National Association of State Retirement Administrators

Kentucky

Major public retirement systems in Kentucky include the Kentucky Retirement System (KRS) and the Kentucky Teachers Retirement System.

KRS administers pension and other benefits to nearly all public employees in the state excluding school teachers. The system includes four plans:

  • Kentucky Employee Retirement System

  • County Employees Retirement System

  • State Police Retirement System

  • Insurance Fund

The Kentucky Teachers Retirement System administers pension and other benefits to certified employees of school districts, state universities and community colleges, and other public educational agencies.

Authorizing Statutes

Chapter 61 of the Kentucky Revised Statutes establishes the Kentucky Retirement System.

There is hereby created and established: (1) A retirement system for employees to be known as the "Kentucky Employees Retirement System" by and in which name it shall, pursuant to the provisions of KRS 61.510 to 61.705, transact all its business and shall have the powers and privileges of a corporation; and (2) A fund, called the "Kentucky Employees Retirement Fund," which shall consist of all the assets of the system as set forth in KRS 61.570 to 61.585. All assets received in the fund shall be deemed trust funds to be held and applied solely as provided in KRS 61.510 to 61.705.

61.645 establishes the Board of Trustees, which consists of

  • The secretary of the Personnel Cabinet shall serve as trustee for as long as he occupies the position of secretary under KRS 18A.015, except as provided under subsections (5) and (6) of this section;

  • Two (2) trustees, who shall be members or retired from the County Employees Retirement System, elected by the members and retired members of the County Employees Retirement System;

  • One (1) trustee, who shall be a member or retired from the State Police Retirement System, elected by the members and retired members of the State Police Retirement System;

  • Two (2) trustees, who shall be members or retired from the Kentucky Employees Retirement System, elected by the members and retired members of the Kentucky Employees Retirement System; and

  • Three (3) trustees, appointed by the Governor of the Commonwealth. Of the three (3) trustees appointed by the Governor: One (1) trustee shall be knowledgeable about the impact of pension requirements on local governments; and Two (2) trustees shall have investment experience.

Kentucky Teachers Retirement System

Chapter 161 of the Kentucky Revised Statutes establishes the Kentucky Teachers Retirement System.

The Teachers' Retirement System is established as of July 1, 1940, for the purpose of providing retirement allowances for teachers, their beneficiaries, and survivors under the provisions of KRS 161.155 and 161.220 to 161.714. The Teachers' Retirement System of the State of Kentucky shall be an independent agency and instrumentality of the Commonwealth and this status shall only be amended or changed by the General Assembly. It shall have the powers and the privileges of a corporation and shall be known as the "Teachers' Retirement System of the State of Kentucky." Its business shall be transacted, its funds invested, and its cash and securities held in that name, or in the name of its nominee provided that its nominee is authorized by board of trustees' resolution solely for the purpose of facilitating the transfer of securities. The board of trustees may designate a nominee as provided in KRS 286.3-225; or it may name as nominee a partnership composed of selected trustees and employees of the system, and formed for the sole purpose of holding legal or registered title of such securities, and for the transfer of securities in accordance with directions of the board of trustees.

161.250 establishes the Board of Trustees, which consists of

  • The chief state school officer;

  • The State Treasurer;

  • Four (4) elective trustees who are members of the retirement system, to be known as teacher trustees;

  • Two (2) elective trustees who are not members of the teaching profession;

  • One (1) elective trustee who is an annuitant of the retirement system.

Board Composition

Plan

Board Size

Appointed

Elected

Plan Members

Ex Officio

Kentucky Retirement Systems

9

3

5

5

1

Kentucky Teachers Retirement System

9

0

7

5

2

Contributions

Per the U.S. Census, in FY 2014, employer contributions to Kentucky state and local government pension plans were 4.15 percent of all state and local government direct general spending.

Constitutional Protections

Section 61.692, KY ST, recognizes that public pension rights in the state retirement system constitute an "inviolable contract" and that benefits shall not be subject to reduction or impairment by alteration, amendment, or repeal. Jones v. Board of Trustees of Kentucky Retirement Systems, 910 S.W.2d 710 (Ky. 1995)(recognizing inviolable contract between KERS members and state). Section 19 of the Kentucky Constitution provides partial protection against impairment of contract. (KY ST §61.692 provides statutory protection; KY CONST., §19) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits

Flag of Kentucky (March 26, 1918)

Population (2016) 4,436,974

Kentucky public pension statistics, per U.S. Census Bureau as of FY 2016 ($ in 000s)

Assets

$28,514,597

Active Members

209,401

Annuitants

156,894

Benefits Paid

$3,833,078

Employee Contributions

$632,865

Employer Contributions

$1,576,796

Systems

32

More Data