employerwebinar 2016 - kpers · employer webinar 2016. active member death benefit. paid to the...
TRANSCRIPT
WebinarEmployer 2016
STATE #2
Employer Webinar 20163Discussion Topics
Discussion Topics
WelcomeMembership
DisabilityDeath Benefits
Optional Group Life Insurance (OGLI)Withdrawal
KPERS MembershipKPERS-covered Position Membership GroupsVestingKPERS 1, 2 & 3Employer ContributionsTotality of EmploymentDual Employment
Employer Webinar 20165Membership
KPERS Covered Position
• The position requires at least 1,000 hours per year.
• The position is covered by Social Security.
• Continuously or consistently employed.
• The position is not temporary.
• The position is not seasonal.
A part-time position is a covered position as long as the position meets the above requirements.
Employer Webinar 20166Membership
KPERS Membership Groups
Employer Webinar 20167Membership
Vesting
KPERS members vest with five years of service. A total of 18 quarters (4.5 years) rounds to five years.
Vested Members• Receive a lifetime monthly benefit.• Continue to accrue interest on account balance, even after leaving
employment.
Non-Vested Members who leave employment • Must withdraw after five years (unless employee is working in a non-
covered position with the same employer).• KPERS 2 members will lose their plan status if they return outside the
grace period (will return as a KPERS 3 member).
Employer Webinar 20168Membership
Grace Period/Membership
• 30 days from end date to return to another KPERS-covered position
• If returns after 30 days, enroll as KPERS 3 member
• Break in service: end date and new start date
Employer Webinar 20169Membership
Employee Contributions & Interest
• KPERS 1 and KPERS 2 employees contribute 6%.
• The employee’s contributions are pretax.
• KPERS 1 and KPERS 2 employees will be credited interest each June 30 for the balance in account on the previous Dec 31.o If membership is before July 1, 1993, the employee receives
8% interest. o If membership is July 1, 1993, or after, the employee receives
4% interest.
Employer Webinar 201610Membership
KPERS 3 “Cash Balance” Plan
• Defined benefit plan with some elements of a defined contribution plan.
• Tends to share risk between the employer and employee.
• “Contribution Account” and “Retirement Credits”o are kept separateo grow over time
Employer Webinar 201611Membership
KPERS 3 Contribution Accountand Interest
• Employee contributes 6%.
• Contributions deposited into the employee’s “Contribution Account.”
• 1% paid at the end of each quarter for balance in account at end of previous quarter (4% annually).
Example: $10,000 each quarter
Contribution Account
Account Balance (3/31/16) 600.00
Q2 Employee Contributions 600.00
Q2 Interest (1%) 6.00
Q2 Extra Interest -
Account Balance (6/30/16) 1,206.00
Employer Webinar 201612Membership
KPERS 3 Retirement Credits
How They Work
• Credits earned quarterly based on length of service.
• Represented as dollars instead of years of service.
• Build in value over time and only available at retirement.
• Not connected in any way to the employer contribution rate.
Employer Webinar 201613Membership
KPERS 3 Retirement Credits Grow
Based on compensation and years of service.
Less than 5 3%5 – 11 4%12 - 23 5%
24 or more 6%
Years of Service % of compensation
Employer Webinar 201614Membership
KPERS 3 Retirement Credits & Interest
1% interest paid at the end of each quarter for balance in account at end of previous quarter
Retirement Credits (available only at retirement)
Retirement Credit Value (3/31/16) 300.00
Q2 Service Credits 300.00
Q2 Interest (1%) 3.00
Q2 Extra Interest -
Retirement Credit Value (6/30/16) 603.00
Employer Webinar 201615Membership
Employer Contributions
• Not deposited into the member’s account
• Go into the KPERS trust fund to help pay for
o Disability benefitso Death benefitso Future retirement
benefits
Employer Webinar 201616Membership
Totality of Employment
• KPERS-covered position• Paid for working extra jobs with the same employer• Deduct KPERS contributions from all compensation
• Does not add additional years of service credit
EXAMPLE• Works in covered position for KS Dept of X.• Also works extra jobs for KS Dept of X.• Deduct contribution from all
compensation from KS Dept of X.
EXCEPTIONView what is subject to KPERS in the Employer Manual section of kpers.org, under “Helpful Resources.”
Employer Webinar 201617Membership
Dual Employment
• Employee works for two or more KPERS employers and all positions are KPERS-covered positions.
• Each employer enrolls the employee in KPERS, but the second employer enrolls the employee as a dual employee.
• Both employers remit employee and employer contributions.
