A Citizen's Guide to Kentucky's Pension Crisis | Page 4

PENSION TERMS
DEFINED
DEFINED BENEFIT
A retirement plan that promises its recipients a set level of benefits, generally for
life. In the case of pensions, the benefit is
based on a formula that usually includes
the number of years served and an employee’s salary multiplied by a preset figure
or retirement factor (for example, 30 years
x $40,000 x 1.75%).

KENTUCKY RETIREMENT SYSTEM

Defining the pension problem

Also known as KRS, it is the state agency
that administers KERS, CERS and the State
Police Retirement System.

The Commonwealth of Kentucky operates two main DEFINED BENEFIT
pension systems that provide retirement benefits to public employees.

COUNTY EMPLOYEES
RETIREMENT SYSTEM
Also known as CERS, this retirement plan
covers 92,157 active and 54,904 retired
hazardous and non-hazardous duty employees of city and county governments,
local police and firefighters, non-teaching
employees of local school boards, circuit
clerks and local library employees.

• The KENTUCKY RETIREMENT SYSTEM (KRS) includes five
different funds:
• Two funds within the KENTUCKY EMPLOYEES RETIREMENT
SYSTEM, covering state government employees who work in
hazardous and non-hazardous occupations
• Two funds within the COUNTY EMPLOYEES RETIREMENT
SYSTEM, covering city and county government employees who

HAZARDOUS AND NON-HAZARDOUS
Hazardous duty employees include police,
fire, emergency medical services and corrections employees. All other employees
are classified as non-hazardous.

STATE POLICE RETIREMENT SYSTEM

work in HAZARDOUS & NON-HAZARDOUS occupations
• The STATE POLICE RETIREMENT SYSTEM, covering state troopers
• The KENTUCKY TEACHERS’ RETIREMENT SYSTEM
covers teachers and some university and community college
employees.

The retirement plan that covers 940 active
and 1,324 retired state troopers.

Pension benefits paid to public employees are based on a calculation involving three

KENTUCKY TEACHERS’

factors set by state law: an employee’s final salary, which is generally based on the

RETIREMENT SYSTEM

average of the highest five years of salary; the benefit factor, a percentage based on the

Also known as KTRS, this retirement plan

amount of service and dates of employment; and length of service, which includes

covers 77,246 active and 49,822 retired
teachers in local school districts and em-

time actually worked, prior service, purchased service and sick leave. In 2015, the

ployees of community colleges and some

average pension benefit for retired employees with 25 to 30 years of service (the

state universities.

largest category of retirees) was $27,528 a year for state government employees in a
non-hazardous position and $46,766 a year for KTRS retirees (which include teachers, administrators and some university employees).

2