BIPPS’ plan for KERS quasi government agencies praised in new report

Yesterday, the National Institute on Retirement Security released a new report highlighting innovative strategies for public pension funding, which included one of the solutions released by the Bluegrass Institute in May 2019 . The BIPPS plan was in response to the growing pension-cost burden for nongovernmental, or quasi, agencies who participate in the Kentucky Employees Retirement System (KERS).

To stop the practice of forcing quasi agencies to make disproportionally higher payments than their individual liabilities, the BIPPS plan calls for basing quasi-agencies’ payments on liabilities specific to them which are much lower than the Annual Required Contribution (ARC) payments into the state workers’ pension system.

The BIPPS concept was adopted by legislators in the Kentucky House of Representatives through HB 171 which passed the House unanimously (90-0). However, the bill met a premature end in the Senate with the onset of the COVID-19 pandemic.

As BIPPS pension solutions continue to receive national attention, the legislature will likely take up the measure again in the 2021 legislative session.