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Kentucky Housing Corporation to exit state pension system, will transition to defined contribution plan

The Kentucky Housing Corporation (KHC) Board of Directors chose today to exit the Kentucky Retirement Systems (KRS). Starting July 1, KHC and its employees will no longer contribute to the state pension system.

“Over the last three months, we have weighed the financial and personal impacts of each option upon the staff and KHC,” said Mike Denham, board chair. “It was a difficult decision, but at the end of the day, our duty is to the corporation and the people of Kentucky. Today’s decision will enable the corporation to continue providing affordable housing solutions well into the future.”

For several years, KHC has explored the possibility of exiting the pension decision and presented the option to the board after the General Assembly passed House Bill 1 in 2019, allowing quasi-governmental agencies to withdraw from KRS.

In 2021, the corporation contributed 49.7 percent of employee compensation to the pension system. That rate has increased significantly over the past decade and has been subject to change based on legislation each year. Exiting the system provides KHC more stability and flexibility, which will help it better serve the Commonwealth.

“We understand the impact this decision has on our employees, many of whom have served KHC for the majority of their careers,” said Winston Miller, executive director and chief executive officer. “Our executive team and board have carefully considered this decision and withdrawing was the best choice for the corporation’s future.”

Employees’ accounts in KRS will freeze, meaning the employee and KHC will no longer contribute to the account starting on July 1, 2021, and the employee will not earn additional service credit. However, the employees will not lose their service time, tier status or sick time. If they choose to join another KRS participating agency in the future, they can resume contributing to their accounts and earn additional service credit

The corporation will transition its employees to a defined contribution plan.

From Kentucky Housing Corporation

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