House Bill 1

Actions | Amendments
Last Action 07/24/19: signed by Governor (Acts ch. 1)
Title AN ACT relating to the Kentucky Employees Retirement System and declaring an emergency.
Bill Documents Current/Final
Introduced
Impact Statements Actuarial Analysis
Fiscal Note
Local Mandate
Bill Request Number 30
Sponsor J. Tipton
Summary of Original Version Amend KRS 61.522 to provide a one-time window where quasi-governmental agencies may voluntarily cease participation in the Kentucky Employees Retirement System (KERS) effective June 30, 2020, for nonhazardous employees by paying the actuarial costs of ceasing participation by lump-sum or installments; provide that an eligible KERS employer may request an estimate of the cost of ceasing participation in the system; provide that a ceasing quasi-governmental employer may elect to allow current employees who entered KERS prior to 1/1/2014 (Tier I and II employees), to continue to participate in the system after June 30, 2020, by paying the additional actuarial costs; provide that employees of the ceasing employer who are no longer participating in KERS shall participate in a defined contribution plan established by the employer; vary assumed rate of return/discount rate used to determine cessation costs from 3% to 4.5% based upon employers decisions regarding payment type (lump-sum vs. installments) and whether or not the employer allows Tier I and II employees to participate in KERS after June 30, 2020; require lump-sum payments for ceasing participation to be paid within one year; establish a maximum installment period of 30 years with interest at the assumed rate of return; establish installment payment amounts that are the higher of FY 2019-2020 employer contributions or the amount determined by multiplying 49.47% of pay by annual average payroll over prior 60 months in which contributions were paid and increasing the dollar value by 1.5% annually, except that if an employer cannot pay off its costs within 30 years and has elected for its Tier I and II employees to continue participating in KERS after June 30, 2020, the base payment amount will be adjusted to ensure payment within 30 years; provide that KERS quasi-governmental agencies receiving General Fund assistance to pay the higher employer rates will continue to receive the assistance until all costs are paid; amend KRS 61.675 to provide that if a KERS employer has elected to pay the costs of ceasing participation by installments and is delinquent for 90 days or more in making payments, the systems: shall not allow future service credit accruals if the employer's employees are participating in the system after the cessation date until such time payments are up to date; may file action in Franklin Circuit Court to collect delinquent funds; and shall notify the Finance & Administration Cabinet who may choose to withhold state appropriations to the ceasing employer until such time the payments are made; amend KRS 18A.225 and 18A.205 to provide that a ceasing KERS employer who participated in the state health and life insurance plans prior to ceasing participation may continue to participate in the plans after ceasing participation; provide that a ceasing KERS employer under subsection (8) of Section 1 of this Act may finance costs including financing the costs through bond issues; provide that the KERS employer contribution rate shall be 49.47% of pay in FY 2019-2020, retroactive to July 1, 2019, for Regional Mental Health Programs, Local and District Health Departments, domestic violence shelters, rape crisis centers, child advocacy centers, state-supported universities and community colleges, and any other agency eligible to voluntarily cease participating in the Kentucky Employees Retirement System pursuant to KRS 61.522; include nonseverability provisions; EMERGENCY.
Index Headings of Original Version Fiscal Note - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Actuarial Analysis - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Local Mandate - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Effective Dates, Emergency - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Public Officers and Employees - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Retirement and Pensions - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
State Agencies - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Actuarial Analysis - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Jump to Proposed Amendments House Floor Amendment 1
House Floor Amendment 2
House Floor Amendment 3
House Floor Amendment 4
Senate Floor Amendment 1
Senate Floor Amendment 2
Senate Floor Amendment 3
Votes Vote History

Actions

Top | Amendments
07/19/19
  • introduced in House
  • to State Government (H)
  • taken from State Government (H)
  • 1st reading
  • returned to State Government (H)
  • posted in committee
07/20/19
  • reported favorably, 2nd reading, to Rules
  • floor amendments (1), (2) and (3) filed
  • posted for passage in the Regular Orders of the Day for Monday, July 22, 2019
07/22/19
  • floor amendment (4) filed
  • 3rd reading
  • floor amendments (2) and (3) ruled not germane to the Governor's Call
  • floor amendment (1) ruled out of order
  • bill passed 52-46
  • received in Senate
  • to Committee on Committees (S)
  • taken from Committee on Committees (S)
  • 1st reading
  • returned to Committee on Committees (S)
  • to State & Local Government (S)
07/23/19
  • reported favorably, 2nd reading, to Rules
  • posted for passage in the Regular Orders of the Day for Wednesday, July 24, 2019
  • floor amendments (1) (2) and (3) filed
07/24/19
  • 3rd reading
  • floor amendments (1) (2) and (3) defeated
  • passed 27-11
  • received in House
  • enrolled, signed by Speaker of the House
  • received in Senate
  • enrolled, signed by President of the Senate
  • delivered to Governor
  • signed by Governor (Acts ch. 1)

