Tier 2 members are eligible to opt-in to the Tier 3 Hybrid Cash Balance plan. The decision to opt-in to Tier 3 is an irrevocable choice and members who do so will be subject to the same statutes and regulations governing Tier 3 membership as those whose participation date is January 1, 2014 and later. Tier 2 members that choose this option will have their accumulated contributions, less any interest earned, deposited into a hybrid cash balance account. Employer pay credits will be added to the accumulated account balance for each month the member contributed prior to their election date. Interest credits will only be applied for periods on or after the effective date of election.
Service purchases made as a Tier 2 member that are not available under Tier 3 will be refunded and service reduced accordingly if the member opts-in to Tier 3.
Tier 2 members currently employed by an agency that chose a "soft freeze" cessation are not eligible to continue participation if they opt-in to Tier 3.
Switching to Tier 3 may require a member to retire later than he or she would have been eligible to do so had he or she remained in Tier 2; Tier 2 members can retire with a reduced retirement, whereas Tier 3 members have no reduced retirement option. If a member has service with the Teachers' Retirement System, Legislators Retirement Plan, or Judicial Form Retirement System, he or she will forfeit the benefits of reciprocity. Members considering this change may find it helpful to review our Benefit Tier Comparison.
How do I change my Tier 2 account to Tier 3?
Tier 2 members must make the Tier 3 election through their Member Self Service account in the Account Summary section. Using Self Service, eligible members have the option to generate a comparison of their account balance and projected retirement payment options for an unreduced retirement benefit under Tier 2 and Tier 3.
Tier 2 members should review their individual tier comparison closely when considering how their benefits will change. The decision to opt-in to Tier 3 is an irrevocable choice and members who do so will be subject to the same laws governing Tier 3 membership as those whose participation date is January 1, 2014 and later.
If the member chooses to opt-in to Tier 3, the member will need to complete and submit an affidavit online through Self Service. Members should be aware that submission of the affidavit is their consent to opt-in to Tier 3.
Upon submission of the required affidavit, KPPA will proceed with converting the Tier 2 account to Tier 3. The member will receive email notification once the process is complete.