Retirement Board Approves 2.5% COLA for Retirees and Surviving Spouses
At the September 9 Retirement Board meeting the Board approved a 2.5% cost of living adjustment (COLA) to the base pension for all members whose retirement or whose deceased spouse’s eligibility to a pension were effective on or before December 31, 2020. The simple COLA, calculated using the member’s base pension, will be effective with the October 29 benefit payment for Police plan members and the November 1 benefit payment for Civilian Employees’ plan members.
2021 Retirement Board Election Results
Voting for the Retirement Board election ended on June 21, 2021 and (Ret.) Major Wayne Stewart was elected to the Board seat designated for a retired member of the Police Retirement System. The voting results were as follows: Wayne Stewart – 324, Tye Grant – 272, Frank Disciacca – 261, Josh Krasovec – 18. About 25% of the membership voted in the election.
At the May Retirement Board meeting Scott Hummel was reelected to the Board seat designated for a member of the Civilian Employees’ Retirement System and Det. Chad Pickens was reelected to the Board seat designated for a member of the Police Retirement System who has not attained the rank of Sergeant or higher. Mr. Hummel and Det. Pickens were the only candidates for their respective Board seats.
Congratulations to Mr. Hummel, Det. Pickens, and (Ret.) Major Stewart and thanks to all the Retirement System members who voted.
2021 Ad Hoc Cost of Living Adjustment
The Retirement Board did not approve an ad hoc cost of living adjustment (COLA) for retired members of the Police plan or Civilian Employees’ plan at the April 8th Board meeting. The funded ratio of 74% in the Police plan, from the April 30, 2020 actuarial valuation, did not meet the Retirement Board’s policy requirement of at least 75% funded to grant a COLA. The funded ratio of 78% in the Civilian Employees’ plan does meet the policy criteria for a COLA, however the Board also took into consideration that the actuarial return of 4.9% for FY 2020 was too far below the assumed rate of return of 7.4% to allow for a COLA.
The Retirement Board will review the results of the April 30, 2021 actuarial valuation in September to determine if the more recent fiscal year valuation data allows for reconsideration of a COLA in 2021.
KCPERS Tax Information
If you are receiving a benefit from KCPERS (the Police Retirement System of Kansas City, MO or the Civilian Employees’ Retirement System of the Police Department of Kansas City, MO), you are receiving a Public Pension.
Your pension payments from KCPERS are taxable at both the Federal and State level. You can change your elected tax withholdings at any time by submitting a new tax withholding form or the completed tax withholding section on your monthly statement to the KCPERS office.
Your IRS Form 1099R for filing your taxes will be mailed to you by Northern Trust. Northern is the company that processes the Police and Civilian Employees’ Retirement Systems monthly benefit payments.
Northern has advised us that 1099R’s for both retirement systems will be mailed to all retirees prior to January 31. While the Retirement System can request a duplicate form, Northern Trust charges the Retirement System for each duplicate 1099R we request. If you do not receive your 1099R by February 10, please contact the Retirement Office.
For those of you filing taxes in Missouri, below you will find additional information about Missouri’s Public Pension and Social Security Exemptions and Qualified Health Insurance Premiums. For those retired Police plan members who have their health insurance premium deducted from their monthly benefit check, below you will find a link to additional information about the IRS treatment of insurance premiums for retired public safety officers.
If you have any questions, please don’t hesitate to call the Retirement Office at 816 482-8138.
Missouri Public Pension Exemptions; Are you Eligible?
As the recipient of a public pension, you may qualify for the Missouri public pension exemption. This exemption allows you to exclude a portion of your pension and/or Social Security Income from your gross taxable income for your Missouri taxes. To qualify for the exemption, your adjusted gross income must fall within certain limits.
-Up to $85,000 for single taxpayers
-Up to $100,000 for married taxpayers
The exemption will be calculated as the amount of your taxable pension, limited to the maximum exemption amount for each taxpayer, and then reduced by the amount of your nontaxable social security benefit, if any. If you exceed the limitations listed above, you may still qualify for a partial exemption.
To see if you qualify for any or all of the exemption, you will need to file Form MO-1040 or MO-1040P. You will need to complete the worksheet in Part 3 of Form MO-A to file with your MO-1040.
KCPERS recommends that you contact the Missouri Department of Revenue or a qualified tax professional for information or questions regarding your eligibility to claim the public pension exemption.
Qualified Health Insurance Premiums
Missouri also allows a subtraction from federal adjusted gross income for qualified health insurance premiums. The subtraction is taken on line 12 of part 1 of Form MO-A. To determine if you qualify for a subtraction, the Missouri Department of Revenue supplies a worksheet for line 12 which can be found in the instructions to form MO-1040.
Military Leave of Absence Statutes and Retirement Board Policy
On August 28, 2015 the new military leave provisions for the Police Retirement System and Civilian Employees’ Retirement System will become law. In addition, the Military Leave Policy has been update to implement the changes in the statutes.
The changes in the statutes provide that a member may restore creditable service in the Retirement System for a military leave of absence by paying the amount of member contributions missed during that time. Members may also choose to not restore creditable service lost due to a period of military leave. A total of five years of military leave time can be purchased at the member contribution rate. A member may request a waiver to be granted creditable service in the Retirement System for the period of military leave time without having to pay the member contribution rate. The Retirement Board can waive the payment of member contributions for up to a total of three years (of the five years) of creditable service for military leaves of absence. A waiver can only be requested when the member provides orders under Title 10 or Title 32 and provides the appropriate copy of their DD-214 or NGB 23. The amount of creditable service that has previously been granted to a member by the Retirement System prior to August 28, 2015 will not change.
In anticipation of the changes to state statutes the Retirement Board also adopted changes to the Military Leave of Absence Policy. Attached you will find a copy of the amended policy. As you will see the Retirement System will continue to follow the provisions of USERRA as it relates to granting creditable service for military leaves of absence.
One of the biggest changes in the policy is that it will be your responsibility to contact the Retirement System to request a Military Leave of Absence worksheet upon your return from military service. The worksheet will show the dates of unpaid service in the Retirement System. Upon receipt of the worksheet members will need to complete an Application for Creditable Service due to Active Duty Military Service and provide the required documentation that corresponds with the current period of military leave. Members will designate on the application if they are planning to restore the service by making the member contributions or if they are requesting a waiver of the member contributions.
The worksheet, application form, and required documentation will be submitted to the Military Leave Review Committee (please see the attached policy for more information on the Committee) who will make a recommendation to the Retirement Board based on the application and documentation submitted by the member. If approval is recommended by the Military Leave Review Committee and granted by the Retirement Board, staff will notify the member of the amount of member contributions that are due, if any, and the date by which the contributions must be paid in full to grant the creditable service.
If you have any questions about the changes to the Military Leave statutes or policy, please do not hesitate to contact Sharon Blancett at 482-8830 or me at 482-8157. We are also available to meet with members to review the application form, required documentation, review process, and USSERA time limits for completing the application process.