Proposed Amendments

Top | Actions
Amendment House Floor Amendment 1
Piggyback? Yes
Sponsor A. Hatton
Summary Delete the original provisions of the bill; freeze the employer contribution rate of 49.47 percent for the fiscal year beginning on July 1, 2019, for pension and health insurance for nonhazardous duty employees participating in the Kentucky Employees Retirement System who are employed by mental health/mental retardation boards, local and district health departments, domestic violence shelters, rape crisis centers, child advocacy centers, state-supported universities and community colleges, and any other agency eligible to voluntarily cease participating in the Kentucky Employees Retirement System; RETROACTIVE; EMERGENCY.
Index Headings Effective Dates, Emergency - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Retirement and Pensions - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Universities and Colleges - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Retroactive Legislation - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Appropriations - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Budget and Financial Administration - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Special Purpose Governmental Entities - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees

Amendment House Floor Amendment 2
Sponsor J. Graviss
Summary Delete Section 7 relating to nonseverability of bill provisions.
Index Headings Retirement and Pensions - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees

Amendment House Floor Amendment 3
Sponsor J. Graviss
Summary Provide that the nonseverability provisions shall not apply to Section 6 pertaining to the KERS employer rate paid in FY 2019-2020 by quasi-governmental employers.
Index Headings Effective Dates, Emergency - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Public Officers and Employees - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Retirement and Pensions - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
State Agencies - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies

Amendment House Floor Amendment 4
Sponsor B. Wheatley
Summary Retain Sections 2 to 8 of the bill; replace Section 1 of the bill and amend KRS 61.522 to provide a one-time window where quasi-governmental agencies, including local and district health departments and state-supported universities and community colleges, may voluntarily cease participation in the Kentucky Employees Retirement System (KERS) effective June 30, 2020, for nonhazardous employees by paying the actuarial costs of ceasing participation by lump-sum or installments; provide that an eligible KERS employer may request an estimate of the cost of ceasing participation in the system; for any employer whose cessation date occurs on or after the date of the Act, allow employees participating prior to January 1, 2014, (Tier I and II) and hired prior to the effective cessation date a one-time election to continue participating in the system from which the employer ceased participation; provide that employees of the ceasing employer who are hired after the effective cessation date or whose participation with the system occurred on or after January 1, 2014 (Tier III), shall participate in a defined contribution plan established by the employer; vary assumed rate of return/discount rate used to determine cessation costs from 3% to 3.5% based upon employers' decisions regarding payment type (lump-sum vs. installments) and require lump-sum payments for ceasing participation to be paid within one year; establish a maximum installment period of 30 years with interest at the assumed rate of return; establish installment payment amounts that are the higher of FY 2019-2020 employer contributions or the amount determined by multiplying 49.47% of pay by annual average payroll over prior 60 months in which contributions were paid and increasing the dollar value by 1.5% annually, except that if an employer cannot pay off its costs within 30 years and one or more of its employees Tier I and II employees elected to continue participating in KERS after June 30, 2020, the base payment amount will be adjusted to ensure payment within 30 years, but if none of its elected to continue participating in KERS after June 30, 2020, then the employer shall pay the original rate for 30 years and no additional costs or adjustments will apply; provide that KERS quasi-governmental agencies receiving General Fund assistance to pay the higher employer rates will continue to receive the assistance until all costs are paid; EMERGENCY.
Index Headings Actuarial Analysis - HFA 4 to HB 1
Effective Dates, Emergency - Kentucky Retirement System, option to cease participation in KERS by quasi-governmental employers
Effective Dates, Emergency - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Public Officers and Employees - Quasi-governmental employers, option to cease participation in KERS
Public Officers and Employees - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Retirement and Pensions - Kentucky Employees Retirement System, option to cease participation by postsecondary institutions
Retirement and Pensions - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
State Agencies - Kentucky Retirement System, option to cease participation in KERS by quasi-governmental employers
State Agencies - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies

