PROPOSED PLAN FOR KERS & CERS  NONHAZARDOUS  MEMBERS: EFFECTIVE 9/1/2008 FOR NEW HIRES

RETIREMENT PROVISION

CURRENT  PLAN

FOR NEW HIRES

 HB 600: AS PASSED

BY THE HOUSE

 HB 622: SENATE

COMMITTEE SUBSTITUTE

PROPOSED

LEGISLATIVE AGREEMENT

1.     Employee Contribution

5% to pension (refundable w/int.)

5% to defined benefit pension (refundable w/int.)

1% to health (non-refundable)

6% total

4% to defined benefit pension (refundable w/int.)

1% to supplemental defined benefit pension (refundable w/int.)

1% to health (non-refundable)

6% total

5% to defined benefit pension (refundable w/int.)

1% to health (non-refundable)

6% total

2.     Final Compensation

·     Average of the highest 5 fiscal years, must contain 48 months.

·     Includes lump-sum compensatory payments at retirement

·     Average of the highest 5 fiscal years, must contain 60 months.

·     lump-sum comp. payments at retirement not included

·     Average of the 60 months of service prior to retirement.

·     lump-sum comp. payments at retirement not included

·          Average of the last 5 full fiscal years prior to retirement, must contain 60 months.

·          All lump-sum comp. payments before and at retirement not included for retirement calculations.

3.     Benefit factor

·     KERS:  1.97%

·     CERS:  2.00%

KERS & CERS

KERS & CERS

KERS & CERS

Yrs. Service At  Retirement

Benefit Factor

Yrs. Service At  Retirement

Base Benefit

Factor

Supp. Benefit

Factor

Total Factor

Yrs. Service At  Retirement

Benefit Factor

10 or less

1.10%

Up to 30 years

1.15%

0.60%

1.75%

10 or less

1.10%

Greater than 10, but no more than 20

1.30%

Additional years above 30

1.30%

0.60%

1.90%

Greater than 10, but no more than 20

1.30%

Greater than 20, but no more than 26

1.50%

The benefit factor remains constant for the service credit tier. Inviolable contract applies to base benefit factor only.

Greater than 20, but no more than 26

1.50%

Greater than 26, but no more than 30

1.75%

Greater than 26, but no more than 30

1.75%

Additional years above 30

2.00%

Additional years above 30

2.00%

As a member reaches the specific service level, the benefit factor increases for all service credit except that the 2.00% multiplier only applies to service earned in excess of 30 years. Inviolable contract applies to total benefit factor.

As a member reaches the specific service level, the benefit factor increases for all service credit except that the 2.00% multiplier only applies to service earned in excess of 30 years. Inviolable contract applies to total benefit factor.

4.     When Can They Retire: Unreduced Benefit

·     Any age/ w 27 years of service or

·     Age 65 w/4 years of service

·     Rule of 85: Age + service must equal 85 years at retirement except that the employee must be at least 55 years of age to retire under this provision; or 

·     Age 65 w/5 years of service

·     Rule of 87: Age + service must equal 87 years at retirement except that the employee must be at least 57 years of age to retire under this provision; or 

·     Age 65 w/5 years of service.

·          Rule of 87: Age + service must equal 87 years at retirement except that the employee must be at least 57 years of age to retire under this provision; or 

·          Age 65 w/5 years of service.

5.     When Can They Retire: Reduced Benefit

·     Any age w/25 years of service or

·     Age 55 w/5 years of service

·     Age 55 w/10 years of service

·     Age 62 w/10 years of service

·          Age 60 w/10 years of service

6.     Penalty on Reduced Benefit

Amount determined by actuary

Amount determined by actuary +1%

Amount determined by actuary

Amount determined by actuary

PROPOSED PLAN FOR KERS & CERS  NONHAZARDOUS  MEMBERS: EFFECTIVE 9/1/2008 FOR NEW HIRES

RETIREMENT PROVISION

CURRENT  PLAN

FOR NEW HIRES

 HB 600: AS PASSED

BY THE HOUSE

 HB 622: SENATE

COMMITTEE SUBSTITUTE

PROPOSED

LEGISLATIVE AGREEMENT

7.     Medical Insurance

for new hires after 07/03:

·          10 years of earned service at retirement to be eligible for insurance benefits.

·          Benefit of $10 per month for each year of earned service without regard to a maximum dollar amount; adjusted by CPI annually.

for new hires after 07/08:

·          Same except increase earned service requirement to be eligible for benefits to 15 years and adjust benefit annually by 1.5% instead of CPI-U.

for new hires after 07/08:

·          Same as current plan except require the employee to be age 65 w/15 years of service or age 60 w/20 years of service and adjust by 1.5% instead of CPI-U.