• If the employee is purchasing service credit by payroll deduction, both employers will remit purchase of service deductions.
• Dual employment does not give the employee extra years of service but does increase reported salary.
Employer Webinar 201618Membership
Elected Official
• Must work either 1,000 hours or earn at least $5,000 per year.
• Must elect membership within 90 days of taking the oath of office.
o Elect within 14 days, membership is immediate.
o Elect within 15 to 90 days, membership starts at the beginning of the next quarter.
• If elected official is already a KPERS member and the position is a KPERS-covered position, he must contribute to KPERS with the elected position.
• The membership election is irrevocable.
Disability BenefitsDisability Benefit is…
Eligible Employees
Definition of Disability
When Benefits Begin
Reporting Leave of Absence
Completing KPERS-60
Rehabilitative Employment
Maximum Benefit Period
Continuing Benefits
Employer Workshop 201620Disability Benefits
KPERS Disability Benefit Is…
• 180-day waiting period.
• 60% of employee’s current annual rate of compensation.
• Minus workers’ compensation, Social Security or any employer provided disability benefit.
Employer Workshop 201621Disability Benefits
KPERS Disability Benefit Is…
• Minimum monthly benefit is $100.
• Maximum monthly benefit is $5,000.
• Confirmed each year to continue receiving benefits.
Employer Webinar 201622Disability Benefits
Eligible Employees
• Active KPERS members
• Active Board of Regents employees
• Eligible employees of the University of Kansas Hospital Authority
• Legislators
• State officers
• No disability coverage during military leave
Employer Webinar 201623Disability Benefits
Definition of Disability
• Be under the regular care of a physician • Begin while coverage in force • Meet the following definition of disability
Own Occupation• Disabled from own occupation for 24 months
Any Occupation• After benefits have been paid for 24 months, the employee
is unable to perform any occupation
Employer Webinar 201624Disability Benefits
When Benefits Begin
For approved claims, benefits will be the later of:
• The date the employee completes 180 continuous days of total disability.
• The date the employee ceases to draw compensation from his KPERS employer.
• If an employee attempts to return to work for up to 30 working days during the 180-day waiting period and again becomes disabled from the same cause, the waiting period will be extended by the number of days worked.
Employer Webinar 201625Disability Benefits
Reporting Leave of Absence
You should move your employee to a “leave of absence” if the employee is either:
• No longer earning at least 50% of full pay, based on his KPERS-covered position, which is:o Regular pay based on his KPERS-covered positiono Accumulated sick leave payo Accumulated vacation leave payo Any combination of above
• Off the payroll for at least 10 days
Employer Webinar 201626Disability Benefits
Reporting Leave of Absence
Go to the Employer Web Portal• Enter the employee’s end date using “Leave of Absence”
as the reason code.• Complete and send in the KPERS-60 (disability) form.• The employee may continue to receive workers’
compensation or small accumulated payments of sick and annual leave, but KPERS contributions should not be withheld.
• Employee cannot be actively at work.
Employer Webinar 201627Disability Benefits
Completing KPERS-60
Employer Webinar 201628Disability Benefits
Completing KPERS-60
Employer Webinar 201629Disability Benefits
Rehabilitative Employment
• Employee must participate in rehabilitative employment if it is determined that it may benefit him.
• Employee’s monthly benefit reduction:
Reduced By Time Period50% First 12 months
75% Second 12 months
• Rehabilitative employment can continue for up to 24 months.
Employer Webinar 201630Disability Benefits
Maximum Benefit Period
Before age 60Whichever comes first:(A) 65th birthday or(B) Retirement date
On or after age 60Shorter of:(A) Period of 5 years or(B) Period until retirement date
Disability Began Max Benefit Period
Employer Webinar 201631Disability Benefits
Continuing BenefitsWhile on Disability
• Employee continues to earn service credit.
• Employee continues to have Basic Life Insurance coverage in the amount of 150 percent of current annual rate.
• If participating in Optional Life Insurance, employee may continue at group rates by completing a KPERS 79-C form.
