KPERS Retirement Options: Payment Options, PLSO and Refund

Updated October 2, 2026. Quick answer: The Kansas Public Employees Retirement System (KPERS) application offers seven monthly options: the maximum benefit with no survivor benefit, three joint survivor options and three life-with-years-certain options. Kansas statute sets each reduction, for example 98% of the base benefit for life with 5 years certain. The choice is irrevocable after retirement. A partial lump sum can be taken in 10% increments up to one-half of the benefit’s present value, and the monthly benefit is permanently reduced. The percentages and the one-half limit in this answer are the rules for members first employed before July 1, 2009; later hires follow different sections of the statute, quoted below. A member who withdraws contributions forfeits all service and benefits.

More on public pension systems, topic by topic: Kansas KPERS joint-survivor options, Kansas KPERS partial lump-sum option and Kansas KPERS return to work after retirement.

Wichita city employees belong to a separate city system with its own rules: Wichita Employees’ Retirement System decisions.

Kansas City, Missouri city employees belong to a separate city system with its own rules: Kansas City employees retirement decisions.

The seven options and what each one pays

The KPERS retirement application lists seven monthly choices. The first is labeled “Maximum Monthly Benefit (with no survivor benefit)”. The other six come from the options statute, K.S.A. 74-4918, which says the amount under an option “shall be based on the age of the member and, if applicable, the age of the joint annuitant”. It also sets a ceiling: “In no case shall the total amount of retirement benefit paid under any option provided in this section be more than 100% of the retirement benefit which would have been otherwise payable if no option had been elected under this section.”

The percentages in this table are the K.S.A. 74-4918(3) schedule. For a member first employed on or after July 1, 2009 (KPERS 2) the statute says (K.S.A. 74-49,209): “Any member who is first employed by a participating employer on or after July 1, 2009, may elect to have such member’s retirement benefit paid under one of the options provided in K.S.A. 74-4918, and amendments thereto, in lieu of having it paid in the form stated in K.S.A. 74-49,205 and K.S.A. 74-4915, and amendments thereto, except that any such member or such member’s spouse that elects to be paid a lump sum amount to be paid to the member upon retirement as provided pursuant to K.S.A. 74-4918, and amendments thereto, shall be paid in 10% increments and shall not exceed 30% of the actuarial present value of the benefit provided in K.S.A. 74-49,205 and K.S.A. 74-4915, and amendments thereto; and for any such member who elects any joint and survivor options provided in K.S.A. 74-4918, and amendments thereto, such member shall have such member’s annual retirement benefit determined and then reduced by an amount recommended by the actuary employed by the system and approved by the board”. For a member first employed on or after January 1, 2015 (KPERS 3, K.S.A. 74-49,301(b)) the statute says (K.S.A. 74-49,313(c)): “The form of benefit payable under subsections (a) and (b) shall be a single life annuity with 10-year certain”. “The member may elect any option described in K.S.A. 74-4918, and amendments thereto, except the partial lump-sum option, subject to actuarial factors established by the board from time to time”.

The joint annuitant’s age is “computed to the nearest whole year”. The certain period is “measured from the commencement of retirement benefit payments”.

A computed example with an assumed age gap

A computed example from an assumed $2,000 monthly base benefit and an assumed joint annuitant 3 years younger than the retiree, not a KPERS figure: the statute multiplies the base monthly benefit by a percentage. For the joint and one-half option the percentage is 91 minus .4 for each of the 3 years, which is a computed 89.8%, so the computed monthly amount for the retiree is $1,796.00 and for the survivor $898.00 (one-half of that). For the three-quarters option the percentage is 87 minus .5 for each of the 3 years, which is a computed 85.5%, so the computed amount for the retiree is $1,710.00 and for the survivor $1,282.50 (three-quarters of that). For the 100% option the percentage is 83 minus .6 for each of the 3 years, which is a computed 81.2%, so the computed amount for the retiree and for the survivor is $1,624.00 each.

The life-certain options use a flat percentage with no age adjustment. On the same assumed $2,000 base, the computed amount at 98% is $1,960.00 a month, at 95% it is $1,900.00 and at 88% it is $1,760.00. If the joint annuitant were older than the retiree, the statute adds the per-year amount instead of subtracting it, so the percentages would be higher than in this example. The actual base benefit comes from the KPERS benefit calculation for the member’s own plan and service, which this page does not recompute.

What is irrevocable, and the divorce exception

A joint option needs a named person. The statute says “A specific person must be designated as joint annuitant at the time of election of the joint and ½ to joint annuitant survivor option, the joint and survivor option and the joint and ¾ to joint annuitant survivor option.” The application repeats it: “Your joint annuitant cannot be changed later.” The election has a deadline: “Such election must be made before the date of actual retirement.” The application itself must be submitted early: “Submit your retirement application at least 30 days before the day you want to retire.”

