Your KCERA membership is a valuable component of the compensation package provided by your employer. What makes it valuable is the fact that KCERA is a defined benefit (DB) plan. Here a few key facts about your membership and the financial benefits of participating in a defined benefit plan.
If you are appointed to a permanent position of at least 50% of the regular standard hours required, you will enter KCERA on the first day of the pay period following your date of hire. This is known as your “KCERA entry date” and will be used as a starting point for accruing retirement service credit, which increases with each biweekly that you are paid.
Membership Classifications and Types
In KCERA, you are classified as a safety member or a general member. Safety members are employed in active law enforcement, active fire suppression, probation, detention or criminal investigation. All other eligible employees are considered general members.
There are three types of members in KCERA. Active members currently work for one of KCERA’s plan sponsors. Deferred members have terminated employment and left their retirement contributions on deposit in KCERA. Retired members have retired for service or disability. There are more than 17,000 members in KCERA.
Defined Benefit Plan
As a defined benefit plan, KCERA provides its vested members with a lifetime retirement benefit (i.e., pension) based on their total years of retirement service credit, age at retirement and final average compensation. Generally, increasing any of these factors will increase your pension. A fourth calculation factor is benefit tier, which is assigned when you enter KCERA.
Some of the unique advantages of KCERA’s defined benefit plan include:
- Financial Security. Retired members receive a pension payment every month for the rest of their lives, and this amount may increase with time. When the retiree dies, an eligible beneficiary (e.g., spouse) can receive a lifetime continuance.
- Inflation Protection. An annual cost-of-living adjustment (COLA) is calculated based on the region’s consumer price index and applied to retirement benefits each April. KCERA’s COLA (up to 2.5%) helps protect retirees from rising inflation.
- Professional Management. KCERA’s pension funds are managed by professional investment managers, not individual plan participants.
- Survivorship Benefits. When a KCERA retiree dies, there are survivorship benefits available to eligible beneficiaries, including lifetime continuances and lump-sum payments.
- Disability Benefits. Members who have been permanently incapacitated from performing their normal job duties can apply for a disability retirement. If granted, the benefit is payable for life and subject to annual COLAs.