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Senate Bill 10 raises KPPA contributions for some CERS retirees and requires pre‑funding
Summary
KPPA explained that Senate Bill 10 (2025) increases the dollar contribution KPPA pays for certain CERS members who meet career thresholds, applies only to non‑Medicare dollar‑plan CERS members, and requires affected members to begin pre‑funding the health insurance fund starting July 1, 2026.
A Kentucky Public Pensions Authority presenter summarized Senate Bill 10, saying the law raises KPPA's monthly dollar payments for certain County Employees Retirement System (CERS) members who meet defined career thresholds and requires pre‑funding contributions by affected members.
The change matters because it increases monthly KPPA contributions for eligible retirees who are in the dollar‑contribution plan and not yet Medicare eligible, and it shifts some cost responsibility to active employees through required health insurance contributions beginning July 1, 2026.
The presenter said the benefit increase takes effect January 1, 2026, for retirees who meet or exceed the career threshold at retirement and provided numerical examples. For a CERS member with a participation date of 08/01/2004 who retires with 324 months (27 years) of nonhazardous service on a non‑Medicare plan, the presenter said KPPA would pay $1,080 toward the monthly premium (calculated as $40 per year times 27). For a hazardous example, a CERS member retiring with 252 months (21 years) of hazardous service would receive a KPPA payment of $1,050 monthly (presenter described this as 21 years × $50).
The presenter clarified that Senate Bill 10 applies to CERS dollar‑plan non‑Medicare members only and does not affect KERS or SPRS employees or members in the percentage‑based insurance group. The presenter also explained career thresholds: 27 years (324 months) for nonhazardous service; hazardous thresholds differ by tier (20 years/240 months for tier 1; 25 years/300 months for tiers 2 and 3). Increased dollar contribution amounts are subject to an annual cost‑of‑living adjustment (presenter cited 1.5%).
On funding, the presenter said all CERS members in the dollar‑contribution plan who are not already paying into KPPA's health insurance fund will begin doing so; examples given included hazardous members paying 2% of creditable compensation and nonhazardous CERS employees paying 1% beginning July 1, 2026. The presenter called these health insurance contributions a nonrefundable pretax contribution, in addition to the standard employee pension contribution (5% or 8%).
The presenter urged affected members to review enrollment materials and contact KPPA for account‑specific questions. The agency also outlined that the enhanced dollar payments revert to the non‑enhanced (original) amounts once a retiree becomes Medicare eligible, and that retirees turning 65 should coordinate Part A and Part B enrollment with Social Security to avoid gaps or penalties.
The presenter concluded by noting the effective dates and advising members to track KPPA notices for implementation details and payroll changes.
