Voluntary Separation Incentive Program (VSIP) Retirement Benefits Information
Provided below is general information about retirement benefits for the Voluntary Separation Incentive Program for Retirement (VSIP) at the University of Kansas for eligible faculty and staff. If you have questions, please contact KU Benefits by email at email@example.com or by phone at 785-864-7402.
For those who participate in the VSIP, this fall the Benefits Office will provide an individualized retirement memo to ensure that the information provided is the most up-to-date available. That memo will contain information about the retiree health insurance options, estimated sick and/or vacation leave payout, information for enrolling in Medicare, etc.
Mandatory Retirement Plan – Kansas Board of Regents 403(b) Plan Participants
Participants in TIAA and/or Voya retirement plans should contact their retirement company representative to request income illustrations which will show distribution options and estimated retirement dollars. Currently, income you receive from your Kansas Board of Regents tax sheltered 403(b) retirement contracts will be subject to Federal income tax but will not be subject to Kansas state income tax. This State of Kansas income tax exemption is subject to change at any time by legislative action. To contact TIAA, www.tiaa.org/schedulenow. To contact Voya, a complete list can be found here.
Mandatory Retirement Plan – KPERS
During the current COVID-19 situation, the KPERS office in Topeka is not open to the public. Participants in KPERS Tiers 1, 2 or 3, should contact the KU Benefits Office for more information on their KPERS benefits and assistance in completing and submitting the KPERS retirement application. 2019 KPERS annual statements are not currently available, and there is no timeline for their availability. KU Benefits can be contacted at firstname.lastname@example.org or 785-864-7402.
Voluntary Retirement Plan Participants
If you participated in the Kansas Board of Regents voluntary 403(b) plan and/or the State of Kansas Deferred Compensation 457 plan, please contact your retirement company representative to request income illustrations which will show distribution options and estimated retirement dollars. Currently, income you receive from your Kansas Board of Regents tax sheltered 403(b) retirement contracts will be subject to Federal income tax but will not be subject to Kansas state income tax. This State of Kansas income tax exemption is subject to change at any time by legislative action.
Can I direct the lump sum and/or my leave payouts into a tax-deferred retirement plan?
You can elect to direct some of your sick and/or annual leave payout into a voluntary retirement plan. The VSIP lump sum payment amount will not be included in the calculation of mandatory retirement contributions and will not be included to calculate the maximum deferral for voluntary retirement plan contributions. Once you elect to retire, either under the VSIP or regular retirement, the Benefits Office will ask you whether you would like to receive information about the maximum amount you can defer into the Kansas Board of Regents voluntary 403(b) retirement plan. The IRS provides maximum deferral information in late October/early November for the following calendar year. If you have further questions, please consult the Human Resource Management website or contact the Benefits Office by e-mail at email@example.com.
Retirees of any age (and their covered dependents) can continue coverage under the State of Kansas group health insurance plan. With a 12/31/20 retirement date, your active employee health insurance coverage will end on 12/31/20. You will have the opportunity to continue coverage in the State Employee Health Plan to be effective 1/1/2021. Calendar year 2021 health insurance information for the retiree health plan (and COBRA) will not be available until late October/early November 2020. To give you an idea about what those plans and premiums might look like next year, information about calendar year 2020 plans is provided below. If you participate in the VSIP, you will not participate in Open Enrollment this October as you will, instead, elect coverage under either COBRA or the state’s retiree health plan to be effective 1/1/2021.
Retirees and/or covered dependents who are under age 65 can enroll in COBRA continuation coverage for a maximum of 18 months or until age 65, whichever occurs first. COBRA coverage is the same coverage available to active employees, but the retiree pays the entire premium. COBRA premiums are less expensive than the retiree health plan for those under age 65 through the state of Kansas retiree health plan. For more information, see the SEHP calendar year 2020 COBRA brochure here; the monthly premium information is on page 16.
Retirees and/or covered dependents who are age 65 or older will need to enroll in Medicare Part B to be effective 1/1/2021. The Benefits Office will provide the retiree with a letter to provide to the Social Security Office to enroll in Part B without penalty. Medicare-eligible retirees and/or covered dependents will have additional health plan coverage options including plans designed to coordinate specifically with Medicare Parts A and B. For more information, see the SEHP calendar year 2020 retiree brochure here; the monthly premium information for Medicare-eligible retirees/dependents is on page 25 (and for non-Medicare-eligible retirees/dependents is on page 20).
