Pension Update Message - July 22, 2019
Dear Faculty and Staff Colleagues,
Several months ago, we communicated with you about the urgent need for legislative action regarding rising employer contribution rates to the Kentucky Employees’ Retirement System (KERS). As we anticipate the results of the special session, there are new developments of note.
Governor Matt Bevin called an extraordinary session of the Kentucky General Assembly to begin on Friday, July 19. The objective of this session is narrow in scope and intended solely to address the participation of regional universities and quasi-governmental agencies in KERS. The House Committee on State and Local Government heard three bills in committee this past Saturday, passing House Bill 1 out of committee for consideration by the full House. House Bills 2 and 3 received a hearing with both failing to pass out of the committee.
House Bill 1 empowers governing boards of quasi-governmental agencies and regional universities to choose one of five options concerning continued participation in KERS.
The first option is to continue KERS participation with no changes. Under this option, EKU’s employer contribution rate will increase to nearly 84% for the current fiscal year – up from 49.47% – with the understanding this rate is likely to continue increasing in future years.
Two additional options authorized in House Bill 1 would freeze KERS pension accounts for all existing employees, with future retirement contributions going to a University-sponsored defined contribution account. Earned pension credit would not be forfeited, but KERS employees will no longer contribute to or continue earning service credit in KERS.
The final two options authorized in House Bill 1 permit all current tier I and tier II KERS employees to remain in the system and continue earning service credit. All tier III employees would be moved to the University-sponsored defined contribution plan.
The full House will consider House Bill 1 on Monday. KET will provide live coverage here beginning at 10:00 a.m. If this legislation passes the House, it then moves to the Senate.
EKU’s government relations team will continue to monitor the special session. We will keep you updated as new developments arise. If you would like to read the pending legislation, you can do so at the following link: