A bill that would reform the Kentucky Teachers’ Retirement System (KTRS) to change the plans for new teachers at the state’s regional universities passed through the state House with a 65-31 vote on Wednesday.
Rep. James Allen Tipton, the sponsor of House Bill 613, said the universities have been working with KTRS over the last year to craft a plan that would address the growing employer costs for pension costs while ensuring continued pension benefits.
The bill would only change the plan for newly-hired employees into the system (it would have no impact on current employees or system) and would put them in a modified defined contribution plan.
Tipton said the new plan would include a foundational and a supplemental plan that both employers and employees would contribute to. The overall contribution rates would be 9.7 percent for employees which would include portions going to the foundational plan, supplemental plan, and health benefits and the employer contribution rate would be 10.75 percent. Employees in the plan would also receive the 1.5 percent cost of living adjustment given to other KTRS employees.
He noted employer contribution rates have grown substantially in recent years and this bill would address that issue for the future by shifting risk from the taxpayers and give the pension system more control over the funding levels with built in risk control measures the KTRS Board could use to ensure the plan does not fall below 90 percent funded.
House Bill 613 now moves to the Senate for consideration in committee.