Updated October 22, 2026. Quick answer: The KPERS retirement application booklet (6/26) lets a retiring member take a partial lump sum of 10%, 20%, 30%, 40% or 50% of the lifetime benefit’s actuarial present value, with a permanently reduced monthly benefit. KPERS 2 members are limited to 10%, 20% or 30%, and the booklet says this limit does not affect KP&F or Judges. Those limits describe KPERS 1 and KPERS 2 members. A member who was first employed by a participating employer on or after January 1, 2015 (KPERS 3, K.S.A. 74-49,301(b)) has no partial lump-sum option: K.S.A. 74-49,313(c) says the member “may elect any option described in K.S.A. 74-4918, and amendments thereto, except the partial lump-sum option”.
What this covers
The booklet’s Part C is headed “Partial Lump-Sum Option (PLSO)”. This page quotes it and the booklet’s tax notes. For the wider choices, see KPERS retirement decisions and public pension retirement decisions.
What the booklet says
Each row is the booklet’s own wording.
| Topic | What the booklet says |
|---|---|
| What it is | “You can take part of your retirement benefit in an up-front lump sum at retirement.” |
| How the lump sum is sized | “Choosing this option means you will receive a single lump-sum payment equal to a given percentage of your lifetime benefit’s actuarial present value.” |
| What happens to the monthly benefit | “This lump sum is then combined with one of the other retirement options to provide reduced, regular monthly payments for the rest of your life.” “I further understand that my monthly benefit will be permanently reduced according to the percentage I choose.” |
| The percentages on the form | 10%, 20%, 30%, 40% and 50%. |
| KPERS 2 limit | “KPERS 2 members can only choose a 10%, 20% or 30% option.” “This does not affect KP&F or Judges.” |
| Interest and death before payment | “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.” “If you have no spouse, it will be paid to your designated beneficiary(ies).” |
| Spouse | “Kansas law requires spousal consent if you select a Partial Lump-Sum Option (PLSO)”. |
Taxes and withholding
The booklet says its benefit is subject to federal income tax and not Kansas income tax. Each row is the booklet’s own wording.
| Topic | What the booklet says |
|---|---|
| Federal and Kansas tax | “In general, your retirement benefits are subject to federal tax, but not Kansas state taxes.” |
| If not rolled over | “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.” |
| Withholding floor | “You cannot withhold less than 20%.” “Federal tax will not be withheld on payments less than $200.” |
| Early distribution tax | “You may owe additional federal taxes and possibly a 10% federal penalty if you are under age 59 ½.” |
| Rollover minimum | “The minimum rollover is $500.” |
A withholding example
The booklet gives rates, not an example. This figure is computed here from the printed 20% minimum and an invented amount. It is not printed by KPERS.
| Case | Result |
|---|---|
| Lump sum of $40,000 (invented), not rolled over | computed: $40,000 x 20% = $8,000 withheld at the minimum rate |
Public safety and the 10% tax
The booklet’s tax notice lists exceptions to the 10% additional tax, including “Payments made after you separate from service if you are at least age 55 in the year of the separation;” and “Payments from a governmental plan made after you separate from service as a qualified public safety employee and, in the year of separation, have reached age 50 or 25 years of service under the Plan;” The notice does not say which KPERS members count as a qualified public safety employee, so confirm that with KPERS. The wider rules are on 20 percent withholding on a pension lump sum and the lump sum versus monthly annuity break-even.
What the booklet does not say
It does not print the size of the monthly reduction for each percentage. It says only that the monthly benefit is permanently reduced, so ask KPERS for an estimate at each percentage before choosing. Kansas’s tax rules on pension income are on how Kansas taxes retirement income.
Edition
This page reads the Kansas Public Employees Retirement System (KPERS), Retirement Application booklet (6/26), the 6/26 edition of the application booklet. It is one booklet for three systems: the form’s own Part A offers the boxes KPERS, KP&F and Judges. Where a rule is limited to one of them the page says so. The booklet points to a separate Retirement Options publication for each option’s details, which this page does not read, and Kansas law and your own KPERS account control over this summary.
Common mistakes
- Choosing a percentage the plan does not allow. The booklet says “KPERS 2 members can only choose a 10%, 20% or 30% option.”
- Expecting interest on the lump sum. The booklet says “No interest is payable on any lump sum.”
- Planning to withhold less than the minimum. The booklet says “You cannot withhold less than 20%.”
Related: KPERS retirement decisions, public pension retirement decisions, and 20 percent withholding on a pension lump sum.
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Answer againSources
- Kansas Public Employees Retirement System (KPERS), Retirement Application booklet (6/26): www.kpers.org
- Related official page (not quoted): IRS, Topic no. 558, Additional tax on early distributions: www.irs.gov
- Related official page (not quoted): IRS, Topic no. 410, Pensions and annuities: www.irs.gov
Read from the pension system handbooks linked above on October 22, 2026. General information, not tax advice. Your own facts decide the outcome, and a pension system or a qualified professional is the right place to confirm anything consequential.