FRANKFORT, KY – The Kentucky Public Pensions Authority announced the interest earned and credited to members in its Tier 3 Hybrid Cash Balance Plan. The Tier 3 plan is for members who began participation on or after January 1, 2014, per guidelines established under Kentucky Revised Statutes 61.597 and 16.583.
For the fiscal year ended June 30, 2022, the following earned interest amounts have been calculated:
County Employees Retirement System Nonhazardous 5.68%
County Employees Retirement System Hazardous 5.79%
Kentucky Employees Retirement System Nonhazardous 5.28%
Kentucky Employees Retirement System Hazardous 5.70%
State Police Retirement System 5.58%
The KPPA Tier 3 Cash Balance Plan is known as a “hybrid” plan because it has characteristics of both a defined contribution plan and a defined benefit plan. Members and employers contribute a specified amount into the member’s account. That account earns a guaranteed four percent (4%) at the end of each fiscal year. In addition, if the 5-year Geometric Average Net Investment Return (GANIR) exceeds 4%, the member shares in the excess (“upside”) interest. The member’s account will be credited with 75% of the amount of the return over the 4% guarantee. The above rates reflect both the 4% guarantee and the calculated upside share.
For more information on this calculation, visit KPPA’s Cash Balance Plan page, the Benefit Calculation page, or the Tier 3 Guide.
As of June 30, 2022, KPPA had 112,308 members in the Tier 3 plan. This represents 27.4% of the total KPPA membership.
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The Kentucky Public Pensions Authority is responsible for the investment of funds and administration of pension and health insurance benefits for over 401,000 active and retired state and local government employees, state police officers, and nonteaching staff of local school boards and regional universities.
Visit our website at
https://kyret.ky.gov