FRANKFORT, Ky. (WKYT) – While Fayette County Public Schools Superintendent Demetrus Liggins remains on paid administrative leave, questions have come in about Kentucky’s teacher retirement system and when an employee becomes vested.
Educators and many administrators in Kentucky public schools participate in the Kentucky Teachers’ Retirement System (KTRS), established in 1938. KTRS provides a guaranteed lifetime retirement benefit based on years of service, final average salary, a multiplier and the payment option selected.
In Kentucky, KTRS members generally become vested after five years of service in Kentucky public schools. That means their pension benefit is secured once they meet that service requirement.
If a member leaves employment before retirement, they may leave their contributions in KTRS and begin drawing a monthly lifetime annuity once they reach an eligible age. Members may also be able to roll funds into another retirement program. Withdrawing money before retirement age can carry IRS penalties, depending on the situation.
State laws have changed over time, and eligibility requirements can depend on when a member first entered the system.
According to his contract, Liggins’ start date was July 26, 2021, placing him in Tier 3, which applies to members who entered KTRS between July 1, 2008, and Dec. 31, 2021. Under Tier 3, members can begin withdrawing funds at age 60 with five years of service without penalty. Members who contribute to KTRS for 27 years can withdraw without penalty at any age. If someone leaves before becoming eligible for retirement, they can leave funds deposited or withdraw the accumulated balance.
In 2002, the Kentucky General Assembly amended state law stating that anyone convicted of a felony related to their employment forfeits retirement benefits and will only receive their retirement contributions returned, plus interest.
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