Your Retirement Benefit

As a KCERA retiree, you are entitled to a monthly retirement benefit (“pension”) for the rest of your life. If you are the surviving beneficiary of a KCERA retiree, you may be entitled to a continuance of that benefit for the rest of your life. These benefits represent a reliable foundation on which to build a financially secure retirement.

Direct Deposit

Whether you are a retiree or beneficiary, your benefit payment will be electronically deposited into your designated bank account on the last business day of the month. KCERA will also mail you a payment remittance advice every month that lists the credits, deductions and taxes withheld from your most recent payment.

If you are not currently using “direct deposit,” please complete and return the Change Request Form to set up this safe, convenient method of payment.

If you would like your payment remittance emailed to you each month, please complete and submit an Electronic Remittance Request Form to KCERA.

Tax Considerations

Your retirement benefit is subject to federal and state income taxes (unless the Board of Retirement granted you a tax-free, service-connected disability retirement). At your request, KCERA can withhold federal taxes from your monthly benefit. KCERA can also withhold state taxes for residents of California, but residents of other states are responsible for filing and paying their own state taxes. If you would like to change your tax withholdings, please complete and return the Change Request Form.

KCERA will report your annual retirement income using Form 1099-R, which will be mailed to you at the end of January. If you receive multiple Form 1099-R’s, please use them all to report your KCERA income in the prior calendar year.

Cost-of-Living Adjustment (COLA)

KCERA retirees and beneficiaries are eligible to receive up to a 2.5% cost-of-living adjustment with their April payment. The COLA granted each year is based on changes in the region’s average Consumer Price Index (CPI) from the prior year. The goal of the COLA is to protect retirees from rising inflation, which reduces the value of their pensions over time.

In years when the CPI is more than 2.5%, the full COLA is granted and any amount above 2.5% is deposited in the retiree’s “COLA bank.” A COLA bank collects “excess inflation” from year to year and applies it to retirees’ future COLAs.

Supplemental Benefits

KCERA is one of three counties in California that offers Supplemental Retiree Benefit Reserve (SRBR) benefits. These non-vested, supplemental benefits are funded by KCERA’s “excess” investment earnings and, except for the death benefit, help protect retirees’ pensions from rising inflation. KCERA’s SRBR benefits include:

  • Death Benefit. A one-time payment of $5,000 to a deceased retiree’s beneficiary, effective January 1, 2015.
  • 0.5% COLA. A monthly payment equal to 0.5% of a retiree’s benefit, excluding SRBR benefits. Each April, the 0.5% COLA is added to the employer-funded 2.0% COLA, resulting in a total annual COLA of up to 2.5%.
  • SRBR 1. A monthly payment of $35.50 to retirees who were hired before July 1, 1994.
  • SRBR 2. A monthly payment equal to $5.47 for each year of service by service by members who retired prior to 1981.
  • SRBR 3. An annually calculated payment that ensures a retiree’s basic monthly benefit maintains 80% “purchasing power.”
  • SRBR 4. A monthly payment of $21.00 to retirees who were hired before July 1, 2018.

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