In order to enroll in the retiree health plan you must have continuous coverage from active employment into retirement; you cannot drop out of the medical insurance plan at retirement and rejoin it later. Retirees do have the option to drop dental coverage; however, once dropped, dental coverage cannot be reinstated.
The latest calendar year booklet with health insurance information for retirees and covered dependents can be found on the State Employee Health Plan’s website: http://www.kdheks.gov/hcf/sehp/
Additional information for Medicare-eligible retirees:
Medicare & You booklet for 2020: https://www.medicare.gov/Pubs/pdf/10050-medicare-and-you.pdf Welcome to Medicare Online Video – As you prepare to transition to Medicare, the Douglas County Senior Resource Center has developed a video version of their regular monthly presentation that is available online. This informational video is presented by the Health Resources Coordinator Lori Phillips and is designed for those new to Medicare to give you a comprehensive overview of the process and includes insightful FAQs that will answer common questions and address various scenarios. You can find the video here.
Health Care Flexible Spending Account
The SEHP information states: “Employees that terminate coverage in 2020 will have 90 days after the contributions end or employment is terminated to pay out claims that were incurred while coverage was active.”
Dependent Care Flexible Spending Account
If you enrolled in the dependent care flexible spending account for calendar year 2020, the SEHP information states: “Employees that terminate coverage in 2020 will have 90 days after the contributions end or employment is terminated to pay out claims that were incurred while coverage was active.”
Health Savings Account
If you enrolled in a Health Savings Account, the funds in that account are yours to keep. If you are Medicare-eligible and you have a Health Savings Account and you will be retiring in 2020, we will need to inform the SEHP as quickly as possible as you will have to be switched to a Health Reimbursement Account under Medicare’s rules. If you have questions, please contact the Benefits Office by e-mail at firstname.lastname@example.org.
Health Reimbursement Account
Your HRA will terminate on 12/31/20 and you will have 60 days from that date to submit any claims incurred while you were covered.
MetLife Voluntary Insurance Plans
If you are enrolled in MetLife Voluntary Insurance plans you will be able to continue that coverage in retirement.
Group Life Insurance Coverage
While actively employed, the University pays for life insurance coverage equal to 150% of your annual salary, and that coverage ends on your last day in pay status. If you purchased additional optional group life coverage, that coverage ends at the end of the month in which you retire. When you retire, you can elect to continue life insurance coverage by returning a completed election form with payment to the insurance company within 60 days from your retirement date.
Portable group term life insurance coverage is available if you are under age 80. Additional information can be found here: https://www.standard.com/eforms/9178_753781.pdf
Conversion coverage is available regardless of your age. There is no age limit, no reduction of coverage based on age, and no minimum amount required. Conversion insurance coverage is individual whole life, and you can purchase the same amount of coverage you presently carry. Additional information can be found here https://www.standard.com/eforms/9563_753781.pdf
To continue optional group life insurance coverage for your spouse and/or dependent children, additional information can be found here https://www.standard.com/eforms/9178_753781.pdf
To view your sick leave or vacation leave balances please log-in to the HR/Pay site. Your last paycheck will be dated 1/22/21 and you will receive your compensation and any accrued leave payout based on the following eligibility criteria:
Sick leave will be paid at retirement, based upon years of service and accumulation as follows:
Years of Service
If you have 15 years of service and 1,300 hours accumulated, you will be paid for 360 hours
If you have 25 years of service and 900 hours accumulated, you will be paid for 240 hours.
Vacation Leave - Faculty in 12-month positions and staff.
A maximum of 240 hours of annual leave will be paid at retirement.
Comp Time and Holiday Comp Time
Any comp time and holiday comp time balances will also be paid at retirement.
Additional Information about KU Retirement Benefits
For information about benefits KU provides to retirees (e.g., KU email address, parking permit, sports and theatre/concert tickets), KPERS retiree rehire provisions, as well as the KU retiree rehire policy, please see http://humanresources.ku.edu/benefits-retirement.
June 8, 2020, - Included information about payout for comp time and holiday comp time.