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Dear Colleagues:

The Kentucky General Assembly passed the Higher Education Pension Reform Bill (HB 358) last Thursday with some changes to the original consensus proposal that passed the House last month. With Governor Bevin’s signature, it will become law.

This bill gives us a path to financial predictability relative to our pension costs. Most importantly, the options provided would allow us the opportunity to avoid the drastic contribution increase from 49 percent to 84 percent.

Key points of this reform bill that would impact NKU include:

  • Once an actuarial study is commissioned and our total liability to the system is determined, the Board of Regents will make a decision in the best interest of NKU and its employees:

1.     Remain in KERS and pay the full contribution rate (84 percent) OR
2.     Exit the system under the provisions in HB 358.

  • HB 358 affects non-hazardous employees in the Kentucky Employee Retirement System (KERS).

If the Board of Regents decides to exit the KERS system:

  • New hires to NKU after January 2019 will participate in our TIAA defined contribution retirement plan.
  • KERS employees with a participation date on or after 2014 (Tier III) will be moved to the defined contribution plan.
  • Employees with a participation date before 2014 (Tier I and Tier II) experience no changes to their plan and will have the option to remain in the KERS system. These employees will be offered an alternative option to participate in the defined contribution plan.
  • Human Resources will work with employees to understand the options and ensure employees are given the resources they need to determine what’s in their best interests.

Our three categories of employees, according to the KERS system:

  • Tier I: Participation prior to 9/1/2008
  • Tier II: Participation between 9/1/2008 and 1/1/2014
  • Tier III: Participation on or after 1/1/2014

Thank you for all you do for our university, our students and our region. We are grateful for the support in the General Assembly and we will continue to share details with you as we learn more information throughout the process.