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Bill

HB 220

AN ACT relating to pension spiking in the systems administered by the Kentucky Public Pensions Authority.

2026 Regular Session Introduced by John Blanton and 3 co-sponsors

Kentucky restricts pension spiking practices to reduce inflated retirement benefits and stabilize public pension system costs for taxpayers.

signed by Governor (Acts Ch. 189)
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Bill Summary · HB 220

Legislative bill overview

HB 220 addresses "pension spiking" in Kentucky's public pension systems administered by the Kentucky Public Pensions Authority. Pension spiking occurs when employees artificially inflate their final average salary (typically used to calculate retirement benefits) through methods like taking unused leave payouts or temporary pay increases shortly before retirement. This bill implements restrictions on such practices to reduce inflated pension obligations.

Why is this important

Pension spiking costs taxpayers significantly by increasing long-term pension liabilities beyond what was originally anticipated. The practice particularly affects state and local government budgets, as pension obligations compete with funding for schools, infrastructure, and services. Controlling spiking helps stabilize public pension systems and reduces unfunded liabilities that accumulate over time.

Potential points of contention

  • Employee compensation concerns: Restricting certain pay practices may be viewed as reducing earned compensation for public employees, particularly regarding unused leave payouts that workers consider deferred wages
  • Definition and enforcement scope: The specific restrictions in the committee substitute aren't detailed here, but implementation challenges could arise around defining what constitutes impermissible spiking versus legitimate compensation
  • Retroactivity questions: Unclear whether reforms apply to current retirees, future retirements only, or both—affecting fairness perceptions among existing beneficiaries

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

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