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KYRetirement Systems

Plan Information FAQ's

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  1. What is "Kentucky Retirement Systems"?
  2. Who administers KRS?
  3. What type of retirement plan is my KRS retirement account?
  4. How does a "defined benefit" plan work?
  5. How are KRS benefits funded?
  6. How much do employees contribute to the retirement systems?
  7. How much does my employer contribute to the retirement systems?
  8. Who is required to participate in the retirement systems?

  1. What is "Kentucky Retirement Systems"?
    The Commonwealth of Kentucky provides retirement benefits for state and county employees through the Kentucky Retirement Systems (KRS). KRS consists of the Kentucky Employees Retirement System (KERS), County Employees Retirement System (CERS), and State Police Retirement System (SPRS). State employees, employees of local health departments, eligible employees of regional state universities, and other agencies qualified under state law participate in KERS. Employees of city, county, and local municipalities, along with classified employees of local school boards, participate in CERS. Participants of SPRS consist of all state police officers.
  2. Who administers KRS?
    A nine-member Board of Trustees administers Kentucky Retirement Systems (KRS). The members of the retirement systems elect five (5) Board Members, three (3) are appointed by the Governor, and one (1) is the Secretary of the Personnel Cabinet (who is also appointed by the Governor).

    See also: Board of Trustees.
  3. What type of retirement plan is my KRS retirement account?
    The retirement plans administered by KRS are qualified public defined benefit plans and were established under Section 401a of the Internal Revenue Code (IRC).
  4. How does a "defined benefit" plan work?
    A defined benefit plan pays benefits based upon a formula, rather than on an account balance. The formula used to compute KRS benefits provides participating members with a guaranteed lifetime payment at retirement based on the number of years of service, your average salary and a multiplying factor.

    This is in contrast to a defined contribution plan, such as the 401(k) plan. The amount you have in a 401(k) is the total value of the account. Under a defined contribution plan, you are responsible for ensuring that the amount at the time of retirement is enough to meet your financial needs over your lifetime.
  5. How are KRS benefits funded?
    Kentucky Retirement Systems benefits are funded through three sources: employee contributions deducted from an employee's creditable compensation, employer contributions paid by each state and county agency participating in the retirement systems, and return on investments.
  6. How much do employees contribute to the retirement systems?
    Non-hazardous employees who are eligible to participate in the retirement systems contribute 5% of creditable compensation. Employees eligible to participate in the retirement systems who are working in a hazardous duty position approved by the KRS Board of Trustees contribute 8% of total creditable compensation.

    Note: Individual agencies must petition the KRS Board of Trustees to approve certain positions for hazardous duty coverage. The Board will determine if the position meets the definition of "hazardous" as provided by Kentucky Revised Statute 61.592.
  7. How much does my employer contribute to the retirement systems?
    The most recent actuarial valuation was performed June 30, 2005, and the following employer rates effective July 1, 2006, have been recommended and adopted as a result of the actuarial valuation and actions of the 2006 Regular Session of the General Assembly:

    The employer contribution rates for the 2006-2007 fiscal year are as follows:
    Employer Employer Rates for the 2006-2007 Fiscal Year
    KERS (non-hazardous employers)* 7.75%1
    KERS (hazardous employers) 22.00%1
    CERS (non-hazardous employers) 13.19%1
    CERS (hazardous employers) 28.21%1
    SPRS 25.50%1

    1House Bill 380 passed during the 2006 Regular Session of the General Assembly reduced the employer contribution rate from the amount recommended by the Board and its' consulting actuary. The actuarially recommended rates effective July 1, 2006 were 17.13% for KERS non-hazardous employers, 23.32% for KERS hazardous employers, and 42.30% for SPRS employers.
  8. Who is required to participate in the retirement systems?
    Employees who work in a regular full time position for a participating agency must be enrolled in the retirement system at the beginning of their employment. A regular full-time position is defined as positions that average 100 hours of work per month over a fiscal or calendar year, excluding the classifications of temporary, seasonal, and interim. For school board employees, a regular full-time position is defined as positions that requires the employee to average 80 hours of work per month over the actual days worked during the school year.

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