KCPERS has three sources of funding for benefits.
- Sixty-seven percent is from Investment Returns
- Twenty-four percent is from Employer Contributions
- Nine percent is from Employee Contributions
Investment Returns
The contributions from the employees and City are invested by the Retirement Board to help fund members' retirement benefits. While investment returns fluctuate from year to year, investment income is KCPERS most significant funding source.
KCPERS current return assumptions are 7.25% in the Police plan and 7.10% in the Civilian plan. Over the past few years the Retirement Board has been lowering the investment return assumptions to more closely reflect expected market returns.
KCPERS overall objective is to achieve the highest level of investment performance that is compatible with its risk tolerance and prudent investment practices. The Retirement Board maintains a long-term perspective in formulating and implementing its investment policy, and in evaluating investment performance.
Employer Contributions
Contribution Rates are based on actuarial assumptions and costs methods and are determined by the Retirement Systems actuary. The City of Kansas City, Missouri currently contributes the actuarial amounts required to pay for one year of service for all active employees (the normal cost) and an amount to pay the amortized portion of the unfunded liability for that year. For the current fiscal year the City is contributing $35.2 million for the Police plan and $6.4 for the Civilian Employees' plan.
Employee Contributions
All members contribute a percentage of their base pay. The member contribution rate is 11.55% for the Police plan and 5% for the Civilian Employees' plan.
Member contributions are made through payroll deduction on a pre-tax basis and paid into the Retirement System by the Board of Police Commissioners each pay period.