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Potential Changes to Retirement Service Credit Calculation FAQ
Frequently Asked Questions – Changes to Retirement Service Credit Calculation
KCERA is evaluating the possibility of making changes to how retirement service credit is calculated for full-time members. If the Board of Retirement directs KCERA to make the proposed changes, it would impact full-time members who take unpaid time off.
Currently, full-time members earn and pay for retirement service credit on a biweekly basis. Full-time members receive full service credit each biweekly if their pay covers their biweekly contribution amount. This allows full-time members to receive full service credit even when they take unpaid time off. Full-time members whose biweekly pay is not enough to cover their biweekly contribution pay no contribution and receive no service credit. This creates a mismatch with employer contributions, which are based on actual hours paid to their employees.
The proposed change would align full-time members with the calculation used for part-time members—service credit and contributions would be proportional to actual earnings. If approved, this adjustment would apply only on a go-forward basis and could affect future benefits if members have periods of reduced hours.
Under the current 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 proposed change would align contributions and service credit for full-time members with the same proportional method already used for part-time members.
If the proposal is adopted, service credit and contributions for full-time members would be based on actual earnings in each payroll period. This means that if you are paid for fewer than full-time hours, you would receive proportionally less service credit for that period but would pay proportionally less in contributions.
KCERA staff is recommending these changes 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 current process. This could:
- Lower your monthly retirement benefit
- Require you to work longer to reach the same benefit level
The KCERA Finance Committee will review the proposal on September 3, 2025. Any changes would require approval by the KCERA Board of Retirement. If approved, the effective date would be announced well in advance.
You can attend the Finance Committee meeting in person or via Zoom. Agenda materials, including participation details, will be posted on or before August 29 at www.kcera.org/board-meeting-agendas-minutes.
The KCERA Finance Committee will make a recommendation to the KCERA Board of Retirement, which will make the final decision.
Yes. KCERA will notify all members, labor groups, and plan sponsors if the Board approves the change, including the effective date and any implementation details.