Amendment Senate Floor Amendment 1
Sponsor R. Webb
Summary Delete the original provisions of the bill; freeze the employer contribution rate of 49.47 percent for the fiscal year beginning on July 1, 2019, for pension and health insurance for nonhazardous duty employees participating in the Kentucky Employees Retirement System who are employed by mental health/mental retardation boards, local and district health departments, domestic violence shelters, rape crisis centers, child advocacy centers, state-supported universities and community colleges, and any other agency eligible to voluntarily cease participating in the Kentucky Employees Retirement System; RETROACTIVE; EMERGENCY.
Index Headings Effective Dates, Emergency - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Piggybacked Bills - SFA 1 to HB 1
Retirement and Pensions - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Universities and Colleges - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Retroactive Legislation - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Appropriations - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Budget and Financial Administration - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Special Purpose Governmental Entities - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees

Amendment Senate Floor Amendment 2
Sponsor R. Thomas
Summary Retain Sections 3 to 8 of the bill; replace Section 1 of the bill and amend KRS 61.522 to provide a one-time window where quasi-governmental agencies, including local and district health departments and state-supported universities and community colleges, may voluntarily cease participation in the Kentucky Employees Retirement System (KERS) effective June 30, 2020, for nonhazardous employees by paying the actuarial costs of ceasing participation by lump-sum or installments; provide that an eligible KERS employer may request an estimate of the cost of ceasing participation in the system; for any employer whose cessation date occurs on or after the date of the Act, employees hired prior to the effective cessation date shall continue participating in the system from which the employer ceased participation; employees of the ceasing employer who are hired after the effective cessation date shall participate in an alternate plan established by the employer; vary assumed rate of return/discount rate used to determine cessation costs from 3% to 3.5% based upon employers' decisions regarding payment type (lump-sum vs. installments) and require lump-sum payments for ceasing participation to be paid within one year; establish a maximum installment period of 30 years with interest at the assumed rate of return; establish installment payment amounts that are the higher of FY 2019-2020 employer contributions or the amount determined by multiplying 49.47% of pay by annual average payroll over prior 60 months in which contributions were paid and increasing the dollar value by 1.5% annually; if an employer cannot pay off its costs within 30 years, the base payment amount will be adjusted to ensure payment within 30 years; provide that KERS quasi-governmental agencies receiving General Fund assistance to pay the higher employer rates will continue to receive the assistance until all costs are paid; make conforming amendments to Section 2; EMERGENCY.
Index Headings Special Purpose Governmental Entities - Kentucky Employees Retirement System, option to cease participation by quasi-governmental employers
Universities and Colleges - Kentucky Employees Retirement System, option to cease participation by postsecondary institutions
Effective Dates, Emergency - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Effective Dates, Emergency - Kentucky Retirement System, option to cease participation in KERS by quasi-governmental employers
Public Officers and Employees - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
Public Officers and Employees - Quasi-governmental employers, option to cease participation in KERS
Retirement and Pensions - Kentucky Employees Retirement System, option to cease participation by postsecondary institutions
Retirement and Pensions - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
State Agencies - Kentucky Retirement System, cessation of participation in KERS by quasi-govt. agencies
State Agencies - Kentucky Retirement System, option to cease participation in KERS by quasi-governmental employers

Amendment Senate Floor Amendment 3
Sponsor M. McGarvey
Summary Delete the original provisions of the bill; amend KRS 61.522 to permit local and district health departments and state-supported universities and community colleges to voluntarily cease participating in the Kentucky Employees Retirement System under the requirements and restrictions of this section; freeze the employer contribution rate of 49.47 percent for the fiscal year beginning on July 1, 2019, for pension and health insurance for nonhazardous duty employees participating in the Kentucky Employees Retirement System who are employed by mental health/mental retardation boards, local and district health departments, domestic violence shelters, rape crisis centers, child advocacy centers, state-supported universities and community colleges, and any other agency eligible to voluntarily cease participating in the Kentucky Employees Retirement System; RETROACTIVE; EMERGENCY.
Index Headings Effective Dates, Emergency - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Retirement and Pensions - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Retirement and Pensions - Kentucky Employees Retirement System, participation by universities and health departments
Universities and Colleges - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Universities and Colleges - Retirement and pensions, cessation of participation in KERS by universities and health departments
Retroactive Legislation - Kentucky Employees Retirement System, employer contribution rate for quasi-governmental employees
Public Officers and Employees - Retirement and pensions, cessation of participation in KERS by universities and health departments
State Agencies - Kentucky Retirement Systems, cessation of participation in KERS by universities and health depts

Last updated: 7/24/2019 3:23 PM (EDT)
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