Kentucky

Overview

• Kentucky Employees Retirement System
• County Employees Retirement System
• State Police Retirement System
• Insurance Fund

Plan Design

State and local government employees hired before January 1, 2014 participate in a defined benefit plan. Those hired on or after that date participate in a cash balance plan.

Teachers hired before January 1, 2023 participate in a defined benefit plan. Those hired on or after that date participate in a hybrid plan composed of a defined benefit plan and a cash balance plan. 

According to the US Government Accountability Office, 67 percent of employees of state and local government in Kentucky participate in Social Security.

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Authorizing Statutes and Board Structure

KY Rev Stat § 61.505 establishes the Kentucky Public Pensions Authority and specifies that the KPPA is overseen by an eight member board of trustees.

KY Rev Stat § 161.230 establishes the Kentucky Teachers’ Retirement System. KY Rev Stat § 161.250 establishes the Board of Trustees, which consists of nine members. 

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

KPPA
KY Rev Stat § 61.650 states:

A trustee, officer, employee, employee of the Kentucky Public Pensions Authority, investment manager, or other fiduciary, or proxy adviser shall discharge duties with respect to the retirement system:
a. Solely in the interest of the members and beneficiaries;
b. For the exclusive purpose of providing benefits to members and beneficiaries and paying reasonable expenses of administering the system;
c. With the  care,  skill,  and  caution  under  the  circumstances  then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose;
d. Impartially, taking into account any differing interests of members and beneficiaries;
e. Incurring any costs that are appropriate and reasonable; and
f. In accordance with a good-faith interpretation of the federal, state, and common law governing the system and fiduciaries.

KY TRS
KY Rev Stat § 161.430(b) states:

The board members, investment  managers, investment consultants, or other fiduciaries, and proxy advisers shall discharge their duties with respect to the assets of the system solely in the interests of the active contributing members and annuitants and:

1. For the exclusive purpose of providing benefits to members and annuitants and defraying reasonable expenses of administering  the system;
2. With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like  capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims;
3. By diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly  prudent not to do so; and
4. In accordance with the federal, state, and common laws, administrative regulations, and other instruments governing the system and fiduciaries

Legal Protections of Retirement Benefits

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

See also the following search tools:

More Data

• Public Fund Survey Summary of Findings
• Roll Call (NASRA members-only)