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Contribution Rates

Recommended employer contribution rates are determined by the annual actuarial valuation and presented to the Board of Trustees for approval. Actual employer contribution rates are set by the General Assembly in the biennial budget.  Each employer is required to contribute at the rate set by law.  Please note that employer contribution rates are subject to change depending on future actions of the General Assembly.  Employer contributions are paid on creditable compensation earned by each employee eligible for membership in KRS. 

Employee Contributions

All employees meeting the requirements for membership are required to contribute a percentage of their gross wages, referred to as creditable compensation, to KRS.

When mandatory employee contributions are deducted from an employee's check, the contributions are exempt from Federal and State Income Tax withholding.  Mandatory employee contributions have been exempt from Federal and State Income Tax withholdings since August 1, 1982.  These contributions are tax deferred, which means the contributions are withheld from employees’ gross pay before Federal and State Income Tax. 

From January 1, 1987 through December 31, 2016, Federal Social Security withholdings were also exempt.  This changed January 1, 2017 under a  Memorandum of Agreement between the Commonwealth of Kentucky and the Internal Revenue Service.  As of January 1, 2017, employee contributions are deducted after Federal Social Security is withheld.

Employer Contributions

KERS & SPRS Employer Contribution Rates
SystemFiscal Year 2019Fiscal Year 2020
 

Effective July 1, 2018

Effective July 1, 2019

KERS Nonhazardous *Reduced Rate

49.47%
83.43%

KERS Nonhazardous Budgeted Rate

83.43%
83.43%

KERS Hazardous

36.85%36.85%
SPRS146.28%146.28%

House Bill 265 passed during the 2018 legislative session reduced the employer contribution rate for Regional Mental Health/Mental Retardation Boards, Local and District Health Departments, State Universities, Community Colleges and any other agency eligible to voluntarily cease participating in the KERS. Click here to view a list of agencies authorized to pay the reduced KERS Nonhazardous employer contribution rate for fiscal year 2019 (same as fiscal year 2018). Agencies not listed  pay the KERS Nonhazardous budgeted employer contribution rate for fiscal year 2019.

 

CERS Employer Contribution Rates
SystemFiscal Year 2019Fiscal Year 2020
 

Effective July 1, 2018

Effective July 1, 2019
CERS Nonhazardous
21.48%
24.06%
CERS Hazardous
35.34%
39.58%

*House Bill 362 passed during the 2018 legislative session caps CERS employer contribution rate increases up to 12% per year over the prior fiscal year for the period of July 1, 2018 to June 30, 2028.

 

 



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