What do I do now???

2008 KCTCS Personnel System Retirement Guide

This is a common question asked by many people who are beginning/leaving work, wanting to know how to access funds, or retiring and moving on. This section will answer many questions employees have about accessing retirement money, separation questions, and the retirement process. We have also included a link to the Social Security Website for those people who might want to check on their future benefit information; it is http://www.ssa.gov/

What do I do with previous retirement assets?
An employee can a) leave money where it is with no penalties, b) roll the money over to another qualified plan (ex.-IRA), c) roll over to the new employer’s plan; if allowed, and continue contributions, d) can take distributions at regular tax bracket and a 10% penalty, e) maintain years of service if the employee has prior years in KTRS or KERS, or be paid out for their contributions.

How do I access my funds in a 403(b)?
Usually an employee may access their workplace plan funds with no tax penalties if they separate from employment during the year in which they turn 55.

How do I transfer money from one carrier to another carrier?
An employee needs to contact the carrier which will receive the amount of money. The receiving carrier will initiate all of the paperwork between the employee and the past carrier.

What constitutes as separation of service?
An employee is considered separated when they retire or terminate employment. ***Just opting-over to KCTCS from another personnel system does not constitute separation.***

How do I retire under each personnel system?
KERS- an employee must notify KERS and employer; Form 2020 needs to be filed by the employer; a refund of the employee’s contributions will be given back if the employee has less than five years of service.
KTRS- an employee has to fill out a retirement application from KTRS; the employer has to fill out Section VI; a refund of the employee’s contributions will be given back if the employee has less than five years of service.
403(b)- an employee must give the employer 3 months written notice before retirement; if the employee has separated he/she may:

1. Cash the contract out (*10% penalty if under age 55*)
2. Take one of the many distribution options by their chosen carrier(s).
3. Rollover the money to an IRA, or pay taxes and rollover the money to a Roth IRA.
4. The employee may choose not to take distributions at the beginning of retirement; therefore the money can be left in its place.

How do I find out my benefit from KTRS or KERS?

We have attached the links to each benefit calculator for KTRS and KERS employees.
KERS- http://www.kyret.com/BenefitsEstimator/EstimateForm.asp
KTRS- http://ktrs.ky.gov/01_active_members/index.htm

Legal Information

THE INFORMATION AND CONTENT PROVIDED ON THIS WEBSITE IS GENERAL IN NATURE AND FOR INFORMATIONAL PURPOSES ONLY. THE INFORMATION AND PRODUCTS MADE AVAILABLE TO YOU ARE NOT INTENDED TO BE AND SHOULD NOT BE CONSTRUED AS: i.) A RECOMMENDATION; ii.) LEGAL OR TAX ADVICE, or iii.) A LEGAL OPINION. KCTCS DOES NOT PROVIDE LEGAL OR TAX ADVICE. YOU SHOULD CONTACT YOUR LEGAL OR TAX ADVISOR REGARDING YOUR SPECIFIC TAX SITUATION PRIOR TO TAKING ANY ACTION BASED UPON THIS INFORMATION.