Signed by Governor Steve Beshear

Vote Smart's Synopsis:

Vote to adopt a conference report and pass a bill that amends the state employee pension program, effective July 1, 2013.

Highlights:

• Establishes the hybrid cash balance plan within the Kentucky Retirement Systems in order to provide retirement benefits based on an individual’s accumulated account balance for any employee who begins working on or after January 1, 2014 (Sec. 8).

• Authorizes individuals participating in the hybrid cash balance plan to retire under the following conditions (Secs. 8 & 9):
• At their normal retirement date if they have earned 5 or more years of service; or
• At any age if the individual works in a hazardous duty position and has earned 25 or more years of service; or
• If the individual does not work in a hazardous duty position, he or she must be at least 57 years old and have an age and years of service total of at least 87 years.

• Requires the annual retirement allowance for a member of the Kentucky Employees Retirement System be calculated by using the individual’s known creditable compensation before their last month of employment and an estimate of their creditable compensation during their last month of employment (Sec. 11).

• Authorizes the General Assembly to amend or suspend the benefits and rights provided to members of the Legislators’, Judicial, State Police, Kentucky Employees, and County Employees Retirement Systems excluding the amount of benefits the individual has accumulated at the time of the amendment or suspension (Secs. 13, 31, 44, 70, & 80).

Full Bill Text

Vote Smart's Synopsis:

Vote to adopt a conference report and pass a bill that amends the state employee pension program, effective July 1, 2013.

Highlights:

• Establishes the hybrid cash balance plan within the Kentucky Retirement Systems in order to provide retirement benefits based on an individual’s accumulated account balance for any employee who begins working on or after January 1, 2014 (Sec. 8).

• Authorizes individuals participating in the hybrid cash balance plan to retire under the following conditions (Secs. 8 & 9):
• At their normal retirement date if they have earned 5 or more years of service; or
• At any age if the individual works in a hazardous duty position and has earned 25 or more years of service; or
• If the individual does not work in a hazardous duty position, he or she must be at least 57 years old and have an age and years of service total of at least 87 years.

• Requires the annual retirement allowance for a member of the Kentucky Employees Retirement System be calculated by using the individual’s known creditable compensation before their last month of employment and an estimate of their creditable compensation during their last month of employment (Sec. 11).

• Authorizes the General Assembly to amend or suspend the benefits and rights provided to members of the Legislators’, Judicial, State Police, Kentucky Employees, and County Employees Retirement Systems excluding the amount of benefits the individual has accumulated at the time of the amendment or suspension (Secs. 13, 31, 44, 70, & 80).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that amends the state employee pension program, effective July 1, 2013.

Highlights:

• Establishes the hybrid cash balance plan within the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System in order to provide a retirement benefit based on the individual’s accumulated account balance (Sec. 2).

• Authorizes an individual who is working in a hazardous duty position to participate in the hybrid cash balance plan to retire under the following conditions (Sec. 2):
• At the individual’s retirement date if he or she has earned 5 or more years of service; or
• At any age if he or she has earned 25 or more years of service.

• Authorizes an individual who is not working in a hazardous duty position under the hybrid cash balance plan to retire under the following conditions (Sec. 3):
• At the individual’s retirement date if he or she has earned 5 or more years of service; or
• If the individual is at least 57 years old and has an age and years of service total of at least 87 years.

• Specifies that the annual retirement allowance for a member of the Kentucky Employees Retirement System will be calculated by using the individual’s known creditable compensation before his or her last month of employment and an estimate of his or her creditable compensation during his or her last month of employment (Sec. 5).

• Authorizes the General Assembly to amend or suspend the benefits and rights provided to members of the State Police Retirement System, the Kentucky Employees Retirement System, or the County Employees Retirement System excluding the amount of benefits the individual has accrued at the time of the amendment or suspension (Secs. 20, 49 & 59).

• Specifies that a retired individuals receiving a pension from any system administered by Kentucky Retirement Systems or from hazardous duty retirement coverage with the County Employees Retirement System and is employed in a regular full-time position after retirement can continue to receive his or her retirement allowance during the period of reemployment under the following conditions (Sec. 43):
• The individual and the participating agency will certify in writing that no prearranged agreement existed between the employee and the agency before the employee’s retirement for the employee to return to work with the participating agency;
• The individual will not contribute to the systems and will not earn additional benefits for any work performed during the period of reemployment; 
• The employer will pay employer contributions on all creditable compensation earned by the individual during the period of reemployment; and
• The employer will be required to reimburse the systems for the cost of the health insurance premium paid by the systems to provide coverage for the retiree.

• Requires a retired individual who is reemployed by an agency participating in any system administered by Kentucky Retirement Systems on or after July 1, 2013 to void his or her retirement (Sec. 43).

• Requires a reemployed retired individual to repay to the retirement system all benefits received if he or she is receiving a retirement allowance or have filed the forms required to receive a retirement allowance from any system administered by Kentucky Retirement (Sec. 43).

• Requires a reemployed retired individual to repay to the retirement system all benefits received if employed in a regular full-time position that is required to participate in any system or employed in a position that is not considered regular full-time with an agency participating in any of the systems 2 years after their retirement date (Sec. 43)

• Requires a reemployed retired individual to contribute to a member account established for them by any system administered by Kentucky Retirement Systems and employer contributes will be paid on behalf of the individual by the participating employer (Sec. 43).

•  Specifies that the reemployed retired individual will be eligible for a retirement allowance based on his or her total service and creditable compensation in addition to his or her previous earning after their initial retirement was voided (Sec. 43).

• Authorizes the beneficiary of an individual to request a refund of the individual’s accumulated contributions if the individual dies on or after their effective retirement date (Sec. 41).

Full Bill Text