The retirement benefits paid to KCERA members are funded from three sources: member contributions, employer contributions and investment earnings. Although member contributions have no impact on the calculation of your pension, they are an essential component of KCERA’s defined benefit plan. They are also critical to your membership: As long as your retirement contributions are on deposit, you remain a KCERA member.

Contributions are deducted from your biweekly pay on a pre-tax basis and are credited to your account each pay period. Depending on KCERA’s investment earnings, interest may be credited to your account semiannually. Your biweekly deductions will continue throughout your employment (unless you work for a special district that pays a portion of member contributions on behalf of its employees).

Contribution Rates

The amount of your retirement contributions is based on a percentage rate of your base pay plus any pensionable “special pays” permitted by law. Contribution rates* are assigned by membership classification, benefit tier, KCERA entry age and/or law, as follows:

• General members hired prior to 2013. Rates are determined by benefit tier and KCERA entry age.
• Safety members hired prior to 2013. Rates are determined by benefit tier and safety bargaining unit. Some safety rates are flat; others are based on KCERA entry age.
• “New members” who joined KCERA on or after January 1, 2013. Rates are 50% of the “normal cost rate,” which is calculated by KCERA’s actuary pursuant to PEPRA. 

Making Additional Contributions

You are not allowed to make additional contrubutions to KCERA to increase your retirement benefit, except for service purchases. Remember, your retirement contribution balance has no impact on the calculation of your pension. If you would like to save more money for retirement, please contact the Kern County Deferred Compensation Plan at (661) 868-3467.

Can I withdraw or borrow against my retirement contributions?

You may not borrow from, use as collateral or withdraw your contributions during your employment. KCERA can provide information about your account to lenders, upon request. Either you or your lender must provide KCERA with a release form signed by you before any confidential information will be released.

Withdrawing Contributions

If you terminate active or reciprocal employment, you may elect to withdraw the employee portion of your contributions. If you do so, your KCERA membership and your right to future benefits end. In addition, you may not borrow from or withdraw your contributions as an active or reciprocal member. Employer contributions are non-refundable. 

If I leave employment, can I withdraw my contribution balance?

Yes. Your retirement contributions and the interest earned on those contributions can be withdrawn if you leave employment without retiring or establishing reciprocity. However, you may not withdraw any contributions made by your employer. You may face tax penalties for withdrawing your contributions and interest if you do not reinvest your entire balance in a qualified retirement plan within 60 days of withdrawal. Currently, KCERA is required to withhold 20% for federal taxes and 2% for state taxes on all withdrawals. Further, you may incur an early withdrawal penalty if you do not reinvest the funds in a qualified retirement plan. You may avoid all taxes and penalties on your withdrawal by instructing KCERA to directly roll over your funds into another qualified plan. Please consult your tax advisor on the tax consequences of withdrawing contributions. Note: By withdrawing your contributions, you not only terminate your KCERA membership, you also forfeit all KCERA benefits previously entitled to you. Please carefully consider the consequences of withdrawing your retirement funds.

Do I have to withdraw my contributions if I leave employment?

No. You may choose to leave your contributions on deposit with KCERA. If you have at least five years of retirement service credit at the time you terminate employment with the County or a Special District, you may choose to leave your contributions on deposit with KCERA and elect a deferred retirement. Your contributions will earn interest, and you will be eligible to apply for retirement when you have met all age and service eligibility requirements. If you leave County or District service and within six months become a member of a reciprocal retirement system, you may leave your funds on deposit and elect a reciprocal retirement. There is no minimum service requirement to establish reciprocity. When you retire, all systems with which you have reciprocity will use your highest average salary at any of the systems to compute your retirement benefits. You must retire from all reciprocal systems on the same day. Finally, you may choose to leave your contributions on deposit, even if you are not eligible to elect a deferred or reciprocal retirement. Your contributions will continue to earn interest, and you may choose to withdraw your contributions and interest at any time, as long as you have not returned to work for a KCERA-covered employer (including an extra-help position) or a reciprocal agency.

 

(* If your employer is integrated with Social Security, your contribution rate is reduced by one-third on the first $161.00 of biweekly salary.)