19RS HB 504

House Bill 504

Actions

Last Action	02/21/19: to State Government (H)
Title	AN ACT relating to the Teachers' Retirement System.
Bill Documents	Introduced
Fiscal Impact Statement	Actuarial Analysis
Bill Request Number	1568
Sponsors	S. Lewis, R. Brenda, J. Glenn, R. Goforth
Summary of Original Version	Create a new section of KRS 161.220 to 161.716 to specify that new nonuniversity members of the Teachers' Retirement System on or after January 1, 2020, shall receive a foundational benefit component, which shall be a traditional defined benefit plan, and a supplemental benefit component which shall be a plan based upon the member's account balance; provide that the cost of the foundational benefit for these new members shall be accessed annually in the actuarial valuation; provide that if the funding level of the foundational benefit component for new nonuniversity members falls below 90%, the TRS board shall make one or more of the following changes to keep employer costs within the statutory fixed rate of 8% for the foundational benefit component: Utilize moneys in the stabilization reserve account from any excess contributions above costs of the new plan components for new nonuniversity members; utilize prospective mandatory employee and employer contributions from the supplemental benefit component; adjust the regular interest rate, benefit factor, age and service requirements to retire, or COLAs for new nonuniversity members only; create a new section of KRS 161.220 to 161.716 to establish the supplemental benefit component for new nonuniversity members who enter TRS on or after January 1, 2020, that pays benefits based upon mandatory employee and employer contributions of 2% of pay, voluntary employee and employer contributions, and interest on the accounts of the 30-year Treasury rate plus 1%; provide for vesting of employer contributions after 5 years; provide that a new nonuniversity member may take a refund, distribution, or annuitize their account balance into a monthly payment based upon assumptions established by the TRS board; amend KRS 161.155 to provide that new nonuniversity TRS members on or after January 1, 2020, shall not have any lump-sum sick leave payments added to their foundational benefit component calculation but may have the payment deposited into the supplemental benefit component; repeal, reenact, and amend KRS 161.220 to establish definitions for the new foundational benefit component and supplemental benefit component for new nonuniversity employees and make technical amendments to conform to a recent court decision; repeal, reenact, and amend KRS 161.540 to specify that new nonuniversity TRS members on or after January 1, 2020, shall contribute 13.75% of pay with 8% going to fund the foundational benefit component, 2% to fund the supplemental benefit component, and 3.75% to fund retiree health benefits; repeal, reenact, and amend KRS 161.550 to specify that the maximum employer contribution rate for new nonuniversity members on or after January 1, 2020, shall be 11.75% with 8% going to fund the foundational benefit component, 2% to fund the supplemental benefit component, and 0.75% to fund retiree health benefits; repeal, reenact, and amend KRS 161.600 to provide that new nonuniversity members on or after January 1, 2020, shall be eligible to retire upon attaining age 55 with 5 years of service; repeal, reenact, and amend KRS 161.620 to provide that new nonuniversity TRS members shall receive a benefit factor of 1.5% up to 2.5% based upon the member's age and years of service; increase the life insurance benefit for new nonuniversity members on or after January 1, 2020, from $2,000 and $5,000 while active and retired respectively to $5,000 and $10,000 respectively; repeal, reenact, and amend or repeal and reenact or amend KRS 61.400, 161.420, 161.470, 161.480, 161.500, 161.507, 161.515, 161.520, 161.522, 161.525, 161.545, 161.5465, 161.547, 161.548, 161.549, 161.568, 161.580, 161.585, 161.590, 161.595, 161.605, 161.612, 161.615, 161.623, 161.630, 161.661, 161.650, 161.700, and 161.714 to make technical and conforming amendments and to conform to a recent court decision.
Index Headings of Original Version	Retirement and Pensions - Teachers' Retirement System, new plan for new nonuniversity members on or after 1/1/2020 State Agencies - Teachers' Retirement System, new plan for new nonuniversity members on or after 1/1/2020 Teachers - Teachers' Retirement System, new plan for new nonuniversity members on or after 1/1/2020 Actuarial Analysis - Teachers' Retirement System, new plan for new nonuniversity members on or after 1/1/2020