No salary-times-service formula. KPERS 3 is a cash balance plan: your contribution account (your 6% plus interest) and your employer retirement credits (plus interest) are turned into a lifetime monthly benefit at retirement using an actuarial annuity factor for your age. KPERS: 'there's no simple formula to calculate a KPERS 3 benefit'. KPERS 3 Retirement Options, PDF p. 1; KPERS 3 webinar, slides 11, 19
1. Money goes in
You put in 6% of pay. Your employer adds retirement credits, which rise with your service:
| Your service | Retirement credit |
|---|---|
| Under 5 years | 3% of pay |
| 5 to 11 years | 4% of pay |
| 12 to 23 years | 5% of pay |
| 24+ years | 6% of pay |
2. Interest and dividends
Both accounts earn a guaranteed 4% a year, credited at least quarterly on the balance at the end of the previous quarter. KPERS 3 at a Glance, PDF p. 1; KPERS 3 webinar, slide 12
Each year an additional interest credit ('dividend') is posted around March 31 on the December 31 balance of each account: 75% of the five-year average net compound return on the market value of KPERS assets above 6%. For 2015-2018 the average ran from 2015 and the dividend was capped at 1.5%; from the December 31, 2019 balance on there is no cap. If the 5-year average is 6% or less, there is no dividend. 2025 actuarial valuation, p. 153 (dividend = 75% of the five-year average net compound return above 6.0%); K.S.A. 74-49,306(b)
| Year | KPERS return | 5-year average | Dividend |
|---|---|---|---|
| 2021 | 15.7% | 10.7% | 3.525% |
| 2022 | -9.8% | 5.7% | 0% |
| 2023 | 10.6% | 8.5% | 1.875% |
| 2024 | 8.8% | 6.9% | 0.675% |
| 2025 | 12.9% | 7.3% | 0.975% |
Dividend = 75% of the 5-year average above 6%. KPERS's actuary assumes 2% a year. 2025 actuarial valuation, p. 153 (schedule of dividend rates); 2025 actuarial valuation, p. 2 (2025: 7.3% average, 0.975% dividend)
3. At retirement: balance ÷ annuity factor
The factors use a 5% rate (KPERS's assumed return minus 2%) and the Base Benefit form: life with 10 years certain. 2025 actuarial valuation, p. 173 ('KPERS 3 Annuity Factors: Payment Form: 10-year certain and life; Interest Rate: 5.00%')
KPERS hasn't published its KPERS 3 annuity factors by age. The only one tied to an age is 13.061217 at 66.
The calculator projects your account balance, then divides by an annuity factor you can see and change. It starts at 13.061217 (KPERS's age-66 factor) and says so; use the factor from your KPERS estimate for your age.
Would settle it: KPERS's annuity factor table (adopted April 2024) or the KPERS 3 Membership Guide; a KPERS 3 benefit estimate from your online account.4. Optional: a lump sum and a COLA
If you're eligible for full retirement you can take any percent or dollar amount up to 30% of your account balance in a lump sum; the rest is turned into your monthly benefit. Not available with early retirement. Asking for more than 30% defaults to 30%. KPERS 3 retirement booklet, p. 4, Part D and p. 13; KPERS 3 Retirement Options, PDF p. 2, Partial Lump-Sum Choice
At retirement you can choose no COLA, 1% or 2% a year. Your starting benefit is lower to pay for it. Increases are on July 1 and begin one year after retirement. KPERS 3 retirement booklet, p. 4, Part C and p. 7; KPERS 3 Retirement Options, PDF p. 2, COLA Options
KPERS says the KPERS 3 COLA is a fixed 1% or 2% each July 1 starting a year after you retire, but not whether it compounds or what it costs.
We illustrate compounding yearly increases on the base amount and don't show the lower starting check.
