Kentucky Retirement System: A Complete Guide for Public Employees and Retirees

by Grant Marsten - January 2026

The Kentucky Retirement System (KRS) provides pension and health benefits to tens of thousands of public employees across the Commonwealth. If you work (or worked) for the state, a county, or a local government, KRS likely plays a major role in your retirement income. Understanding how KRS works—its tiers, benefit formulas, retirement ages, COLAs, and funding status—can make the difference between a confident retirement and costly surprises. In this guide, we break it all down clearly and show how to model your full retirement income using the Retirementize online income calculator.

What Is the Kentucky Retirement System?

The Kentucky Retirement System (KRS) is a collection of defined benefit pension plans created to provide lifetime retirement income for eligible public employees. Unlike private-sector 401(k) plans, KRS pensions promise a predictable monthly payment for life, backed by the state.

KRS primarily administers two major systems:

• Kentucky Employees Retirement System (KERS)
• County Employees Retirement System (CERS)

According to Kentucky Retirement Systems’ Comprehensive Annual Financial Report (CAFR), KRS serves over 340,000 active, inactive, and retired members. That makes it one of the most significant public pension systems in the state.

Who Is Eligible for Kentucky Retirement System Benefits?

Eligibility depends on your employer and job classification. KRS generally covers:

• State government employees
• County and city government workers
• Non-teaching school employees
• Public safety and hazardous-duty personnel

Most employees are automatically enrolled upon hire. Participation is mandatory, meaning your pension becomes a core pillar of your retirement plan. That’s why pairing KRS with personal income modeling—using tools like the Retirementize online income calculator—is so important.

Kentucky Retirement System Plans Explained

Kentucky Employees Retirement System (KERS)

KERS serves state employees and is divided into two classifications:

• Non-Hazardous: Administrative, clerical, and professional roles
• Hazardous: Law enforcement, corrections, and certain safety roles

Hazardous employees typically retire earlier and receive higher multipliers due to job risk. For example, a hazardous employee might qualify for retirement after 20 years, while a non-hazardous employee may need 27 years or more.

County Employees Retirement System (CERS)

CERS covers county and local government workers. While benefit formulas are similar to KERS, funding and employer contribution rates differ because each county participates separately.

Tier Structure and Retirement Reform Changes

KRS members fall into three tiers, based on hire date:

• Tier 1: Hired before September 1, 2008
• Tier 2: Hired between September 1, 2008 and December 31, 2013
• Tier 3: Hired on or after January 1, 2014

Each tier affects:

• Retirement age
• Benefit multiplier
• COLA eligibility

Tier 3 members face later retirement ages and reduced benefits, making supplemental savings essential. This is a common theme discussed in how long retirement savings last planning.

How Kentucky Retirement System Benefits Are Calculated

Your pension is calculated using a simple formula:

Final Average Compensation × Years of Service × Multiplier

Example:

• Final salary: $60,000
• Service years: 25
• Multiplier: 1.97%

Annual pension = $60,000 × 25 × 0.0197 = $29,550 per year (about $2,462/month).

This is where retirees often ask: “Is this enough?” Articles like what is a good monthly retirement income for a couple highlight why income modeling is critical.

Retirement Age and Service Requirements

Normal retirement varies by tier:

• Tier 1: 27 years of service or age 65
• Tier 2: Age + service = 85
• Tier 3: Age 65 with 5 years

Early retirement is possible but comes with permanent reductions. Running scenarios through the Retirementize online income calculator helps quantify those trade-offs clearly.

Cost-of-Living Adjustments (COLAs)

Unlike Social Security, KRS COLAs are not guaranteed. They require legislative approval. According to the National Conference of State Legislatures (NCSL), Kentucky has issued limited COLAs since pension reforms.

This makes inflation planning critical. Learn more in how inflation affects retirement income.

Health Insurance and Retiree Medical Benefits

Eligible retirees may receive access to state-sponsored health insurance. Medicare coordination begins at age 65, with KRS acting as secondary coverage.

Healthcare is often the largest retirement expense. Fidelity estimates the average retired couple will need $315,000 for healthcare costs alone.

Survivor and Disability Benefits

KRS offers survivor benefits depending on the option selected at retirement. Choosing a higher survivor benefit reduces your monthly payment—but provides peace of mind.

Disability retirement is available for members unable to continue working due to medical conditions, subject to eligibility review.

Leaving Employment Before Retirement

If you leave before retirement:

• You may leave contributions for a deferred benefit
• Request a refund (forfeiting future benefits)

This decision has lifelong consequences. Articles like defined benefit vs defined contribution retirement explain why pensions are so valuable.

Is the Kentucky Retirement System Fully Funded?

Kentucky’s pension funding has improved significantly since 2019. According to Pew Charitable Trusts, Kentucky increased pension contributions by over 70% between 2018 and 2023.

While challenges remain, current retirees’ benefits are constitutionally protected.

Pros and Cons of the Kentucky Retirement System

Pros

• Lifetime guaranteed income
• Survivor protections
• Employer-funded benefits

Cons

• Limited COLAs
• Tier-based reductions
• Legislative risk

How KRS Fits Into Your Overall Retirement Plan

A pension is powerful—but rarely enough on its own. Coordinating KRS with Social Security, personal savings, and withdrawal strategies is essential.

That’s exactly why we built the Retirementize online income calculator: to help you visualize income year-by-year, stress-test inflation, and avoid running out of money.

Conclusion

The Kentucky Retirement System provides a solid foundation for retirement—but understanding its rules, limits, and risks is essential. By combining your KRS pension with smart income planning and tools like Retirementize, you can turn complexity into confidence and retire on your terms.