Kansas KPERS 2

This page documents how FinZot models the Kansas KPERS 2 defined benefit pension plan.

Who this plan covers: General and education members of Kansas Public Employees Retirement System, on or after July 1, 2009 and before January 1, 2015: first employed in a KPERS-covered position (state, school and local groups).

Employee Contributions

Employee contributions are the portion of salary that the employee pays into the pension fund.

Field	Value
Contribution Rate	6% of salary
Tax Treatment	Pre-tax (reduces taxable income)

Vesting & Retirement Eligibility

Vesting

Vesting determines when an employee has earned the right to receive pension benefits. The following formula must evaluate to TRUE for the employee to be vested:

ROUND(service_credits) >= 5

Retirement Eligibility

Retirement eligibility determines when an employee can begin receiving pension payouts. The following formula must evaluate to TRUE:

OR(AND(commencement_age >= 65, ROUND(service_credits) >= 5), AND(commencement_age >= 55, ROUND(service_credits) >= 10))

Formula Variables:

• service_credits: Years of credited service
• commencement_age: Age when pension payments commence

Benefit Calculation

The annual pension benefit is calculated as:

Annual Benefit = Final Compensation × Benefit Factor × Service Credits

Final Compensation

Final compensation is the salary figure used in the benefit calculation, typically an average of the employee’s highest-earning years.

Field	Value
Method	Highest Any Years
Years Averaged	5

Benefit Factor

The benefit factor is a percentage multiplier that typically varies based on retirement age. Higher ages generally yield higher factors.

0.0185 *(CASE
  WHEN OR(AND(commencement_age >= 65, ROUND(service_credits) >= 5), AND(commencement_age >= 60, ROUND(service_credits) >= 30)) THEN 1.0
  WHEN AND(commencement_age >= 55, ROUND(service_credits) >= 10) THEN(IF(ROUND(service_credits) >= 30, 0.5, 0.0) + IF(ROUND(service_credits) >= 30, 0.5, 1.0) *(CASE
  WHEN commencement_age >= 60 THEN 0.65 ^((780 -(commencement_age_months - IF(birth_day_of_month = 1, 0, 1))) / 60)
  ELSE 0.65 *(0.425 / 0.65) ^((720 -(commencement_age_months - IF(birth_day_of_month = 1, 0, 1))) / 60)
END))
  ELSE 0.0
END)

Formula Variables:

• commencement_age: Age when pension payments commence
• service_credits: Years of credited service

Cost-of-Living Adjustment (COLA)

The COLA formula determines how pension benefits grow over time after retirement to keep pace with inflation.

current_pension_benefit

Formula Variables:

• initial_pension_benefit: The annual benefit amount at retirement
• years_since_retirement: Number of years since retirement began

Tax Treatment

Pension payouts from this plan are taxable as ordinary income.

Social Security Coverage

Kansas KPERS 2 members generally pay into Social Security alongside the pension, so a job with this plan is treated as covered and earns Social Security credits normally.

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Note: FinZot’s pension estimates are for planning purposes only and may not reflect all plan provisions. For official benefit estimates, contact your plan administrator.