Updated September 3, 2026. Quick answer: Kentucky Employees Retirement System (KERS): the COLA is discretionary, and by statute only the General Assembly, not the KPPA or governing boards, can grant one, service credit can be purchased, and no DROP was found. Vesting takes 60 months of service credit under age 65 (48 months at 65 or older) for Tiers 1 and 2; Tier 3’s cash-balance plan vests at a flat 60 months.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Discretionary (General Assembly holds sole authority) |
|---|---|
| Is the COLA compounded? | Not stated |
| Vesting | 60 months (48 if age 65+) for Tiers 1&2; 60 months for Tier 3 |
| Buy service credit? | Yes |
| DROP? | None found |
| State | Kentucky |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original benefit forever, which is a materially worse deal than it sounds.
The COLA
“COLAs will only be granted if the CERS and KRS Boards determine that assets of the systems are greater than 100% of the actuarial liabilities and legislation authorizes the use of surplus funds for the COLA; or the General Assembly fully prefunds the COLA or directs the payment of funds in the year the COLA is provided… the Kentucky General Assembly (and not the CERS or KRS Boards, the KPPA, or the Governor) actually holds the authority to grant COLAs under Kentucky Revised Statutes 61.691 and 78.5518.” A separate, unrelated benefit (a 1.5% cumulative increase to the retiree health-insurance dollar contribution, not the pension check) should not be confused with this pension COLA.
Coordinate this with your overall retirement plan
An adviser can help weigh a COLA that may not compound, a service-credit purchase that may never pay for itself, or a DROP election against the rest of your retirement plan, but that does not replace the numbers in your own member statement.
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Buying service credit
KERS offers more than 30 purchase types under Tier 1 alone, including recontribution of refunded service, active-duty and National Guard/Reserve military service, delayed/past service, up to 10 years out-of-state service, up to 5 years non-qualified service (with 15 years total service required), omitted service, summer months for school employees, and sick-leave conversion. Cost formula: “Higher of Current Rate of Pay / Final Rate of Pay / Final Compensation * Actuarial Factor * Years Purchased”, with the actuarial factor varying by age, accrued credit, benefit factor and final compensation. Refunded-service repayment costs “the amount of contributions withdrawn plus interest calculated from the time of withdrawal.”
Run your own numbers before deciding: some purchases never recover their cost, and the calculator shows which.
Vesting
“In order to be vested, a member under the age of 65 must have at least 60 months of service credit in the systems operated by KPPA while a member over the age of 65 must have at least 48 months of service credit in the systems operated by KPPA.” Tier 3 (cash balance): “Once a member obtains 60 months of service credit, the member is considered vested”: no age-based reduction found for Tier 3.
DROP
No mention of “DROP” or “Deferred Retirement Option” appears in the Summary Plan Description, Tier 1 Guide, or Tier 3 Guide.
DROP is rarer than it appears across the systems on this site: most have none.
What could not be verified
REFUND TERMS: this page does not state what happens to your contributions if you take a refund instead of leaving your account with the system: that comparison was not independently researched for this system this session, and is left as an open gap rather than guessed from another system’s rule. Consult your own plan’s refund/forfeiture terms before deciding. Any additional field marked “not stated” in the verdicts table above was genuinely absent from the official materials read, not omitted for space.
Sources
Read September 3, 2026.
Related public pension systems: South Carolina SCRS · Alabama RSA.
General information drawn from each system’s own official published materials, not legal, tax or financial advice. Vesting, COLA and buyback rules are set by state statute and plan tier, differ materially by hire date, and can change by future legislation. This page cannot see your own member statement, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.