Summary of Original Version

Amend KRS 61.565 to change the Kentucky Employees Retirement System's (KERS) nonhazardous actuarially accrued liability contribution (unfunded liability payment) that is payable by employers on or after July 1, 2021, from a value that is paid as a percent of pay on each employee to a set dollar amount; provide that the set dollar amount shall be allocated to each individual employer based upon the employer's percent share of the liability as of the June 30, 2019, actuarial valuation and shall be paid by employers in equal installments monthly; provide criteria for when adjustments to the dollar value and percent share may occur; provide that a single amount shall be determined for state agencies in the legislative, executive, and judicial branch who participate in KERS; provide that a KERS employer may charge the cost as a percent of pay for purposes of collecting contributions but shall be responsible to provide the full set dollar amount owed; provide that if a KERS employer merges, splits, separates, or establishes a new agency, the systems shall have full authority to allocate the costs to any employer or entity that results from the split, separation, or establishment of a new agency; amend KRS 61.510 to modify the definition of “level percentage of payroll amortization method” to conform to the amendments in KRS 61.565; amend KRS 212.792 to specify the allocation of retirement costs as provided by the bill in the event an independent health district ceases to exist or has a county to withdraw from the district; provide that the Kentucky Retirement Systems shall amend the actuarial valuation in accordance with the amendments to KRS 61.565 in this Act and provide updated employer contributions to the Governor and General Assembly; APPROPRIATION; EMERGENCY.

Summary of Amendment: House Committee Substitute 1

Summary Retain original provisions except to further amend KRS 61.565 and replace amendments to KRS 212.792 with a new section of KRS Chapter 212 to specify how Kentucky Employees Retirement System (KERS) retirement costs are allocated if a district health department ceased to operate or has a county or counties withdraw from the district; provide that the allocation of KERS costs shall be based upon the withdrawing county's proportion of taxable property in the district health department; require the Dept. for Public Health to provide certification of taxable property to the retirement system; provide that the Kentucky Retirement Systems (KRS) may allocate costs for any district health department who ceases to operate prior to the effective date of the Act. APPROPRIATION. EMERGENCY.

Summary of Amendment: Senate Committee Substitute 1

Summary Retain original provisions; amend KRS 61.565 to establish an appeals process beginning July 1, 2021, with a final determination by December 31, 2021, regarding the assignment of liabilities to each Kentucky Employees Retirement System (KERS) employer and any potential errors in assignment based upon the last participating employer or university employees who are providing services to the state through a contract between the university and the state; amend KRS 61.522 to provide that the discount rate for universities who voluntary cease participating in KERS with the soft freeze option and pay by lump-sum shall be 5.25%; amend KRS 61.675 to provide that if a KERS nonhazardous employer is delinquent for 90 days or more in making the required employer contributions on or after July 1, 2021, the systems: shall not allow future service credit accruals by the employer's employees until such time payments are up to date; may file action in Franklin Circuit Court to collect delinquent employer contributions; and shall notify the Finance & Administration Cabinet who may choose to withhold state appropriations to the employer until such time the contributions are made; create a new section of KRS 61.510 to 61.705 to: require certain quasi-governmental employers participating KERS to report the use of contracted or leased employees to the system and to require the system to report the compiled data annually to the state budget director and the Legislative Research Commission; provide system with authority to audit an employer to verify the use of contracted/leased employees; provide intent language that provides future appropriations to help subsidize retirement costs for these employers based upon process of bringing contracted/leased employees back into KERS; specify factors that may result in loss of subsidy; make technical and clarifying corrections.APPROPRIATION. EMERGENCY.

Summary of Amendment: Senate Floor Amendment 1 -- W. Westerfield

Summary Amend to provide that if quasi-state government agencies in the Kentucky Employees Retirement System (KERS) receive a state subsidy to help pay retirement costs in FY 2021-2022, and the subsidy decreases in future fiscal years, their actuarially accrued liability contribution shall be reduced on a dollar for dollar basis and any resulting reduction shall be paid by the executive branch. APPROPRIATION. EMERGENCY.

Summary of Amendment: Senate Floor Amendment 2 -- W. Westerfield

Summary Amend KRS 61.565 to provide that community mental health centers may appeal retirement costs assigned to them in the bill for situations where the centers have hired employees to provide services to the executive branch via a contract with the executive branch or are contracted to provide services at facilities previously operated by the executive branch. APPROPRIATION. EMERGENCY.

Summary of Amendment: Senate Floor Amendment 3 -- C. McDaniel

Summary Amend KRS 61.565 relative to the appeals process for assigning liabilities to employers: provide that all employers, not just universities, may appeal retirement costs assigned to them in the bill for situations where the employers have hired employees to provide services to the executive branch via a contract with the executive branch or are contracted to provide services at facilities previously operated by the executive branch; provide that costs that shall be paid by the executive branch for these contracted employees shall begin July 1, 2022; require reporting to the Public Pension Oversight Board on the appeals process results; amend new section of KRS Chapter 61 (Section 7) regarding reporting and potential subsidies to certain quasi-state employers in the Kentucky Employees Retirement System (KERS) to adjust list of agencies who are exempt from potential subsidies to help pay retirement costs; provide that subsidies shall be offset by changes occurring in the appeal process in KRS 61.565; make technical amendments; EMERGENCY; APPROPRIATION.

Statutes affected:
Introduced: 212.792
Acts Chapter 83: 61.675
Senate Committee Substitute 1: 61.675