Your Payment Options

KPPA offers a number of payment options upon retirement. Your age, your beneficiary's age, and your relationship to the beneficiary will determine which payment options you are eligible for at retirement.

All monthly payment options offered are lifetime benefits to the retiree.
At the time of retirement, the member may name only one person, his or her estate, or a trust as beneficiary of the monthly retirement allowance. After the first day of the month in which a retired member receives their first retirement payment, a retired member may not change their payment option or account beneficiary designation except in limited circumstances outlines in Kentucky Revised Statutes 61.542.
For most payment options, an individual must be receiving a monthly retirement allowance to participate in the medical insurance program.
As outlined in Kentucky Revised Statutes 61.542, a retiree may have the option to change their monthly survivor benefit designation and payment option under limited circumstances. Click here to learn more about the requirements to update your beneficiary and payment option after you retire.

Connect With Us

Basic / Annuity Option

This option provides a monthly benefit to the member until death. It does not provide any benefits to the beneficiary after the member’s death. If the member dies before receiving an amount equal to his/her account balance at the time of retirement, the beneficiary will receive the remaining account balance in a lump sum payment.

Partial Lump Sum Option without Survivor Rights

Available to members effective January 1, 2024

This option provides a one-time payment equal to 12, 24, 36, 48, or 60 times the monthly benefit under the Basic or Annuity payment option, plus a monthly payment to the retired member until death. The monthly payment is actuarially reduced to reflect the lump-sum payment amount. This lump-sum is paid separately by check and mailed; however, the monthly benefit payment is direct deposit. Learn more about the PLSO

Survivor Benefits: This option does not provide any benefits to the beneficiary after the member’s death. If the member dies before receiving an amount equal to their accumulated account balance, the beneficiary will receive the remaining balance in one payment.

Insurance Coverage: The beneficiary is not eligible for monthly benefits and cannot participate in the insurance program.

Partial Lump Sum Option with Survivor Rights

Available to members effective January 1, 2024

This option provides a one-time payment equal to 12, 24, 36, 48, or 60 times the monthly benefit under the Survivorship 100% Option, plus a monthly payment to the retired member until death. The monthly payment is actuarially reduced to reflect the lump-sum payment amount. This lump-sum is paid separately by check and mailed; however, the monthly benefit payment is direct deposit. Learn more about the PLSO

Survivor Benefits: If the member dies before the beneficiary, the beneficiary is eligible for the same monthly benefit.

Insurance Coverage: The beneficiary is eligible for monthly benefits and may participate in the insurance program if eligible.

Life with 10 Years Certain

If the member is under the age of 76 at the time of retirement, they may choose this option. This is lifetime payment to the retiree. However, if the retiree were to expire within ten (10) years of their retirement date, KPPA will continue to pay the beneficiary for the remainder of that ten (10)-year period. At the end of the ten-year period, the payments to the beneficiary cease.

Life with 15 Years Certain

If the member is under the age of 68 at the time of retirement, they may choose this option. This is lifetime payment to the retiree. However, if the retiree were to expire within fifteen (15) years of their retirement date, KPPA will continue to pay the beneficiary for the remainder of that fifteen (15)-year period. At the end of the fifteen-year period, the payments to the beneficiary cease.

Life with 20 Years Certain

If the member is under the age of 62 at the time of retirement, they may choose this option. This is lifetime payment to the retiree. However, if the retiree were to expire within twenty (20) years of their retirement date, KPPA will continue to pay the beneficiary for the remainder of that twenty (20)-year period. At the end of the twenty-year period, the payments to the beneficiary cease.

Survivorship 100%

This option guarantees a monthly benefit to the member for their lifetime. If the member predeceases the beneficiary, the beneficiary is eligible for the same monthly benefits until death. This option provides a monthly benefit after the member’s death and will allow the beneficiary to participate in the medical insurance program. This option is available only if the member and the beneficiary meet certain age requirements. Note: If the beneficiary is the member's spouse, the age requirements are waived, making this option available to the member regardless of age.

