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Bill

HB 218

AN ACT relating to membership dates in the Kentucky Employees Retirement System.

2026 Regular Session Introduced by John Blanton and 1 co-sponsor

The bill standardizes and clarifies definitions for KERS to determine membership, service, compensation, and benefit calculations, affecting eligibility and how retirement benefits

to State Government (H)
#actuarialanalysis #retirementandpensions #stateagencies #stateemployees
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Bill Summary · HB 218

Purpose and scope

  • Bill: HB 218 (2026 Session, Kentucky)
  • Topic: Membership dates and definitions related to the Kentucky Employees Retirement System (KERS), within Kentucky Revised Statutes (KRS 61.510 to 61.705).
  • Goal: Clarify and codify terms used to determine eligibility, service credit, final compensation, and other retirement system calculations, with particular attention to when membership begins and how various categories of employment and compensation are treated for retirement purposes.

Key provisions and changes

  • Definitions overhaul and clarifications (Section 1, KRS 61.510 to 61.705):
    • Establishes standard definitions for essential terms used in the retirement system, including:
    • System, Board, Department, Examier, Employee, Employer, State, Member, Service, Current service, Prior service, Accumulated contributions, Creditable compensation, Final compensation, Final rate of pay, Retirement allowance, Actuarial equivalent, Normal retirement date, Fiscal year, and many others.
    • Membership-related terms:
    • “Member” includes current employees and former employees with remaining membership rights; excludes independent contractors, seasonal, emergency, temporary, interim, and part-time workers unless designated otherwise by the board.
    • “Employee” covers General Assembly members/officers/employees and participating department staff; excludes non-employee categories as defined.
    • Service credit concepts:
    • Defines Current service and Prior service, including how General Assembly service is credited (e.g., one month of current service for each month in office; crediting rules for prior service require minimum months of compensated work).
    • Accumulated contributions:
    • Details what counts as accumulated contributions and how certain post-1982 contributions are treated for members beginning after September 1, 2008 (exclusion of certain 401(h)-type deposits).
    • Creditable compensation:
    • Specifies what counts as creditable compensation, including wages, tips, certain bonuses, and specific inclusions/exclusions (e.g., excludes living allowances, certain lump-sum payments, and volunteer-related fees under certain conditions).
    • Final compensation and final rate of pay:
    • Sets complex formulas for computing final compensation, with separate provisions based on participation start dates, hazardous vs. nonhazardous positions, and retirement timing.
    • Provides that certain funding for special final compensation provisions will be drawn from existing funds (not from KRS 61.565 funding mechanisms in some cases).
    • Other definitions:
    • Normal retirement date, Beneficiary, Recipient, Qualified domestic relations order, Alternate payee, Accumulated employer credit, Accumulated account balance, Variants of participant, and related terms are defined to standardize interpretation.
    • Miscellaneous terms:
    • Defines terms such as “level percentage of payroll amortization method,” “increment” (purchased service credit), “volunteer” (and nominal fees), “nominal fee” cap, “nonhazardous position” vs. hazardous position, and “volunteer” parameters for retirees returning to work.
    • Clarifies what constitutes “last day of paid employment” for current service credit purposes.
    • Expands or clarifies what counts as “membership date” for various participation scenarios (e.g., defined contribution plan participation, educational contract scenarios, and specific Kentucky entities).
  • Coverage and applicability:
    • The definitions apply to all members and participating entities under KRS 61.510 to 61.705, including General Assembly-related employment and various state departments and agencies.

Who would be affected

  • Members and retirees of the Kentucky Employees Retirement System (KERS) and their beneficiaries.
  • State departments, agencies, and other employers participating in KERS, including the General Assembly (Senate and House), Louisville/Jefferson County Public Defender Corporation-affiliated positions, and other designated participating bodies.
  • Individuals with special employment arrangements (seasonal, emergency, interim, part-time, interim, and volunteers) in or interacting with KERS, due to definitional changes and eligibility criteria.
  • Payroll and agency reporting officials responsible for reporting contributions and maintaining records, due to expanded definitions and updated data elements.

Procedural and timeline aspects

  • Effective date: The bill text provided does not specify an explicit effective date within the excerpt. If enacted, the definitions would govern membership and benefit calculations going forward, subject to any transitional provisions the final bill may include (not visible in the provided text).
  • Legislative status:
    • Introduced January 7, 2026, assigned to committees (State Government/H), with activity notes indicating committee consideration.
  • Interaction with existing statutes:
    • Amends KRS 61.510 to 61.705, which governs Kentucky Employees Retirement System operations, benefiting from standardized, explicit definitions to reduce ambiguity in benefit determinations and service credit calculations.

Notable details to watch

  • The bill emphasizes precise treatment of various compensation types and service credits, which can impact final compensation formulas and retirement eligibility.
  • Special treatment for General Assembly employment and particular positions (hazardous vs nonhazardous) can affect final compensation calculations and service credit valuation.
  • The act references funding sources for certain retrospective computations (e.g., final compensation provisions) and may interact with other statutes governing pension funding and benefit amortization.

If you’d like, I can tailor this into a brief policy brief for lawmakers or a plain-language summary for a public-facing page, and highlight potential fiscal impacts or administrative considerations.

Compiled from official sources — confirm details with the bill’s official record.

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