Once retirement begins the choice is fixed. The statute says that, with a stated exception, “an option elected by a member as provided in this section shall not be changed or canceled nor shall the named joint annuitant be changed after the date of actual retirement of the member”. KPERS tells applicants “Kansas law does not allow you to change this option after your retirement date.” The signature section of the application says the signer is confirming “your retirement benefit option” and an understanding that the choice is irrevocable.

The one exception the statute states concerns divorce after retirement, where the ex-spouse was named as joint annuitant: “the joint annuitant option may be canceled and retirant’s benefit returned to the maximum amount of such retirant’s retirement benefit”, starting the first month after the district court orders the cancellation. The statute adds two limits: “The retirant shall not receive a refund or interest of any amounts already paid to fund the original joint annuitant benefit.” “The retirant may not name a subsequent joint annuitant once the original joint annuitant option has been cancelled.”

If the named joint annuitant dies before the retiree, the statute provides a pop-up. The retirant’s benefit “shall be adjusted automatically to the retirement benefit which the retirant would have received if no option had been elected under this section”. That provision is written for the three joint options. For the life-certain options the beneficiary is named on a separate form: “If you chose a life-certain option, you must submit a Designation of Beneficiary”. “You can change beneficiaries at any time by completing a new form.”

For the single life versus survivor trade-off in general terms, see single life versus joint and survivor.

When a spouse must consent

Kansas treats a spouse as having a stake in two decisions. On retirement, KPERS says: “Kansas law requires spousal consent if you select a Partial Lump-Sum Option (PLSO) and/or any retirement benefit option that would provide less than one-half of your monthly retirement benefit to your spouse if you die.” On who signs, the application says “This section must be completed by your spouse if you are married and chose the Maximum Monthly Benefit, a Life-Certain Option and/or a PLSO.” and “Spouse’s signature must be notarized.”

On withdrawal, the KPERS withdrawal booklet explains: “Kansas law recognizes a spouse’s financial interest in a vested member’s decision to withdraw Retirement System contributions by requiring the member’s spouse to consent to the withdrawal.” The member’s own signature must be notarized too: “Your signature must be notarized or KPERS cannot process your withdrawal.” The general rule and the paperwork for waiving a survivor benefit are covered in spousal consent to waive a joint and survivor annuity.

The partial lump-sum option (PLSO)

KPERS describes the PLSO as taking part of the retirement benefit as an up-front lump sum at retirement, combined with one of the other options to provide “reduced, regular monthly payments for the rest of your life”. The statute is the source of the limits: “The lump sum amount designated by the member must be in 10% increments and shall not exceed ½ of the actuarial present value of the benefit”. For the rest of the benefit, “the member must elect to have the remaining actuarial present value paid in a monthly amount under the provisions of K.S.A. 74-4915”, or under one of the reduced options above. That one-half limit is the rule for members first employed before July 1, 2009. For KPERS 2 the cap is 30 percent (K.S.A. 74-49,209, quoted in full under the options table above), and for KPERS 3 the statute says (K.S.A. 74-49,313(c)): “The member may elect any option described in K.S.A. 74-4918, and amendments thereto, except the partial lump-sum option, subject to actuarial factors established by the board from time to time”.

The application’s form lists 10%, 20%, 30%, 40% and 50%, with the footnote “*KPERS 2 members can only choose a 10%, 20% or 30% option.” “If you select any other option, your election will default to 30 percent.” A choice is required: “You must indicate whether you are electing the PLSO.”

What it costs is stated on the election form: “I further understand that my monthly benefit will be permanently reduced according to the percentage I choose.” Two further rules apply. “No interest is payable on any lump sum.” “In the event you die before receiving the lump-sum payment, it will be paid to your spouse.” To weigh a lump sum against the monthly amount it replaces, see the pension lump sum break-even.

The statute separately provides for a surviving spouse. If a member eligible to retire dies without retiring, “the member’s spouse, if the spouse is the sole beneficiary for the member’s accumulated contributions, may elect to receive benefits under one of the options provided in this section in lieu of receiving the member’s accumulated contributions”.

Leaving KPERS: vested, not vested, and the two vesting rules

KPERS defines the term in its withdrawal booklet: being vested means you have earned enough service credit to guarantee a retirement benefit, even if you leave covered employment. For KPERS 1, 2 and 3 the booklet says “All KPERS members vest with five years of service.” The statute reads differently: “if such member has completed 10 years of credited service at date of termination, or commencing July 1, 2009, if such member has completed five years of credited service at the date of termination, such member automatically shall be granted a vested retirement benefit in the system”. The two rules are not simply the statute against the booklet: the statute’s one sentence itself states both a 10-year rule and a five-year rule that commences July 1, 2009 (K.S.A. 74-4917(2)). For a member first employed on or after July 1, 2009, the normal retirement section also states (K.S.A. 74-49,204): “the attainment of age 65 with the completion of five years of credited service, or age 60 with the completion of 30 years of credited service”. A member near the line should confirm the rule for their own hire date and plan with KPERS.

