NKU Board of Regents Votes to Exit State Pension System
The Northern Kentucky board of regents approved a resolution to exit the Kentucky Employees Retirement Systems (KERS), it was announced Thursday.
In the announcement, the university described KERS as "the most severely underfunded state pension system in the country" and said that "continuing in the KERS system is unsustainable."
Dubbed a "soft freeze" resolution, the university characterized the move as resulting in higher debt service and an investment "in our people and recognizes our campus community's financial and emotional well-being."
President Ashish Vaidya noted that the resolution allows Tier 1 and 2 employees to stay in the system while Tier 3 staff will move to the university's defined contribution plan, "and our models indicate that they will benefit from this move."
"This recommendation is as much an investment into our people as it is a path to ridding ourselves of the shackles of an underfunded system," Vaidya said in a note to the campus community. "And it is a belief that attracting, supporting and retaining the most capable and motivated individuals will drive and sustain the change needed to thrive in an increasingly volatile, uncertain, complex and ambiguous world."
"The post-COVID world will offer challenges and opportunities. It will require us to be even more nimble and agile as we seek innovative ways to fulfil our mission and vision. We hope this decision gives you a renewed sense of purpose and galvanizes the entire campus community to accelerate our student success efforts. What we do here at NKU makes a difference in lives of our students and the region, and we appreciate everything you do in support of our university’s mission."