Summary of Original VersionCreate new sections of KRS 161.220 to 161.716 to specify that new members of the Teachers' Retirement System on or after January 1, 2022, shall receive a foundational benefit component, which shall be a traditional defined benefit plan with risk adjustments, and a supplemental benefit component which shall be a plan based upon the member's account balance; provide that the cost of the foundational benefit for these new members shall be accessed annually in the actuarial valuation; provide that if the funding level of the foundational benefit component for new nonuniversity or university members falls below 90%, the TRS board shall make one or more of the following changes to keep foundational benefit component employer costs within 8% of pay for nonuniversity members and 5.755% of pay for university members: utilize moneys in the stabilization reserve account from any excess contributions above costs of the new plan components for new members only, utilize prospective mandatory employee and employer contributions from the supplemental benefit component, or adjust the regular interest rate, benefit factor, age and service requirements to retire, or COLAs for new members only; establish the supplemental benefit component for new members who enter TRS on or after January 1, 2022, that pays benefits based upon mandatory employee and employer contributions of two percent of pay, voluntary employee and employer contributions, and interest on the accounts equal to the five-year rolling yield on a 30-year Treasury bond; provide for vesting of employer contributions after five years; provide that a new member may take a refund, distribution, or annuitize their supplemental benefit account balance into a monthly payment based upon assumptions established by the TRS board; amend KRS 161.155 to provide that new nonuniversity TRS members on or after January 1, 2022, shall not have any lump-sum sick leave payments added to their foundational benefit component calculation but may have the payment deposited into the supplemental benefit component; repeal, reenact, and amend KRS 161.220 to establish definitions for the new foundational benefit component and supplemental benefit component for new members and make technical amendments to conform to a recent court decision; repeal, reenact, and amend KRS 161.540 to specify employee contribution rates for new TRS members on or after January 1, 2022, which for new nonuniversity members shall be 14.75% of pay with 9% going to fund the foundational benefit component, 2% to fund the supplemental benefit component, and 3.75% to fund retiree health benefits and for new university members shall be 9.775% of pay with 5% going to fund the foundational benefit component, 2% to fund the supplemental benefit component, and 2.775% to fund retiree health benefits; specify level of reduction to retiree health contribution once retiree health fund achieves 100% funding; repeal, reenact, and amend KRS 161.550 to conform language to a recent court decision and specify actual fixed employer rates being paid; provide that the maximum employer contribution rate for new members on or after January 1, 2022, shall be 10.75% for nonuniversity members with 8% going to fund the foundational benefit component, 2% to fund the supplemental benefit component, and 0.75% to fund retiree health benefits and 9.775% for university members with 5.775% going to fund the foundational benefit component, 2% to fund the supplemental benefit component, and 2% to fund retiree health benefits; specify level of reduction to employer retiree health contribution once retiree health fund achieves 100% funding; repeal, reenact, and amend KRS 161.600 to provide that new nonuniversity members on or after January 1, 2022, shall be eligible to retire with no reduction in benefits upon attaining age 65 with 5 years of service, age 60 with 10 years of service, or age 55 with 30 years of service or with a reduced benefit at age 55 with 10 years of service; repeal, reenact, and amend KRS 161.620 to provide that new nonuniversity TRS members shall receive a benefit factor in the foundational benefit of 1.7% up to 2.4% based upon the member's age and years of service and new university TRS members shall receive a benefit factor in the foundational benefit of 0.7% up to 1.4% based upon the member's age and years of service; amend KRS 161.655 to increase the life insurance benefit for new members on or after January 1, 2022, from $2,000 and $5,000 while active and from to $5,000 and $10,000 while retired; amend KRS 161.420 to set up stabilization account for new plans for new TRS members; amend KRS 161.661 to provide that TRS shall determine disability benefits by administrative regulation for new TRS members on or after January 1, 2022; repeal, reenact, and amend or repeal and reenact or amend, or amend KRS 161.400, 161.420, 161.470, 161.480, 161.500, 161.507, 161.515, 161.520, 161.522, 161.525, 161.545, 161.5465, 161.547, 161.548, 161.549, 161.568, 161.580, 161.585, 161.590, 161.595, 161.605, 161.612, 161.615, 161.623, 161.630, 161.661, 161.650, 161.700, and 161.714 to make technical and conforming amendments and to conform to a recent court decision; repeal 161.235; provide that the TRS board shall make recommendations to the Public Pension Oversight Board on how and when to distribute actuarial gains to restore previously reduced benefits in the foundational benefit component or distribute additional contributions to the supplemental benefit component; Sections 1 to 41 effective January 1, 2022.
Summary of Amendment: Senate Committee Substitute 1Summary
Retain original provisions except to: amend KRS 161.600 to increase minimum retirement age for new Teachers' Retirement System (TRS) members who enter the system on or after 1/1/2022 from age 55 to 57; amend KRS 161.220 to extend current statutory anti-pension spiking provisions in last 3 years of employment to last 5 for new TRS members; amend KRS 161.605 to provide that TRS members who retire on after 1/1/2022 and return to work after that date in a TRS eligible position shall not earn benefits in a second retirement account; and amends Sections 1, 2, and 42 to clarify that no retroactive benefit improvements shall be made by the TRS board for new TRS members in the new plan design.
Summary of Amendment: Senate Floor Amendment 1 -- W. SchroderSummary
Retain original provisions except to provide that the prohibition on second retirement accounts shall only apply to new members who enter the system on or after January 1, 2022, who then subsequently retire, and return to work in a position covered by the Teachers' Retirement System.
Statutes affected: Introduced: 161.155, 161.220, 161.540, 161.550, 161.600, 161.620, 161.655, 161.400, 161.420, 161.470, 161.480, 161.500, 161.507, 161.515, 161.520, 161.522, 161.525, 161.545, 161.5465, 161.547, 161.548, 161.549, 161.568, 161.580, 161.585, 161.590, 161.595, 161.605, 161.612, 161.615, 161.623, 161.630, 161.661, 161.650, 161.700, 161.714
Acts Chapter 157: 161.155, 161.220, 161.540, 161.550, 161.600, 161.620, 161.655, 161.400, 161.420, 161.470, 161.480, 161.500, 161.507, 161.515, 161.520, 161.522, 161.525, 161.545, 161.5465, 161.547, 161.548, 161.549, 161.568, 161.580, 161.585, 161.590, 161.595, 161.605, 161.612, 161.615, 161.623, 161.630, 161.661, 161.650, 161.700, 161.714
Senate Committee Substitute 1: 161.155, 161.220, 161.540, 161.550, 161.600, 161.620, 161.655, 161.400, 161.420, 161.470, 161.480, 161.500, 161.507, 161.515, 161.520, 161.522, 161.525, 161.545, 161.5465, 161.547, 161.548, 161.549, 161.568, 161.580, 161.585, 161.590, 161.595, 161.605, 161.612, 161.615, 161.623, 161.630, 161.661, 161.650, 161.700, 161.714
Current: 161.155, 161.220, 161.540, 161.550, 161.600, 161.620, 161.655, 161.400, 161.420, 161.470, 161.480, 161.500, 161.507, 161.515, 161.520, 161.522, 161.525, 161.545, 161.5465, 161.547, 161.548, 161.549, 161.568, 161.580, 161.585, 161.590, 161.595, 161.605, 161.612, 161.615, 161.623, 161.630, 161.661, 161.650, 161.700, 161.714