Brief⁽¹⁾

H.B. 2575 amends the law pertaining to school district and community college early retirement incentive programs by eliminating the requirement that these programs be directed toward the purpose of reducing the penalty under the Federal Insurance Contributions Act (FICA) or the Kansas Public Employees Retirement System (KPERS) for retirement prior to age 65.

Background

H.B. 2575 results from a recent Attorney General's Opinion (AGO 99-14) which advised that a school district with an early retirement incentive program have in place a mechanism for establishing the FICA or KPERS "penalty" incurred by an employee who retires before the age 65 normal retirement age. The Attorney General explained that the penalty referred to in the law is the amount of the reduction in the FICA benefit a person who retires at age 62 experiences. A school district exceeds its statutory authority if it confers a benefit to an employee who has not incurred a penalty under FICA or KPERS for retiring early. The Attorney General noted further that an early retirement plan which provides benefits on a sliding scale based solely on the age of participants under which older participants receive less than those who are younger violates the federal Age Discrimination in Employment Act as amended by the federal Older Workers' Benefit Protection Act of 1990.

The amendments contained in H.B. 2575 remove the language which links early retirement incentive programs of school districts and community colleges to "penalties" for early retirement under FICA or KPERS.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html