Updated October 30, 2026. Quick answer: For nonhazardous members of the Kentucky Employees Retirement System and the County Employees Retirement System who began participating on or after January 1, 2014 (Tier 3), retirement is allowed only at age 57 or older when age plus years of service equal 87 (the Rule of 87), or at age 65 with at least 60 months of service credit. Tier 3 has no early or reduced retirement benefit. Tier 3 members with at least 60 months of service credit are vested.
Tier 3 retirement rules
“Under Tier 3, a member is not eligible to retire unless one of two requirements are met. There are no early or reduced retirement benefits.” The two requirements: “Age 57 or older, if the member’s age and years of service equal 87 (Rule of 87).” “Age 65 with at least 60 months of service credit.”
Vesting
“Tier 3 members with at least 60 months of service credit are vested and will receive employer pay credits and any associated upside sharing interest.”
How a Tier 3 benefit is paid
The plan description explains: “A Tier 3 member’s accumulated account balance is divided by an actuarial factor to produce the monthly life annuity option”.
Tier 2 in brief
For participation dates from September 1, 2008 to December 31, 2013, the plan description says: “A nonhazardous member, age 57 or older, may retire with no reduction in benefits if the member’s age and years of service equal 87 (Rule of 87).” It adds: “A nonhazardous member, age 60 or older, with at least 120 months of service credit may retire with a reduction in benefits.” Its example: “For Example: A nonhazardous member has 10 years of service and is age 60. If the member chooses to retire, their benefit will be reduced to 67.5% (6.5% for each year away from age 65).” The plan description also lets Tier 2 members opt into Tier 3, and those who do are subject to the Tier 3 rules.
Tier 1 in brief
For participation before September 1, 2008: “A nonhazardous member with 27 or more years of service credit can retire at any time with no reduction in benefits.” It also says: “A nonhazardous member, age 55, with at least five years of service credit may retire with a reduction in benefits.” For a nonhazardous member, the plan description also gives age 65 or older with at least 48 months of service credit as an unreduced route, where Tier 2 and Tier 3 need 60 months.
What the documents do not say
Tier 3 is a cash balance plan, so there is no years-times-pay multiplier and this page gives no worked example. The Tier 1 and Tier 2 reduction charts are tables and are not copied, so only the plan description’s own 6.5% per year example is quoted. Hazardous members and the State Police Retirement System are not covered, and the Tier 1 benefit factors are not stated. One Kentucky Public Pensions Authority summary plan description covers both systems, and the eligibility rules shown do not differ between KERS and CERS for nonhazardous members. The description is revised December 2022 and was not re-checked against a later edition.
Common mistakes
- Reading 87 as an age. It is age plus years of service, and the member must also be 57 or older.
- Looking for a reduced benefit in Tier 3. The plan description says there are none.
- Applying these nonhazardous rules to hazardous members. The plan description lists other requirements for them.
Related: Kentucky KERS retirement decisions, the Kentucky KERS COLA for 2027, how public pension decisions work, and whether Kentucky taxes pensions.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about retirement income
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with retirement income
Considering financial advice? Request an adviser introduction with no obligation to hire.
The form is run by Kapitalwise, our advisor-matching partner. Requesting an introduction is free. Submitting the form shares your contact details with advisers, so expect calls and texts. Advisers pay for introductions. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you hire anyone. A match is not guaranteed.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Kentucky Public Pensions Authority, Summary Plan Description (KERS, CERS, SPRS): kyret.ky.gov
- Related official page (not quoted): IRS Tax Topic 410, Pensions and annuities: www.irs.gov
- Related official page (not quoted): IRS Tax Topic 411, Pensions: the General Rule and the Simplified Method: www.irs.gov
Read from the primary documents linked above on October 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.