House Bill 484, sponsored by Rep. Russell Webber, R-Shepherdsville, and Rep. Michael Meredith, R-Oakland, would create a new board of trustees for the County Employees Retirement System, or CERS, which serves cities, counties, and classified school employees statewide. The new board would have fiduciary responsibility, while day-to-day administrative services of CERS and KRS would be handled by a shared administrative authority.The bill passed out of committee and now heads to the Senate floor.
On March 18, the bill passed out of the Senate State and Local Government Committee. It now heads to the Senate floor.
KACo supports House Bill 484 and encourages you to contact your legislator at 1-800-372-7181 and ask them to pass the bill.
House sponsor Rep. Webber said decisions regarding CERS are now made by the Kentucky Retirement Systems (KRS) board of trustees although CERS is not directly funded by state government.
“(CERS) representation on the KRS board is only 35 percent, yet they are 76 percent of the assets and 64 percent of the members. They have no one on the KRS investment committee, which decides where and how CERS funds should be invested,” said Webber. “They will tell you that that has resulted in decisions being made that has cost their system much-needed investment income because the state’s Kentucky Employees Retirement System (KERS) is so poorly funded.”
There would be no change in retirement benefits under House Bill 484, which would also not change the state’s “inviolable contract” – statutory language that secures benefits of members who began participating in Kentucky’s public pension systems prior to 2014. Shared liability among CERS employers, in the instance that an employer leaves CERS, would also not change under the bill.
Legislative intent for creation of separate statutory “structures” for KRS and CERS benefits during the 2021 Regular Session is also found in House Bill 484. The proposed CERS board of trustees would assume its new responsibilities in April of next year under the proposal, with continued General Assembly oversight of all public pension systems going forward.
Rep. Jerry T. Miller, R-Louisville, spoke in support of House Bill 484 which he said addresses issues he first encountered as a member of the Louisville Metro Council several years ago.
“I saw the double-digit rate of increase that we had been getting charged with, and I did a quick calculation of how (fewer) policemen we have than when Louisville Metro merged,” said Miller. “It was in the 100s. That began my pension journey, and led me to the conclusion that local government was not being properly represented on the KRS board (of trustees).”
“I think this is a very balanced approach,” he told the House.