KentuckyHB 4412025 Regular SessionHouseWALLET

AN ACT relating to reemployment after retirement in the Teachers' Retirement System.

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 3 benefits, 2 costs, 0 mixed.

Working teacher retirees keep health coverage

Teachers’ Retirement System annuitants keep their health coverage when returning to an employer outside a state-administered retirement system. They do not have to take that employer’s health insurance. Continued coverage and benefits remain subject to the Medicare Secondary Payer Act.

More school jobs for retired educators

The law raises the general full-time hiring limit for retired educators from 3% to 10% of an employer’s full-time active membership. School districts can seek yearly approval from the Kentucky Department of Education to exceed their quota. The retirement system’s actuary can recommend a lower limit to protect pension funding. Its board can raise the limit for teacher shortages when the actuary finds pension funding remains sound. Districts no longer need to search for other applicants and certify that none are qualified before hiring retirees full time.

More shortage jobs with retiree pay protections

Districts can hire retirees for full-time or part-time shortage-area teaching and administrative jobs without the usual earnings limits. The district limit rises from the greater of two retirees or 1% of full-time active members to four or 10%, whichever is greater. Districts no longer need to confirm annual efforts to recruit active teachers or administrators first. Retirees in these jobs must receive at least the district’s Rank II salary for 10 years of experience. Separation rules, district health coverage, and required retirement contributions still apply; districts pay contributions based on the pension liability these hires create.

Pension waiver option closes to new retirees

Retired educators can no longer newly enroll in the pension-waiver option for full-time work covered by the Teachers’ Retirement System. That option allowed retirees to stop pension payments, contribute on their new salary, and potentially have their pension recalculated. Retirees already participating before the law’s effective date can continue.

Retiree job exception drops virtual high school

The law removes Kentucky Virtual High School from the listed schools covered by a retiree hiring exception. The exception still allows jobs without the usual earnings limits in eligible shortage areas at Department of Education schools. These include the Kentucky School for the Blind and Kentucky School for the Deaf; audit-team service also remains covered. The Teachers’ Retirement System sets the maximum number of covered employees.

Sponsors & Cosponsors

Sponsor

James Tipton
Republican • House

Cosponsors

Beverly Chester-Burton
Democrat • House
Daniel Grossberg
Democrat • House

Roll Call Votes

All Roll Calls

Yes: 234 • No: 0

Senate vote • 3/28/2025

passed

Yes: 100 • No: 0

Senate vote • 3/11/2025

3rd reading, passed

Yes: 37 • No: 0

House vote • 2/25/2025