KentuckySB 1042025 Regular SessionSenate

AN ACT relating to the Kentucky Public Employees' Deferred Compensation Authority.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 1 benefits, 1 costs, 2 mixed.

Retirement authority officials get legal cost support

The Kentucky Public Employees' Deferred Compensation Authority board must reimburse or advance legal costs for trustees, officers, and employees. Coverage applies to civil cases arising from their official duties. The board can also buy insurance covering liability from managing the plans. Contracted lawyers' hourly rates cannot exceed the Government Contract Review Committee's schedule without specific approval from the Finance secretary or designee.

Public worker retirement funds cover plan costs

Kentucky public employee deferred compensation plans use trust fund assets and investment interest to pay plan costs. Covered costs include operations, insurance premiums, deductibles, and settlements of claims against the Authority, its plans, and trustees. The board must find that spending serves participants' best interests. These payments can reduce assets held for participants.

Public workers gain self-directed investing options

The board can offer Kentucky public employee retirement savers self-directed brokerage accounts through a licensed, board-selected broker registered with federal securities regulators. Account investments must be securities registered with the U.S. Securities and Exchange Commission. Participants alone choose and monitor investments and bear account expenses, losses, and claims arising from their actions. The Authority and board have no duty to review these investments, results, or fees and are not liable for participant-related losses.

Retirement trustees face duties and lawsuit limits

Trustees must act in good faith, stay informed, and serve the Authority's, plans', and trusts' best interests. They must use ordinary prudent care when making inquiries. Money damages or court orders against trustees generally require a breach of these duties. Money damages also require willful misconduct or wanton or reckless disregard for people's rights, safety, or property. Claimants seeking money must prove the required elements and legal cause of harm to the Authority, plans, or trusts by clear and convincing evidence.

Sponsors & Cosponsors

Sponsor

Scott Madon
Republican • Senate

Cosponsors

Amanda Mays Bledsoe
Republican • Senate
Jimmy Higdon
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 134 • No: 0

House vote • 3/28/2025

3rd reading, passed

Yes: 98 • No: 0

Senate vote • 2/21/2025