Would settle it: KPERS 3 Membership Guide or a KPERS 3 estimate with the COLA option.Not sure you're in KPERS 3? Check your tier. The Base Benefit is one of several payment options, and the self-funded COLA is explained on the COLA page. If you leave before retiring, see withdraw or keep your account.
Everything KPERS says about KPERS 3
- KPERS 3: No salary-times-service formula. KPERS 3 is a cash balance plan: your contribution account (your 6% plus interest) and your employer retirement credits (plus interest) are turned into a lifetime monthly benefit at retirement using an actuarial annuity factor for your age. KPERS: 'there's no simple formula to calculate a KPERS 3 benefit'.KPERS 3 Retirement Options, PDF p. 1; KPERS 3 webinar, slides 11, 19
- KPERS 3 retirement credits from your employer: 3% of pay with under 5 years, 4% of pay with 5 to 11 years, 5% of pay with 12 to 23 years, 6% of pay with 24 or more years of service.KPERS 3 Retirement Benefits, PDF p. 3, How you earn retirement credit; KPERS 3 at a Glance, PDF p. 2
- KPERS 3 interest: a guaranteed 4% a year, credited at least quarterly on the balance at the end of the previous quarter.KPERS 3 at a Glance, PDF p. 1; KPERS 3 webinar, slide 12
- Recent KPERS 3 dividends: 2021: 3.525%; 2022: 0%; 2023: 1.875%; 2024: 0.675%; 2025: 0.975%. KPERS's actuary assumes 2% a year on top of the 4% guarantee.2025 actuarial valuation, p. 153 (schedule of dividend rates); 2025 actuarial valuation, p. 2 (2025: 7.3% average, 0.975% dividend)
- KPERS 3 annuity: your total balance divided by an annuity factor. KPERS's example: $200,000 + $140,000 = $340,000, divided by 12.2625 = $27,727 a year, or $2,310.58 a month.KPERS 3 webinar, slide 19
- Check with KPERSThe annuity factors use a 5% interest rate (the assumed investment return minus 2%) and life with 10 years certain. The only factor KPERS ties to an age is 13.061217 at age 66; KPERS doesn't publish the table for other ages.2025 actuarial valuation, p. 173 ('KPERS 3 Annuity Factors: Payment Form: 10-year certain and life; Interest Rate: 5.00%')Only one KPERS 3 annuity factor is tied to an age: 13.061217 at 66 (KPERS 3 Plan Design, 2024). The webinar's 12.2625 has no age. The valuation (p. 173) gives the basis (5.00%, life with 10 years certain, blended mortality) but no table.
Questions
How is a KPERS 3 benefit calculated?
Your two account balances are added and divided by an annuity factor. KPERS's example: $340,000 ÷ 12.2625 = $27,727 a year, $2,310.58 a month.
What interest does KPERS 3 pay?
A guaranteed 4% a year, credited quarterly, plus a dividend in years when KPERS's 5-year average return is above 6%. Recent dividends: 2021 3.525%, 2022 0%, 2023 1.875%, 2024 0.675%, 2025 0.975%.
Where do I find my annuity factor?
KPERS doesn't publish a factor table. The only factor it ties to an age is 13.061217 at 66. Your KPERS benefit estimate uses your exact factor.
Source: KPERS Membership Guide: KPERS 1 & 2, Correctional KPERS 1 & 2, Revised 2/26. Also: KPERS 3 Retirement Options (rev. 5/25), PDF pp. 1, 2. Also: KPERS 3 Pre-Retirement Webinar slides, slides 11, 19, 13, 12, 32. Also: KPERS Actuarial Valuation as of Dec. 31, 2025 (July 16, 2026), pp. 152, 153, 2, 173. Also: KPERS 3 Retirement Benefits (9/25), PDF p. 3. Also: KPERS 3 Benefits at a Glance (rev. 1/25), PDF pp. 2, 1. Also: KPERS 3 Retirement Application booklet K3-15 (6/26), pp. 4, 13. Last reviewed .