Death BenefitsBasic Life Insurance
Active-Member Death Benefits
On-the-Job Accidental Death Benefits
Accelerated Death Benefits
Employer Webinar 201633Death Benefits
Basic Group Life Insurance
Who Is Covered?• All active KPERS members
Coverage Amount• 150% of whichever is higher:
o Employee’s current annual rate of salary (Multiply the employee’s hourly rate of pay by the number of hours the position requires each year).
o Employee’s previous 12 months of pay
Complete the KPERS-61 Form (Employer’s Report of Death)
Employer Webinar 201634Death Benefits
Active Member Death Benefit
Paid to the employee’s beneficiaries:• Basic Group Life Insurance
• Optional Group Life Insurance
• Return of Contributions and Interest
Employer Webinar 201635Death Benefits
Active Member Death Benefit
Paid to the employee’s beneficiaries:
• Surviving Spouse Option (in lieu of return of contributions)o If the spouse is the sole primary beneficiary, o At time of death, employee must have 10+ years of service
(5+ years for KPERS 3) or be eligible for retirement o If member is not eligible for retirement at time of death, spouse
benefit will begin at the earliest time the employee would have been eligible: For normal or early (reduced benefit) retirement < KPERS 1 & 2 For normal (not reduced benefit) retirement < KPERS 3
Employer Webinar 201636Death Benefits
On-the-Job Death Benefits
Benefits are payable in this order• Employee’s spouse• If no spouse, to dependent children• If no children, to dependent parents
Benefit Amount• $50,000 lump-sum payment• 50% of employee’s final average salary, (paid monthly)
o Minus workers’ compensationo Minimum payment=$100o Benefit is in lieu of monthly surviving spouse benefit
Employer Webinar 201637Death Benefits
Accelerated Death Benefits
• Applies to both Basic Group Life Insurance and Optional Group Life Insurance.
• If employee is diagnosed as terminally ill with 24 months or less to live, then the employee can choose to accelerate all or part of the benefit.
• Any remaining coverage stays in effect as long as employee is an active member and continues paying premiums.
Optional Group Life Insurance (OGLI)What is it?
Affiliation
Employee Coverage
Spouse and Child Coverage
Family Status Change
Forms
Continuing Coverage (leaving KPERS-covered employment)
Employer Webinar 201639OGLI
What is it?
Optional Group Life Insurance (OGLI) is additional coverage beyond Basic Life Insurance.
• Coverage for employee, spouse, child
• Employee decides how much
• Employee pays for cost through payroll deduction
Employer Webinar 201641OGLI
For New Employees Now
Employee Up to $25,000in $5,000 increments
Up to $300,000in $5,000 increments
Spouse $10,000 or $25,000 $50,000 or $100,000
Child* $10,000 or $20,000 n/a
InsuredGuaranteed Coverage(without proof of good health)
Anytime Coverage(proof of good health)
*One premium covers all dependent children in family
• Cancel or reduce coverage anytime.• Start or increase coverage during open enrollment (October).• Retirees are not eligible for employee coverage.
Employer Webinar 201642OGLI
For New Employees Jan 2017
Employee Up to $50,000in $5,000 increments
Up to $400,000in $5,000 increments
Spouse Up to $25,000 in $5,000 increments
Up to $100,000in $5,000 increments
Child* $10,000 or $20,000 n/a
InsuredGuaranteed Coverage(without proof of good health)
Anytime Coverage(proof of good health)
*One premium covers all dependent children in family
• Cancel or reduce coverage anytime.• Start or increase coverage during open enrollment (September).• Retirees are not eligible for employee coverage.
Employer Webinar 201643OGLI
Spouse & Child Coverage
• Employee does not have to be enrolled in OGLI to have spouse coverage.
• Premiums are payroll deducted.
• Employee is the beneficiary of spouse coverage.
• Cannot be insured as both a KPERS-covered employee and a spouse of a KPERS-covered employee.
Employer Webinar 201645OGLI
Family Status Change
May increase coverage within 31 days of a family status change:
• Marriage or Divorce• Change of marital status• Birth of child• Adoption of child
An employee may enroll or increase coverage by $50,000 without proof
of good health.
An employee may enroll or increase
spouse coverage for $10,000 or $25,000.
Within 31 days of marriage, an employee may elect
$10,000 or $25,000 of spouse coverage without proof of
good health.
Employer Webinar 201646OGLI
Conversion Option
When leaving KPERS-covered employment, the employee may convertthe basic and/or optional life insurance coverage.
• Term insurance will convert to a whole life policy• Individual rates are higher than group rates• Builds cash value• Offers level premiums• Pays the face amount of insurance at time of death• Can convert up to full amount without proof of good health• Conversion must take place within 60 days of last day on employer’s
payroll
Employer Webinar 201647OGLI
Portability Option
When leaving KPERS-covered employment, the employee may port his basic and/or optional insurance coverage.
• A term insurance option to continue coverage when leaving employment or retirement.
• At employee’s cost, but no proof of good health.• Premiums increase as you get older.• Must be under age 80 and actively at work the day before leaving
employment (cannot be off work due to sickness or injury).• Coverage reduces to 65% at age 65, all coverage terminates at age 80.• Portability must take place within 60 days of last day on the employer’s
payroll.
