Contribution Rates

Please Note: As of July 1, 2010, KERS and SPRS employers are required by law to pay for all unused sick leave which converts to additional service credit upon a member's retirement. Employers are billed for the cost following the post retirement audit of the member's account. If an employee with unused sick leave hours retired on or after July 1, 2010, and you have not yet received an invoice for a member's sick leave, please be advised it will be forthcoming. If you need a preliminary estimate of the cost for budgetary planning, you may contact your Employer Reporting, Compliance and Education reporting team.​​​​​​​
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​KER​S and SPRS Employer Contribution Rates for 2017-2018 (coming soon)

The Kentucky Retirement System Board of Directors is required by KRS 61.565 to determine the employer contribution rates for the KERS and SPRS systems based on an annual actuarial valuation.  However, the actuarially recommended and KRS Board approved rates are subject to final approval by the Kentucky General Assembly in the biennial executive branch budget bill.  The above employer contribution rates, which represent the full actuarially recommended contribution (ARC) rates, were established In House Bill 303, which was enacted by the Kentucky General Assembly during its recently completed 2016 Regular Session.  These KERS and SPRS employer contribution rates will be effective beginning July 1, 2017.​​

​CE​RS Employer Contribution Rates 2017-2018

View the 2017-2018 CERS Employer Contribution Rates Memo here.


SystemPensionInsuranceCombined
CERS Non-Hazardous14.48%4.70%19.18%
CERS Hazardous22.20%9.35%31.55%

CERS employer contribution rates are not established in the state budget legislation.  The Kentucky Retirement Systems Board of Directors sets the final CERS employer contribution rates pursuant to KRS 61.565 and 61.702.  Furthermore, KRS 61.565(6) requires the Kentucky Retirement Systems Board of Directors to establish the employer contribution rates for CERS that will phase-in to the full actuarially required rate (ARC) rate for health insurance over a ten (10) year period using the 2007-2008 fiscal year contribution rates as the base rates.  The most recent actuarial valuations were performed by the Kentucky Retirement Systems actuary – Cavanaugh Macdonald – for the fiscal year ended June 30, 2016. The CERS employer contribution rates set forth above, to be effective July 1, 2017, are the ARC funding rates as set forth in the 2016 valuation, including the 10-year phase-in of the health insurance portion of the rates.  These rates were adopted by the Kentucky Retirement Systems Board of Directors at its meeting held on December 1, 2016.

KERS and SPRS Employer Contribution Rates for 2016-2017
SystemEmployer Rate
KERS Nonhazardous48.59%
KERS Hazardous23.82%
SPRS89.21%
 CERS Employer Contribution Rates for 2016-2017

SystemEmployer Rate
CERS Nonhazardous18.68%
CERS Hazardous31.06%

Historical Contribution Rates 

Getting Help

Employer Reporting, Compliance & Education reporting teams are available to answer any questions a reporting official may have regarding the policies and procedures of KRS.

Employer Contributions

Each employer is required to contribute at the rate determined by the Board of Trustees to be necessary for the actuarial soundness of KRS as required by Kentucky Revised Statute 61.565. 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 and Federal Social Security withholdings. Mandatory employee contributions have been exempt from Federal and State Income Tax withholdings since August 1, 1982 and from Federal Social Security withholdings since January 1, 1987. As a result, employee contributions to KRS are deducted before Federal and State Income Tax and Federal Social Security are withheld.
 
Since February 2003, employees have also been able to purchase service credit with pre-tax paycheck deductions provided the employer has arranged to make installment deductions with KRS. As such, deductions made with a before tax IPS are not subject to Federal and State Income Tax Withholding and Federal Social Security withholdings.
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