retirement plans are treated as any other property or investment acquired during the marriage and when assets are divided between two people the court wants to look at all the assets of the marriage.
Attorneys will frequently call the retirement system office asking for information about the Police Retirement System benefits, the benefits for a specific member and the amount of their member contributions. We will not provide specific member information without a release of information to the Police Retirement System of Kansas City, Missouri that has been signed by our member.
If the court decides to divide your retirement benefit as part of a divorce decree, a Qualified Domestic Relations Order (QDRO) agreed to by you and your former spouse will be sent by the court to the Police Retirement System. A QDRO is an order from the court to divide your retirement benefit at the time of your retirement or upon termination of employment. Typically the QDRO will specify either a fixed dollar amount or a percentage of the retirement benefit payment will be paid to an ex-spouse and the remainder of the benefit to the member.
In an effort to ensure that we correctly administer each QDRO the retirement system has prepared a standard QDRO form that can be mailed or e-mailed to your attorney.
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How can I purchase creditable service?
In order to purchase creditable service you must have qualifying service that is eligible for purchase. Types of qualifying service that may be eligible include prior membership service in the Police Retirement System, other public employment in the state of Missouri including time spent as a civilian employee of the Police Department and time spent in the Police Academy, prior military service, and interruptions in service due to a period of unpaid leave.
If you were previously a member of the Police Retirement System and terminated employment with five or more years of creditable service, you are eligible to restore your prior service. You must repay the amount of member contributions that were refunded to you plus an additional payment of interest equal to the amount of the actual net yield earned by the fund during the time the contributions were withdrawn.
If you have been employed in nonfederal public employment within the state of Missouri prior to becoming a member of the Police Retirement System, you may be eligible to purchase creditable service up to the actual amount of time spent in other public service. Qualifying service can be either time spent that was not covered by a retirement plan or, if covered by a retirement plan, you cannot be entitled to any future benefit for that period of service. You must provide verification of service and benefit status from your previous employer. The cost under this option is calculated using factors provided by the retirement system actuaries based on your age, years of creditable service, and salary at the time of the purchase. This is the most expensive method of purchasing creditable service and is the method used by members to purchase periods of civilian employment including time spent in the Police Academy. You must have five years of creditable service in the Police Retirement System to be eligible under this option.
If you served in the U.S. military on active duty prior to becoming a member of the Police Retirement System, you may purchase up to two years of creditable service based on military service. You must provide us with appropriate documentation of your qualifying military service and the cost is calculated using actuarial factors as described above.
You can purchase service for a leave of absence of over 30 days by paying an amount equal to the amount of member contributions missed during the period of unpaid leave. The payment must be made within one year of returning from the unpaid leave and is calculated using the member contribution rate and salary in place immediately prior to the leave period.
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What about a military leave of absence?
We will always follow the provisions of federal USSERA laws when it comes to unpaid leave for active duty military service for our members. In addition to the federal law, the retirement system has provisions for providing creditable service for a military leave of absence under certain circumstances at no cost to the member. When you go on a period of unpaid leave for active military duty we'll need a copy of your orders. When you return from a military leave of absence we'll need the Member - 4 copy of your DD Form 214 which shows the dates of your active duty service and discharge status.
What happens if I get injured and cannot work?
In addition to providing retirement benefits, the retirement system also pays benefits to members who become disabled and, following rehabilitation, cannot perform the full and unrestricted duties of a police officer. Duty disability retirement benefits are paid to those members who become permanently unable to perform the full and unrestricted duties of a police officer as the natural, proximate, and exclusive result of an accident occurring within the actual performance of duty at some definite time or place.
We also provide non-duty disability benefits to those members with 10 or more years of service who are permanently unable to perform the full and unrestricted duties of a police officer as the result of an injury or illness not exclusively caused by the actual performance of official duties or by their own negligence.
Members with disabling injuries or illnesses are referred to the retirement system after the Police Department has determined that the member, following a full rehabilitation process, cannot perform the duties of a police officer. The Police Department sends medical information about the member's condition to the retirement system along with an evaluation from the department doctor. This will be the first time the retirement system will know the member has a disabling injury or illness and we have a separate evaluation process that includes a Medical Board independent of the department's evaluation process. You will be asked to authorize the release of all your medical records to the retirement system Medical Board. A doctor from the Medical Board will review your records and examine you to complete the medical evaluation for the retirement system.
The findings of the Medical Board of the Retirement System are then sent to the Board of Police Commissioners who makes the decision to retire members of the Police Retirement System on either a duty or non-duty disability.
Once the department has sent your file to the retirement system for a disability evaluation it can take two to three months, or more, to get medical records from your doctors, have your medical records reviewed by the Medical Board of the Retirement System, set and complete your appointment with the Medical Board doctor, have the Medical Board doctor complete the written evaluation, and then have the Board of Police Commissioners meet and reach a decision.
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Where do I find the Missouri State Statutes or Summary Plan Description for the Police Retirement System?
You can find both the Missouri State Statutes and the Summary Plan Description on the KCPERS website. The state statutes that govern the Police Retirement System can be found in Sections 86.900 to 86.1280 of the Revised Statutes of Missouri. The summary plan description provides a short explanation of plan benefits in a more readable format than the statutes. The Summary Plan Description covers Membership, Creditable Service, Contributions, Retirement Benefits, Death Benefits, and the Retirement Board.
How can I get more information about the Police Retirement System?
You can always call or stop by the KCPERS office. Our phone number is 816 482-8138 or the toll free number outside Kansas City is 888 813-8138. Our office is in the Multipurpose Building on the South Patrol Division Campus at 9701 Marion Park Drive. Our website kcpers.org has information on benefits, Retirement Board meetings, retirement system news, and education.
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