HIGDON’S BILL PROMOTING FAIRNESS AND FINANCIAL STABILITY IN TEACHER PENSIONS GAINS FINAL PASSAGE

HIGDON’S BILL PROMOTING FAIRNESS AND FINANCIAL 

STABILITY IN TEACHER PENSIONS GAINS FINAL PASSAGE

Senate Bill 9 also assures at least 30-day maternity leave for school district employees

FRANKFORT, KY (March 28, 2025)—The Kentucky General Assembly has approved Senate Bill (SB) 9, sponsored by Sen. Jimmy Higdon, R-Lebanon. The bill aims to address rising costs in the Kentucky Teachers’ Retirement System (TRS), standardize benefits across school districts, and improve transparency in how sick leave impacts pensions. It establishes uniform maternity leave policies, modifies pension calculations for sick leave, and increases accountability in TRS operations.

Under the legislation, and through a Senate amendment offered by Sen. Amanda Mays Bledsoe, R-Lexington, all school districts must provide up to 30 days of paid maternity leave annually by 2030. Teachers and employees who give birth will be required to use this leave before drawing from other accrued time off, and any unused maternity leave will not convert to sick leave or other leave types.

SB 9 also limits the amount of sick leave that can be counted toward pension calculations to 13 days per year—10 sick days and three personal days—while preserving previously accrued benefits. The state will cover actuarial costs for sick leave accrued as of June 30, 2025, plus up to 13 days accrued annually thereafter. If a district offers additional sick leave beyond this threshold, it must cover the pension liability itself, rather than passing the cost onto the state.

One key issue addressed in SB 9 is the disparity in how sick leave and retirement benefits are structured for teachers compared to school administrators. While teachers can only bank 10 sick days per year, some administrators hired before 2008 can accrue up to 60 days of annual leave, which is fully paid out at retirement—far more generous than the 30 percent payout teachers receive for unused sick leave. This creates a system where higher-level administrators accumulate significantly larger retirement benefits at a more significant cost to the state, despite teachers being the backbone of daily classroom instruction. 

To increase transparency and oversight, TRS will be required to report sick leave liabilities in its annual actuarial valuations, and school district sick leave policies will be subject to audits. The bill also grants the Auditor of Public Accounts authority to conduct a special audit of TRS to determine the actual state costs associated with pension solvency. 

Additionally, SB 9 improves oversight of the Teachers’ Retirement System by increasing transparency and tightening financial safeguards. It allows TRS to create a separate company to manage real estate investments, allowing more efficient handling of those assets. The bill also clarifies that certain investment agreements may be governed by laws outside Kentucky, which is common in large financial transactions.

Through revisions included by the House, the bill also expands TRS membership to include employees of WeLeadCS, a program that supports computer science education in Kentucky schools. It strengthens protections for retired teachers by making sure pension rules are applied fairly. If someone is convicted of a felony related to their job, they will no longer earn interest on their retirement account after the conviction. The bill also improves the appeals process for disability benefits, giving members and their attorneys full access to all documents used in TRS’ decision-making.

SB 9 further safeguards pension funds by making it easier to correct mistakes that could lead to pension overpayments or underpayments. Finally, it repeals an outdated law governing how past benefits were funded to ensure TRS operates under clearer, more modern regulations.

The legislation follows a review by the Public Pension Oversight Board, which found TRS’ sick leave liability exceeds $800 million, more than double previous estimates. Since 2017, the General Assembly has allocated $6.3 billion in additional TRS funding beyond statutory requirements, improving pension stability under Republican supermajority leadership.

With the Senate’s concurrence on House revisions, SB 9 has been delivered to the Governor for consideration. If the governor vetoes it, it will not qualify for a legislative override. 

“I would like to believe the Governor will recognize the commonsense nature of this bill and how it plays a role in ensuring our teachers are treated the same way as administrators,” Higdon said. “We have to be serious about making sure our current teachers can trust they have the pension promised to them once they retire, and this bill is a piece of that puzzle. A veto of SB 9 would be very disappointing.”

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Sen. Jimmy Higdon, R-Lebanon, represents the 14th Senate District, including LaRue, Marion, Nelson, Spencer, and Washington Counties. Higdon serves as chair of the Senate Transportation Committee, overseeing efforts to craft biennial road plans, advance Kentucky’s transportation infrastructure, and improve public safety. He also serves as Senate co-chair of the Public Pension Oversight Board, focusing on stabilizing and strengthening Kentucky’s pension systems through reform and surplus investment. Additionally, Higdon is a member of the Senate Committees on Education; Veterans, Military Affairs, and Public Protection; and Licensing and Occupations. During the 2024 interim, he served as a Kentucky Housing Task Force member.

Visit https://legislature.ky.gov/Legislators Full Res Images/senate114.jpg for a high-resolution .jpeg of Higdon.

Please visit Legislature.ky.gov for more information on Senate Majority Caucus members and the 2025 Legislative Session, including committees, membership, legislation, and more.