Higher Education Retirement

House Bill Number: 
358

House Bill 358 would remove future university employees from the Kentucky Employees Retirement System (KERS) by allowing them to take their employees out of the pension plan through a buy-out and put them in a risky defined contribution plan.

A House committee substitute provides that postsecondary education institutions may voluntarily cease participation in KERS by paying the actuarial costs of ceasing participation. "Postsecondary institutions" are Eastern Kentucky University, Kentucky State University, Morehead State University, Murray State University, Northern Kentucky University, Western Kentucky University, the Kentucky Community Technical College System, and the Kentucky Higher Education Student Loan Corporation.

This bill harm employees’ retirement security, and also cause more underfunding of the plan by removing more employees from the KRS pool. Several university presidents have come out in support of the bill because it would allow them to get out from under increased pension payments. However, it is opposed by the Kentucky Public Pension Coalition.

Bill Sponsor(s): 
Rep. James Tipton + others

HB 358, as amended, passed the House, 76-21, on February 27 (see how House members voted).

A last-minute committee substitute, first made public on March 12 in the Senate State & Local Government Committee, significantly changes HB 358. Read about that here: Pension Bill Breaks Inviolable Contract, Shifts Contributions from Underfunded Plan. The committee approved the bill, and it passed the Senate, 25-12, on March 13 (see how senators voted).

On March 14 the House voted not to concur with the Senate changes. The Senate must decide whether or not to withdraw its changes. If it does not a conference committee likely will be appointed.

KFTC's Position: 
KFTC Opposes