1. K-State home
  2. »Human Capital Services
  3. »Benefits
  4. »Retirement
  5. »Voluntary Separation Incentive Program
  6. »Voluntary Separation Incentive Program

Human Capital Services

VSIP Participant Benefits

We are pleased to provide the following general information about retirement and other benefits pertinent to Voluntary Separation Incentive Program (VSIP) participants. 

In early spring, HCS-Benefits will provide personalized guidance to ensure that any benefits information provided is as accurate and current as possible. That communication will contain information about retiree health insurance options, estimated sick and/or vacation leave payouts, and KSU-specific retirement benefits.

Kansas Board of Regents (KBOR) 403(b) plan participants

Participants should contact their TIAA and/or Voya representatives to request income illustrations which will show distribution options and estimated retirement dollars. Currently, income from your Kansas Board of Regents tax sheltered 403(b) retirement contracts is subject to federal income tax but is not generally subject to Kansas state income tax for Kansas residents. The Kansas income tax exemption is subject to change by legislative action. Your TIAA or Voya representative or tax adviser can provide additional information, including taxation concerns. Please note HCS-Benefits cannot provide tax, investment, or financial advice.

Voluntary retirement plan participants

If you participated in the Kansas Board of Regents voluntary 403(b) plan and/or the State of Kansas Deferred Compensation 457 plan, please contact your provider representative to request income illustrations which will show distribution options and estimated retirement dollars. Currently, income you receive from your Kansas Board of Regents tax sheltered 403(b) retirement contracts is subject to Federal income tax but is not generally subject to Kansas state income tax for Kansas residents. This State of Kansas income tax exemption is subject to change by legislative action. Your retirement or tax advisor may provide additional information including regarding taxation concerns. Please note HCS-Benefits cannot provide tax, investment, or financial advice.

Lump sum and/or leave payouts and retirement plans

You can elect to direct some of your sick and/or annual leave payout into a voluntary savings plan subject to annual contribution limits established by the IRS. The VSIP lump sum payment amount will not be included in the calculation of mandatory retirement contributions and will not be included for voluntary retirement plan contributions. If you have questions regarding contribution limits, or to have a portion of your payment directed to voluntary savings plans, please consult the HCS-Benefits at benefits@ksu.edu.

Health insurance

Retirees of any age (and their covered dependents) can continue coverage under the State of Kansas group health insurance plan. Those on 9-month contracts will retire effective May 14, 2022 and those on 12-month contracts will retire effective June 11, 2022. Your active employee health insurance coverage will end on the final day of May of June, depending on the type of contract.  

In order to enroll in the retiree health plan, you must have continuous coverage from active employment into retirement. Meaning, you cannot drop out of the medical insurance plan at retirement and rejoin it later. Retirees also have the option to drop dental coverage; however, once dropped, coverage cannot be reinstated.

Retirees and/or covered dependents who are under age 65 can enroll in COBRA continuation coverage for a maximum of 18 months or until age 65, whichever occurs first.  COBRA coverage is the same coverage available to active employees, but the entire premium is paid by the individual. COBRA premiums are often less expensive than retiree premiums, although coverage terminates after no more than18 months. 2022 rates will be available by October 2021 and posted on the State Employee Health Plan (SEHP) website

VSIP participants and/or covered dependents who are age 65 or older will need to enroll in Medicare Part B effective the first of the month after employer coverage ends. HCS-Benefits will complete the required form for the participant to provide to the Social Security Administration allowing enrollment in Part B without penalty. Medicare-eligible retirees and/or covered dependents will have additional health plan coverage options including SEHP plans designed to supplement Medicare Parts A and B. For more information, the SEHP calendar year 2022 retiree brochure will soon be available on the SEHP website.

Limited Health Care Bridge

As part of the VSIP retirees may elect to enter into a Limited Health Care Bridge (LHCB) agreement with the University. Under an LHCB, K-State funds the full cost of a retiree’s health care for up to three years or until age 65, whichever occurs first. The State of Kansas will bill K-State directly to collect these premiums. As a result, throughout the term of the LHCB, plans and coverage levels must mirror an employee’s enrollment(s) in effect  upon their retirement. Total projected premiums will be deducted from the VSIP lump-sum payment. Additional information is available on the HCS-Benefits website. Please contact HCS-Benefits at benefits@ksu.edu with any questions, including to request a cost estimate. Due to processing timelines and required documentation, please inform HCS-Benefits by January 31, 2022 if you intend to request an LHCB as part of the VSIP offer.

Healthcare flexible spending account (FSA)

SEHP guidance states: “Employees that terminate coverage have 90 days after the contributions end or employment is terminated to pay out claims that were incurred while coverage was active.”

Dependent care flexible spending account

SEHP guidance states: “Employees that terminate coverage have 90 days after the contributions end or employment is terminated to pay out claims that were incurred while coverage was active.”

Health savings account (HSA)

If you enrolled in a Health Savings Account, the funds in that account are yours to keep. If you are Medicare-eligible and you have a Health Savings Account and you will be retiring in 2022, we will need to inform the SEHP as quickly as possible as you will have to be switched to a Health Reimbursement Account under Medicare’s rules. If you have questions, please contact the Benefits Office by e-mail at benefits@ksu.edu.

Health reimbursement account

Your HRA will terminate effective your final day of employment and you will have 60 days from that date to submit any claims incurred while covered.

Voluntary Life insurance plans

If you are enrolled in Voluntary Insurance plans, either through TEA (The Hartford) or KPERS (The Standard), you will be able to continue that coverage in retirement. We will notify the carriers upon your retirement, and they will contact you regarding portability, coverage options, and cost.

Group life insurance coverage

While actively employed, KSU pays for life insurance coverage equal to 150% of your annual salary which  ends on your last day in pay status. Retirees may  elect to continue life insurance coverage by returning a completed election form with payment to the carrier (The Standard) within 60 days from your retirement date.

TEA participants are encouraged to contact The Hartford directly to get a quote and additional information for conversion: https://www.thehartford.com/.

HCS-Benefits can provide employees with the applications to convert or port their life insurance with KPERS. In addition, These forms can be accessed on the KPERS website: https://www.kpers.org/leaving.html

Leave payouts

Your accrued sick and/or vacation leave balances are available in HRIS. Your last paycheck will include compensation and any accrued leave payout based on the following eligibility criteria:

Sick leave

Sick leave will be paid at retirement, based upon years of service and accumulation as follows:

Years of ServiceHours AccumulatedHours Paid
8800240
151,000360
251,200480

Examples:

  • If you have 15 years of service and 1,300 hours accumulated, you will be paid for 360 hours
  • If you have 25 years of service and 900 hours accumulated, you will be paid for 240 hours.

Vacation leave: faculty in 12-month positions and staff

A maximum of 240 hours of annual leave will be paid at retirement.

Additional information about KSU retirement benefits

Visit the Retiring from the University, Benefit Information for Separating Employees, and K-State Retirement Benefits websites for information about benefits KSU provides to retirees as well as retiree rehire provisions and other important information.

 


Voluntary Separation Incentive ProgramVSIP ProcessVSIP FormsVSIP FAQs