Signed by Governor Matt Bevin

Vote Smart's Synopsis:

Vote to pass a bill that establishes a state of emergency for the Kentucky Employees Retirement System.

Highlights:

• Authorizes local and district health departments, state-supported universities and community colleges, and the Kentucky Higher Education Student Loan Corporation to voluntarily cease participation in the Kentucky Employee Retirement System (KERS) (Sec. 1).

• Authorizes any employer participating in the KERS or the County Employees Retirement System on July 1, 2015, to request an estimate of the cost of voluntarily ceasing participation in the system prior to officially making a request to cease participation (Sec. 1).

• Specifies that for those KERS non-hazardous employers who are considering participating under provisions of this act on June 20, 2020, the request for an estimate to voluntary cease participating must be made prior to December 21, 2019, and the estimate must be provided to that employer within 60 days of the request (Sec. 1).

• Requires any KERS employers ceasing to participate who elect to pay their actuarial costs by a lump sum will make the full lump-sum payment by June 30, 2021, equal to a rate of 5.25 percent per annum for pension costs and at a rate of 6.25 percent per annum for retiree health costs until the lump-sum payment is made (Sec. 1).

• Specifies that if the ceasing employer fails to make the full lump-sum payment by June 30, 2021, the ceasing employer must make installment payments and will have the costs recalculated in order to make up any missed payments (Sec. 1).

• Requires an employer who voluntarily ceases participation in the KERS elects to pay off the costs of ceasing participation by installment payments and is subsequently delinquent in making those payments for 90 days or more (Sec. 2):

• Employees of the employer who are continuing to participate in the system after the employer’s effective cessation date will not accrue any additional service credit or benefits in the system through the ceasing employer until such time the employer has satisfied the required installment payments to the system;

• The board may file in the Franklin Circuit Court to collect any delinquent installment payments owed by the employer and to attach so much of the general fund appropriations of the delinquent employer as is necessary to achieve full compliance with the provisions of this act; and 

• The system will notify the Finance and Administration Cabinet who may withhold or intercept from the ceasing employer a sufficient portion of any appropriated state funds not yet disbursed to the ceasing employer to satisfy the required installment payments to the system. 

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes a state of emergency for the Kentucky Employees Retirement System.

Highlights:

• Authorizes local and district health departments, state-supported universities and community colleges, and the Kentucky Higher Education Student Loan Corporation to voluntarily cease participation in the Kentucky Employee Retirement System (KERS) (Sec. 1).

• Authorizes any employer participating in the KERS or the County Employees Retirement System on July 1, 2015, to request an estimate of the cost of voluntarily ceasing participation in the system prior to officially making a request to cease participation (Sec. 1).

• Specifies that for those KERS non-hazardous employers who are considering participating under provisions of this act on June 20, 2020, the request for an estimate to voluntary cease participating must be made prior to December 21, 2019, and the estimate must be provided to that employer within 60 days of the request (Sec. 1).

• Requires any KERS employers ceasing to participate who elect to pay their actuarial costs by a lump sum will make the full lump-sum payment by June 30, 2021, equal to a rate of 5.25 percent per annum for pension costs and at a rate of 6.25 percent per annum for retiree health costs until the lump-sum payment is made (Sec. 1).

• Specifies that if the ceasing employer fails to make the full lump-sum payment by June 30, 2021, the ceasing employer must make installment payments and will have the costs recalculated in order to make up any missed payments (Sec. 1).

• Requires an employer who voluntarily ceases participation in the KERS elects to pay off the costs of ceasing participation by installment payments and is subsequently delinquent in making those payments for 90 days or more (Sec. 2):

• Employees of the employer who are continuing to participate in the system after the employer’s effective cessation date will not accrue any additional service credit or benefits in the system through the ceasing employer until such time the employer has satisfied the required installment payments to the system;

• The board may file in the Franklin Circuit Court to collect any delinquent installment payments owed by the employer and to attach so much of the general fund appropriations of the delinquent employer as is necessary to achieve full compliance with the provisions of this act; and 

• The system will notify the Finance and Administration Cabinet who may withhold or intercept from the ceasing employer a sufficient portion of any appropriated state funds not yet disbursed to the ceasing employer to satisfy the required installment payments to the system. 

Full Bill Text