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Changes to Retirement Service Credit Calculation FAQ
Frequently Asked Questions – Changes to Retirement Service Credit Calculation
KCERA's Board of Retirement has directed KCERA to change to how retirement service credit is calculated for full-time members. This change will be effective July 1, 2026, and will impact full-time members who take unpaid time off.
Previously, full-time members earned and paid for retirement service credit on a biweekly basis. Full-time members received full service credit each biweekly if their pay covered their biweekly contribution amount. This allowed full-time members to receive full service credit even when they took unpaid time off. Full-time members whose biweekly pay was not enough to cover their biweekly contribution paid no contribution and received no service credit. This created a mismatch with employer contributions, which were based on actual hours paid to their employees.
The change aligns full-time members with the calculation used for part-time members—service credit and contributions that are proportional to actual earnings. This adjustment will be applied only on a go-forward basis only and could affect future benefits if members have periods of reduced hours.
Under the previous process, full-time members receive full retirement service credit even if they work and are paid for fewer than their scheduled full-time hours during a payroll period. Employers already pay retirement contributions based on actual hours worked, which creates a mismatch between employee and employer contributions. The change would align contributions and service credit for full-time members with the same proportional method already used for part-time members.
Service credit and contributions for full-time members is now based on actual earnings in each payroll period. This means that if you are paid for fewer than full-time hours, you will receive proportionally less service credit for that period but will pay proportionally less in contributions.
These changes are on a go-forward basis only.
You may be affected if:
- You take unpaid time off during a payroll period
- Your pay in a payroll period is less than full-time pay
- You regularly work fewer than your scheduled full-time hours
Members who work and are paid for full-time hours in each payroll period would not see a change in their service credit.
If you have payroll periods with less than full service credit, your total years of service at retirement may be lower than under the previous process. This could:
- Lower your monthly retirement benefit
- Require you to work longer to reach the same benefit level
On September 3, 2025, the KCERA Finance Committee reviewed a proposal to change how retirement service credit is calculated. The Committee voted to move the proposal forward, and it was reviewed and approved by the KCERA Board of Retirement on Wednesday, October 8, 2025. The change will go in effect July 1, 2026