Employer Webinar 201648OGLI
Continuing Spouse Coverage
• Spouse coverage can only be ported if the employee also ports his own insurance.
• Spouse coverage may be converted to a whole life policy regardless of whether the employee converts his own insurance.
• Child coverage does not continue.
Applying to WithdrawVested Employee KPERS 1 & 2
Non-Vested Employee KPERS 1 & 2
KPERS 3
Withdrawing Contributions
Continuing Insurance
Employer Webinar 201650Withdrawal
Vested Employee KPERS 1 & 2
• Vested with five years of service credit.
• If vested, the member is guaranteed a lifetime monthly retirement benefit if he leaves his contributions and interest in his account.
• The vested benefit is often more valuable than the amount of actual contributions.
• Member can apply for retirement benefits when eligible.
• Account will continue to earn interest.
• Member can withdraw at any time if he changes his mind.
Employer Webinar 201651Withdrawal
Non-Vested Employee KPERS 1 & 2
• Not guaranteed a retirement benefit.
• May leave contributions and interest with the Retirement System for five years from last day on payroll.
• Account will continue to accrue interest for five years.
• After five years, member forfeits his service.
• If member returns to KPERS-covered employment outside the grace period, he will be a KPERS 3 member.
Employer Webinar 201652Withdrawal
KPERS 3
Vested • The vesting requirement is five years (4.50 rounds to 5).• Withdrawn member will continue to accrue interest until eligible to retire.• When eligible to retire, member can receive a benefit based on his
contribution account and retirement credits.
Non-Vested• Member forfeits his retirement credits.• If member has not withdrawn his contribution account and returns to
KPERS-covered employment within five years, his retirement credits will be restored.
• Interest is paid for two plan years only.
Employer Webinar 201653Withdrawal
Withdrawing ContributionsKPERS 1, 2 & 3
• A member can apply to withdraw his contributions 31 days after employment ends.o Must complete and submit KPERS-13 (App for Withdrawal) to
KPERSo Approximately 4 weeks to process a KPERS-13
• If a member withdraws, he gives up all Retirement System rights, benefits and service.
• KPERS will send 1099 tax form to member the following January for income tax return.
Employer Webinar 201654Withdrawal
Sometimes Employee Can’t Withdraw
• If a non-vested member moves from a covered position to a non-covered position (same employer). The IRS does not consider this a “distributable event.”o Contributions continue to earn interest while the member is in
the non-covered position at your employer.
• If a member goes on a leave of absence.
• If a member goes on military leave.
• If there’s a legal dispute with employer.
Employer Webinar 201655Withdrawal
Options for Withdrawing
Roll over contributions into an eligible retirement plan, deferring taxes until later
• 457(b) deferred compensation plan• 403(b) taxed deferred annuity• 401(k) plan• Traditional IRA
Have contributions and interest paid directly
• KPERS will withhold 20% for federal income tax• The IRS may assess an additional 10% penalty for withdrawing if the
employee is under the age of 59 ½
Employer Webinar 201656Withdrawal
Continuation of Insurance
Can choose to keep basic and/or optional life insurance and:
• Convert life insurance into an individual whole-life policy, or
• Port life insurance into a term life policy
Secure UploadMethod to Send Documentsto KPERS
Example
Employer Webinar 201658Secure Upload
Method to Send Documents
KPERS can no longer accept scanned forms and documents through regular email.
• KPERS Secure Upload is a method for submitting forms and documents electronically.
• Upload up to five forms/documents at once.
• A confirmation is sent within one business day.
Employer Webinar 201659Secure Upload
How to Send to KPERS
Call KPERS at 1-888-275-5737to get set up
Employer Webinar 201660
KPERS Contact Information
Reporting & OGLI Everything Else
Email: [email protected] Email: [email protected]
Toll-free: 1-866-980-0955 Toll-free: 1-888-275-5737
Topeka: 1-785-296-5278 Topeka: 1-785-296-6166
Employer Webinar 201661
Presentations for Employers and Members
• Basic Presentation• KPERS 3 Plan (new employees)• Pre-Retirement• Designated Agent Training• School In-Service• Benefit Fairs
Employer Webinar 201662
Educational Representatives
Dianna BerryTopeka Office
Alan SchulerEastern Kansas
Mel AbbottCentral Kansas
Ardith DunnWestern Kansas
Andrea DavenportTopeka Office
Cathy RaffertyTopeka Office
Becky LinquistTopeka Office
EmployersThanks for all you do for KPERS members.