03-P-008 Revision in the Statutory Definition of "Final Average Salary" for KPERS Contributions (Supersedes 01-P-008)
|DATE:||August 7, 2002|
|SUBJECT:||Revision in the Statutory Definition of "Final Average Salary" for KPERS Contributions|
|CONTACT:||Kathy Ogle||(785) firstname.lastname@example.org|
|SUMMARY:||Revision of Statutory Definition of "Final Average Salary" for KPERS Contributions|
Legislation effective May 23, 2002 revised the statutory definition of "final average salary" for KPERS calculations. Final average salary is either the higher of (a) the high four-year average including add-ons at termination or (b) the high three-year average without add-ons. Previously, the determination of which option to use was based on the member's hire date. New language enacted bases the determination on the member's KPERS membership date. Therefore, KPERS has advised Payroll Services that KPERS retirement contributions should not be withheld from the lump-sum termination payments for vacation leave, sick leave, compensatory time, and holiday compensatory time for employees whose membership date is on or after July 1, 1994.
The SHARP payroll system automatically generates the leave payout earnings codes subject to KPERS withholding (VLN, VLP, SLP, CTP and HTP) on the employees' time and leave records. The codes are correct if the employee's KPERS membership date is prior to July 1, 1994. However, agencies are asked to change the earnings codes on time and leave records for employees whose KPERS membership date is on or after July 1, 1994. The earnings codes that should be used are the five 'No KPERS' payout earnings codes: VLT, VLK, SLK, CTK and HTK. Failure to change the timesheets to reflect the proper payout earnings codes will result in the overwithholding of KPERS deductions and payroll adjustments will be required to correct. Please refer to Attachment A for information regarding the use of these earnings codes.