For a vested member who leaves, KPERS says: “You are guaranteed a monthly retirement benefit for the rest of your life if you leave your contributions in your account.” “Your contributions continue to earn interest and you can withdraw them at any time if you change your mind.” “Often, if you have a significant amount of service, your vested benefit is more valuable than the amount of your actual contributions.” A vested member who returns is treated simply: “you will immediately become a contributing active member again and keep the credit for your past public service”.

A member who is not vested has no guarantee. KPERS says: “You need to withdraw your account balance within five years of the date you end employment.” “Your contributions earn interest for five years (two years for KPERS 3 members).” “After five years, you forfeit your service.” A return within five years is treated this way: “You will return as a KPERS 3 member.” The statute makes KPERS 3 the plan for new hires (K.S.A. 74-49,301(b)): “Any employee who is first employed by a participating employer on or after January 1, 2015, shall be a member of the system under the provisions of this act on the first day of employment of such employee with such participating employer”. The statute on re-employment is similar in shape: a rehire within five years is not a break in continuous employment if the member “has not withdrawn accumulated contributions”, while after five years “such former member shall be deemed to be a new employee”. The same subsection adds: “Such period while not employed shall not be credited”. A short break is handled separately for a non-vested employee (K.S.A. 74-49,301(c)(1)): “Any non-vested employee other than an elected official of a participating employer who has been employed in a covered position as defined in K.S.A. 74-49,202, and amendments thereto, other than with a school employer, shall remain a member of the Kansas public employees retirement system as provided pursuant to K.S.A. 74-4901 et seq., and amendments thereto, on and after July 1, 2009, if the member: (A) Does not leave covered employment with a participating employer for a period of time exceeding 30 consecutive days; (B) does not withdraw such member’s annuity savings account as defined by K.S.A. 74-49,302, and amendments thereto, forfeiting such member’s membership in the interim; and (C) returns to covered employment with a participating employer in a covered position within such 30-day time period”.

A KPERS 1 member has one more route: “KPERS 1 members who reach age 65 within the five-year period may apply for retirement benefits.”

Withdrawing contributions

A withdrawal is the opposite of the choices above, and KPERS is blunt about the cost: “If you withdraw, you will give up all Retirement System rights, benefits and service credit.” “Employer contributions made on your behalf stay with the Retirement System.” The form makes it permanent: “my decision to withdraw contributions is irrevocable” and “By signing this application, you irrevocably forfeit all service and any right to disability, retirement and any other benefits”.

What comes back: “You can receive your contributions plus interest as a direct payment to you or roll over the amount into an eligible retirement plan.” Timing rules: “Kansas law requires that your application for withdrawal cannot be signed and submitted until 31 days after you end employment.” “Count the first day after the date you last earned compensation as day one.” After that, “we will send payment within four weeks”. Who cannot use the route: “You may not withdraw contributions if you are employed in a covered position, or you move to a non-covered position with any KPERS-affiliated employer.”

Interest has a date attached. “Interest is credited annually on June 30. If you withdraw before June 30, you will not receive your interest for the current year.” “Interest for KPERS 3 is credited quarterly.” The statute’s refund provision is framed around a termination “not followed by employment with such participating employer or another participating employer within 30 days of such termination”.

The general comparison of taking a refund and leaving the money in the plan is on pension refund versus leaving it in. For KPERS the documents above frame it as: a vested member keeps a guaranteed lifetime benefit by leaving contributions, and a withdrawal ends every right to that benefit.

Taxes, as KPERS states them

The KPERS retirement booklet says: “In general, your retirement benefits are subject to federal tax, but not Kansas state taxes.” “KPERS lump-sum benefits, including earnings, generally keep their Kansas state tax-exempt status, even when rolled over into a qualified IRA containing other retirement funds.” “If you now reside in another state, check the tax laws in that state.” For Kansas state tax treatment of pensions more broadly, see Kansas retirement taxes and does Kansas tax pensions.

On the partial lump sum, KPERS says: “Lump-sum payments are taxable income under federal law unless directly rolled over into an eligible retirement plan.” “If you do not roll over your lump sum, KPERS is required to withhold 20% for federal taxes.” “You cannot withhold less than 20%.” “You may owe additional federal taxes and possibly a 10% federal penalty if you are under age 59 ½.” On rollovers, “Generally, the 60-day rollover deadline can’t be extended.” For a withdrawal, “Option 2 Have your contributions paid directly to you. KPERS is required to withhold 20% for federal taxes.” “KPERS does not withhold federal income tax for a rollover to a Roth IRA.”