Survivorship 66 2/3%

This option guarantees a monthly benefit to the member for their lifetime. If the member predeceases the beneficiary, the beneficiary is eligible for a monthly benefit equal to 66 2/3% of the retiree’s last monthly benefit until the beneficiary’s death. This option provides a monthly benefit after the member’s death and will allow the beneficiary to participate in the medical insurance program. This option is available only if the member and the beneficiary meet certain age requirements. Note: If the beneficiary is the member's spouse, the age requirements are waived, making this option available to the member regardless of age.

Survivorship 50%

This option guarantees a monthly benefit to the member for their lifetime. If the member predeceases the beneficiary, the beneficiary is eligible for a monthly benefit equal to 50% of the member’s last monthly benefit until their death. This option provides a monthly benefit after the member’s death and will allow the beneficiary to participate in the medical insurance program.

Pop-Up

This option guarantees a monthly benefit to the member for their lifetime. If the member predeceases the beneficiary, the beneficiary is eligible for the same monthly benefit until their death. However, if the beneficiary predeceases the member, or the beneficiary is the member's spouse and you divorce after retirement, the monthly benefit "pops up", or increases, to the amount under the Basic/Annuity option and any past applicable cost of living adjustments are applied to this amount. This option provides a monthly benefit after the member's death and will allow the beneficiary to participate in the medical insurance program. This option is available if the member and the beneficiary meet certain age requirements. Note: If the beneficiary is the member's spouse, the age requirements are waived, making this option available to the member regardless of age.

Actuarial Lump Sum Refund

This option provides a one-time lump sum payment to the member that is the actuarial equivalent of the amount the member would have received had the benefits been paid over 60 months. It is important to be especially careful when considering this payment option. By selecting this option, the member forfeits all other benefits, including health insurance benefits and the $5,000 death benefit. Because this is a lump-sum payment, all contributions and leave balances must be certified by the employer before payment can be made. If the member is Tier 1 or Tier 2, the refund amount will be the total of contributions and interest if that amount is higher than the actuarial lump sum. Tier 3 members are also not eligible for the Actuarial Lump Sum, only the total of contributions and associated interest.

If you plan to take the Actuarial Lump Sum Refund, a Form 6025, Direct Rollover/Direct Payment Election is required.

Note: This is a retirement benefit, not a refund of the account. An individual electing this payment option cannot repay the actuarial refund if employed with a participating employer at a later date. If selecting this option, the member may be subject to additional tax penalties.

Social Security Adjustment Option (Without Survivor Rights)

A member under the age of 62 at retirement may elect to take a larger monthly payment until reaching age 62, when they may become eligible for a benefit from Social Security. The monthly benefit will be reduced the month following the member’s 62nd birthday. This option allows the member to draw a larger benefit until age 62. This option does not affect the amount of Social Security benefits that the member will receive. A beneficiary is not eligible for benefits if the member dies. This option is available only if the member and the beneficiary meet certain age requirements.

Social Security Adjustment Option (With Survivor Rights)

This provides the same benefits as the Social Security Adjustment Option Without Survivor Rights. In addition, it guarantees the same benefit to the beneficiary if the member dies. If the member dies before age 62, the beneficiary draws the higher payment until the member would have become age 62. Thereafter, the beneficiary will receive the same reduced monthly benefit that the member would have received. This option is available only if the member and the beneficiary meet certain age requirements.

Ten Years Certain

This option is only available for those KERS and/or CERS members in hazardous positions or those members participating in SPRS.

This option provides a monthly payment guaranteed for 120 months to the member, or if the member dies, to the beneficiary for the remainder of the 120 months. After the 120-month period, the member still retains the insurance benefit but is no longer eligible for any other benefits. This benefit pays a higher monthly amount, but only for ten (10) years. After ten (10) years, this benefit ceases altogether and neither the member nor the beneficiary will receive further payments. In addition, after the ten (10)-year period, there will be no $5,000 death benefit payment at the time of the member's death. Be especially careful when considering this payment option; there will be no income from this option after ten (10) years. If selecting this option, you may be subjected to additional tax penalties.