2023 Regular Session
The 2023 Regular Session of the Kentucky General Assembly adjourned on Thursday, March 30, 2023. KPPA tracked a total of 63 bills and resolutions that might have affected the systems we operate, and we submitted 17 Actuarial Analysis letters at the request of the Legislative Research Commission.
Click here for a complete summary of bills and resolutions passed in the 2023 Regular Session and their expected impact on KPPA or the Systems administered by KPPA.
Bills of Direct Interest to Our Members and Retirees
House Bill 506: Establish a Partial Lump Sum Option (PLSO) for retirees and reduce required break for employment after retirement.
House Bill 506 establishes a Partial Lump Sum Option (PLSO), with and without survivor rights, as a payment option for retiring members of the County Employees Retirement System (CERS), Kentucky Employees Retirement System (KERS), or State Police Retirement System (SPRS).
State law previously offered a PLSO to members who retired on or before January 1, 2009. For retirement dates effective January 1, 2024 and after, members will again be allowed to choose a retirement payment option that offers a lump-sum payment equal to 12, 24, 36, 48 or 60 months of payments of the Basic/Annuity or Survivorship 100% payment options and a lifetime monthly benefit that is actuarially reduced to reflect the lump-sum payment.
The bill also changes the required break in service before a retiree may return to work with a participating employer and continue to receive their retirement allowance. Currently, in almost all reemployment situations, a three (3) calendar month break in service from the retired member's retirement date is required before returning to employment with a participating employer or their retirement benefit will be voided.
Under House Bill 506, the break in service is reduced to only one (1) month for retirees in most all reemployment situations. Prearranged agreements to return to employment with a participating employer made prior to a member's retirement date continue to be prohibited by law for all members. Additionally, all required forms must be completed if a retired member reemploys with a participating employer within twelve (12) months of their effective retirement date.
These changes take effect for retirement dates January 1, 2024 and after.
Administrative Bills for KPPA
House Bill 551: Legalize Sports Wagering in Kentucky and Create Wagering Administration Fund: Portion of Remaining Funds to go to KY Permanent Pension Fund.
House Bill 551 legalizes sports wagering in Kentucky and creates the Wagering Administration Fund to pay for the administrative expenses involved with overseeing sports wagering activities. After administrative costs have been paid, a portion of any remaining funds in the Wagering Administration Fund will be deposited in the Kentucky Permanent Pension Fund established in KRS 42.205. This fund was created in 2016 to address the Commonwealth's unfunded pension liabilities. Each system operated by KPPA is potentially eligible to receive funding from this account, if authorized by the General Assembly in an enacted biennial budget bill.
House Bill 587: Internal audit functions at KPPA.
House Bill 587 requires the Kentucky Public Pensions Authority (KPPA) to appoint or contract for the services of an Internal Auditor who will report directly to the KPPA board. The Internal Auditor will be exempt from the hiring and employment provisions of KRS Chapter 18A, Chapter 45A, and 64.640, and is authorized by the Authority to appoint employees under his or her direct supervision. The Internal Auditor will also have an annual performance review conducted by the Authority.
House Bill 236: Fiduciary duties owed to the state-administered retirement systems.
House Bill 236 amends KRS 61.650 and KRS 78.790 to stipulate that fiduciaries shall consider the sole interest of the systems' members and beneficiaries using only factors with “… a direct and material connection to the financial risk or financial return of an investment." In particular, the bill prohibits the consideration of environmental, social, and governance (ESG) interests in making investment decisions.
The bill also requires the CERS and KRS Boards to adopt proxy guidelines and ensure that all proxy votes are executed by either the Board or the Board's designee in accordance with the Board's proxy voting policy; or a proxy voting service that has acknowledged a fiduciary duty in writing and who commits to following the Board's policy. Finally, House Bill 236 requires a report of proxy votes to be provided to the Boards at least once a quarter.
State Senate Confirms Gubernatorial Appointments to KRS Board
State law requires that gubernatorial appointments to the KRS Board of Trustees receive Senate approval. On March 30, three (3) Senate Resolutions confirming Governor Andy Beshear's recent appointments to the KRS board were unanimously adopted by a vote of 37-0:
- Senate Resolution 152, sponsored by Senator Julie Raque Adams, confirmed the reappointment of Lynn Hampton to the Kentucky Retirement Systems Board of Trustees for a term expiring June 17, 2026;
- Senate Resolution 226, sponsored by Senator Jimmy Higdon, confirmed the appointment of Ramsey Bova to the Kentucky Retirement Systems Board of Trustees for a term expiring June 17, 2026; and
- Senate Resolution 251, sponsored by Senator Julie Raque Adams, confirmed the reappointment of William Summers V to the Kentucky Retirement Systems Board of Trustees for a term expiring June 17, 2026.
The Resolutions only required Senate confirmation and did not need to be adopted in the House.
Significant Bill That Did Not Pass This SessionHOUSE BILL 90:
This bill would have provided an additional $100 million toward the unfunded liability of the KERS Nonhazardous pension fund, given a 1.5% increase in benefit payments to KERS and SPRS retirees; and provided a 6% raise for state employees. While the 6% raise later passed as part of House Bill 444 the other parts of House Bill 90 did not pass. Because this was the only bill that had proposed an increase in retiree benefit payments, the result was that no COLAs were authorized by the General Assembly this Session.
Because COLAs can only be authorized by legislation, retired members may want to contact their state legislator to discuss the possibility of a COLA being authorized during a legislative session. Learn more about COLAs.
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If you're interested in the legislative process you can always
watch committee meetings and the proceedings of both chambers live on KET whenever the General Assembly is in session.
You can click below to see a graphic showing the legislative process in the Kentucky General Assembly.
These legislative summaries are intended for general informational purposes only and should not be relied upon as legal advice regarding the legislative meaning, purpose, intent, application or administration of a particular statutory change.
If you have questions or concerns regarding the impact of a particular piece of legislation, please contact the Legislative Research Commission or a qualified attorney. If you have questions regarding your Kentucky Public Pensions Authority benefits, please contact us through our webpage at kyret.ky.gov or by telephone at (800) 928-4646.
Public Pension Oversight Board Materials
The Public Pension Oversight Board assists the General Assembly with its review, analysis, and oversight of the administration, benefits, investments, funding, laws and administrative regulations, and legislation pertaining to the Kentucky Public Pensions Authority.