·          If the employee retires with the level of service credit required but has not reached the age requirement, the employee will be able to purchase coverage through the systems at full cost until reaching the age requirement.

·          Reemployed retiree required to take coverage through employer.

for new hires after 09/08:

·          Medical Insurance Eligibility:

­      Individual qualifies for a retirement benefit under the Rule of 87; or at

­      Age 60 w/15 years service.

·          Benefit of $10 per month for each year of earned service without regard to maximum dollar amount; adjusted by 1.5% annually.

·          Reemployed retiree is required to take coverage through the new employer.

8.     Sick Leave at Retirement

·       KERS: Unlimited amount used toward determining retirement benefits, does not count towards eligibility.

·       CERS: Optional for employer and employer chooses level.

·          Limit to 12 months for purposes of determining monthly benefits.

·          Same as House Plan but all costs paid by last participating employer.

·          Limit to 12 months for purposes of determining monthly benefits. Effective July 1, 2010, require the last participating employer to pay the full cost of the sick leave.

9.     Cost of living Adjustment

·       Annual increase not to exceed 5% based on the percent change in CPI; may be suspended by Legislature.

·       Annual increase of 1.5%; may be suspended by Legislature.

·       General Assembly may provide additional COLA in excess of 1.5% in the future.

·       Same as House Plan

·       Annual increase of 1.5%; may be suspended by Legislature.

·       General Assembly may provide additional COLA in excess of 1.5% in the future.

10.  Distribution of funds before retirement

·       Employee contribution plus interest at rate determined by the board.

·       Employee contribution plus interest at rate of 2.5%

·       Same as House Plan

·       Employee contribution plus interest at rate of 2.5%

11.  Service purchases

·       100% of actuarial cost as determined by the board.

·       In most cases, does not count towards retirement eligibility.

·       Ensure the actuarial cost includes COLA and earliest eligible retirement date.

·       Tightens provisions to ensure no service purchases count towards retirement eligibility.

·       Same as House Plan.

·       Ensure the actuarial cost includes COLA and earliest eligible retirement date.

·       Tightens provisions to ensure no service purchases count towards retirement eligibility.

PROPOSED PLAN FOR KERS & CERS HAZARDOUS MEMBERS AND SPRS: EFFECTIVE 9/1/2008 FOR NEW HIRES

RETIREMENT PROVISION

CURRENT  PLAN

FOR NEW HIRES

 HB 600: AS PASSED

BY THE HOUSE

 HB 622: SENATE

COMMITTEE SUBSTITUTE

PROPOSED

LEGISLATIVE AGREEMENT

12.  Who is Hazardous?

·     Defined by KRS 61.592

·     No change for KERS hazardous.

·     Amend KRS 61.592 to limit hazardous duty coverage for CERS employees to specific police officers, firefighters, paramedics and EMTs.

·     Same as House plan except includes language specifically mentioning correctional officers as being covered by hazardous duty.

·     No change for KERS hazardous.

·     Amend KRS 61.592 to limit hazardous duty coverage for CERS employees to specific police officers, firefighters, correctional officers, paramedics and EMTs.

13.  Employee Contribution

8% to pension (refundable w/int.)

8% to defined benefit pension (refundable w/int.)

1% to health (non-refundable)

9% total

7% to defined benefit pension (refundable w/int.)

1% to supplemental defined benefit pension (refundable w/int.)

1% to health (non-refundable)

9% total

8% to defined benefit pension (refundable w/int.)

1% to health (non-refundable)

9% total

14.  Final Compensation

·     Average of the highest 3 fiscal years, must contain 24 months.

·     Includes lump-sum comp. time payments at retirement

·     Average of the highest 3 fiscal years, must contain 36 months.

·     lump-sum comp. payments at retirement not included

·     Average of the 36 months of service prior to retirement

·     lump-sum comp. payments at retirement not included

·     Average of the highest 3 full fiscal years, must contain 36 months.

·     All lump-sum comp. payments before and at retirement not included for retirement calculations.

15.  Benefit factor

·     KERS:  2.49%

·     CERS:  2.50%

·     SPRS:  2.50%

 All KRS

 All KRS

 All KRS

Yrs. Service

At  Retirement

Benefit Factor

Factor

Benefit Factor

Yrs. Service

At  Retirement

Benefit Factor

10 or less

1.30%

Base Benefit Factor

1.60%

10 or less

1.30%

Greater than 10, but no more than 20