Public Safety Retirement Plans
Public safety employees participate in several plans designed to provide them with a source of income during retirement. Participation in the Deferred Compensation Plan (457) is voluntary and is funded by payroll deduction; participation in other plans is mandatory.
Federal Insurance Contributions Act (FICA)
This federally required plan is administered through the Social Security Administration and requires all employees to contribute 7.65% of their gross salary; the city is required to contribute an additional 7.65% as an employer match. This plan provides retirement, survivor, disability and health insurance benefits.
Kansas Police and Firemen's Retirement System (KP&F)
(a defined benefit plan)
Participation is mandatory for public safety employees, who become members on their first day of employment and contribute 7% of their salary. Employees are vested after 15 years of credited service.
Retirement benefits are determined by a formula (final average salary x years of service x a factor of 2.5%). Members may retire with unreduced benefits at age 50 with 25 years of service, at age 55 with 20 years of service, or at age 60 with 15 years of service.
KP&F membership also provides disability and death benefits.
Deferred Compensation Plan (457)
This is a supplemental retirement plan. Participation is voluntary and there is no waiting period to begin contributing. Contributions (up to the lesser of $16,500 in 2011 or 100% of annual salary) are made on a pre-tax basis, thus reducing a participant's immediate taxable income.
Employees are 100% vested at all times, although monies are not available until retirement or termination except in cases of extreme financial hardship
There are no employer contributions to this plan.
Participants choose their own investment options from a choice of more than 60 mutual funds and similar investment products that are offered through two different deferred compensation providers:
Municipal Employees Pension Plan (MEPP) Tier 2
(a defined contribution plan)
Participation is automatic after 3 continuous years of full time employment.
The City contributes an amount equal to 4% of the employee's annual base salary. Vesting begins at 40% after 4 years of service (including the 3 year waiting period), increases by 10% per year, and continues up to 100% vesting after 10 years of service.
Employees may also contribute up to 10% of their salary on an after-tax basis.
In addition, if an employee contributes to the Deferred Compensation Plan, the City will make an additional annual contribution to the employee's MEPP account. This additional contribution will match 50% of the employee's contribution up to a maximum of 2%. For example, if the employee contributes 4% to the Deferred Compensation Plan, the City will contribute 2% to the employee's MEPP account.
Participants choose their own investment options from a variety of mutual funds.