Kentucky has made changes to retirement plan provisions for its Teachers’ Retirement System (KTRS), as presented in House Bill 258, adopted by the House and Senate on March 29, 2021. The stated intent of the legislation is to reduce pension costs for the state and K–12 school districts.

Equable Institute has analyzed the proposed changes using Retirement Security Report methodology, and we report here how these changes to retirement benefits would influence current and/or future KTRS plan members.



The new retirement benefit design adopted via HB258 will not serve any workers well, whether they are public school employees or university members.

  • Short-Term Workers are slightly better off under the new plan design, but this is largely irrelevant as the hybrid plan scores just 34% of available Retirement Benefits Score points.
  • Medium-Term Workers also are not served well by either the legacy pension plan or the new hybrid plan, the latter of which is statistically just about as bad as the former.
  • Those who work a full career covered by KTRS will be served moderately well by the new hybrid plan (scoring 63% of available points), but this is actually worse than the legacy pension plan (scoring 70% of available points).

The legacy pension plan was not providing a path to retirement security for the vast majority of its members, so a change to the status quo was more than reasonable. However, this adopted change did not improve benefits for KTRS members.

The stated intent, though, was to reduce costs. Because the underlying design has lower pension benefit values and because the supplemental guaranteed return plan has set its rates at a very manageable level, it is likely this goal will be met.

The new hybrid plan is not using a more realistic assumed rate of return, meaning unfunded liabilities are likely to accrue on the new plan. Such costs mean it is not likely that the new plan will save as much money as forecast, But additional costs based on missing the assumed rate of return would have happened to the legacy pension plan too.