For monthly benefits, “If you don’t submit a W4-P withholding form to KPERS, federal law requires that we automatically withhold taxes from your monthly benefit as if you were single with no adjustments.”

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of KPERS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. KPERS’s own booklets describe a direct rollover as the way to avoid withholding on a lump sum or a withdrawal. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan”. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

Returning to work after retiring

A retiree who goes back to a KPERS employer faces a waiting period. The application says: “Kansas law requires a 60-day waiting period (180-day if retiring before age 62) for KPERS members who return to work for any KPERS employer.” The statute states the rule with an exception (K.S.A. 74-4914(9)(a)): “Notwithstanding the provisions of subsection (6) to the contrary, commencing January 1, 2018, any retirant who is retired more than 60 days, if such retirant’s age on the date of retirement is 62 or older, or is retired more than 180 days, if such retirant’s age on the date of retirement is less than 62, and who is subsequently hired without any prearranged agreement with the participating employer in a covered position, as defined in K.S.A. 74-49,202, and amendments thereto, or an independent contractor or a third-party entity who contracts service to fill such covered position shall not be subject to an earnings limitation that when met or exceeded requires that the retirant not receive a retirement benefit for any month for which such retirant serves in such covered position”. The member also signs a certification: “I certify I have not made and will not make any prearrangement before retirement or during my waiting period”. The penalty for a violation is stated: “my retirement benefit will be suspended starting the month I return to work until six months after I end employment”, and “I will be required to repay to the Retirement System all monthly retirement benefits received after I began employment”. The statute lets the penalty be waived (K.S.A. 74-4914(7)(b)): “On and after July 1, 2019, the executive director may waive such penalties under this subsection if it is determined by the retirement system that any of the following conditions were satisfied: (i) The retirant’s total length of reemployment was less than 21 calendar days; (ii) the retirant’s total compensation during the total length of reemployment was less than 10% of the amount of such retirant’s retirement benefit that would be suspended pursuant to this subsection; or (iii) other facts and circumstances indicated that the retirant would not have been reemployed but for an error on the part of the participating employer or the retirement system in verifying the retirement status of such retirant and such retirant immediately terminated employment upon being notified of the violation”. Elected office has its own rule (K.S.A. 74-4914(6)(b)(viii)): “state or local elected officials. A retirant shall not be employed in an elected office within 30 days of such retirant’s retirement, except that if a retirant is filling a vacant elected office, no waiting period shall be required”.

What this page could not settle

• Service purchase or buyback rules are not stated in the four KPERS documents read, so nothing on this page covers what buying service costs.
• Cost-of-living adjustments after retirement are not stated in the documents read.
• The ages at which a member may retire are not stated in the documents read. The statute refers to normal retirement under K.S.A. 74-4914(1) and early retirement under subsection (4) without giving the ages.
• The base benefit formula that the option percentages are applied to is not stated in the documents read, so the examples above start from an assumed figure.
• Which vesting rule applies to a member hired at a particular time is not settled: the statute’s own sentence states both a 10-year rule and a five-year rule that commences July 1, 2009, and the withdrawal booklet states five years for KPERS 1, 2 and 3.

Kansas KPERS topic pages

Each row links to the page that reads one topic in the Kansas KPERS member documents: the topic, then the summary that page carries.

Common mistakes

• Treating the option choice as changeable after retirement; the statute and the application both say it is not, apart from the divorce exception.
• Choosing a joint option without comparing it to the life-certain options, which pay a higher percentage but give a survivor only the balance of the certain period.
• Forgetting that a PLSO permanently reduces the monthly benefit and that a married member needs the spouse’s notarized signature for it.
• Withdrawing contributions without weighing that it gives up all service credit and every future benefit, including disability.
• Waiting past the five-year window as a non-vested member and losing the service credit.
• Starting a return-to-work arrangement before retirement, which KPERS treats as a violation of the waiting period.

Related on this site: Kansas retirement taxes, does Kansas tax pensions, public pension retirement decisions by system and pension refund versus leaving it in.

Sources

• Kansas Statutes, K.S.A. 74-4918, retirement benefit options (Kansas Office of Revisor of Statutes): https://www.ksrevisor.org/statutes/chapters/ch74/074_049_0018.html
• Kansas Statutes, K.S.A. 74-4917, termination of employment and payment of accumulated contributions (Kansas Office of Revisor of Statutes): https://www.ksrevisor.org/statutes/chapters/ch74/074_049_0017.html
• KPERS, Retirement Application booklet (6/26): https://www.kpers.org/forms/kretirementbooklet.pdf
• KPERS, Withdrawal Application booklet (5/26): https://www.kpers.org/forms/kwithdrawalbooklet.pdf
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 2, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.