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Overly restrictive employment contracts impact retirement

People in Kentucky and all around the country are living longer and healthier lives. One of the results of this is that people look to continue working longer, either for personal or financial reasons. Until recently, a person retired from working for the State of Kentucky risked losing retirement benefits if he or she did not comply with employment contracts that stipulated the terms of re-employment following retirement.

These rules were spelled out in a law that stated that if a person participating in Kentucky Retirement Systems (KRS) did not receive clearance to accept a new position, all retirement benefits paid to date could be forfeited. This would apply regardless of how long one had been retired, and it did not matter if one was returning to work in government or in the private sector. Approximately 8,500 re-employment requests are received annually by KRS, or about 40 per day. Delays in processing them could result in lost job opportunities for retirees.

An amendment to the old law was passed during the 2019 legislative session. The amendment states that as long as the person has been retired for at least a year, new employment can be secured without fear of losing previously paid benefits. In addition, a retiree no longer needs to apply for re-employment clearance.

Gainful employment provides a path to independence, self-worth and personal fulfillment. Overly restrictive employment contracts, such as what existed under the prior legislation, create an unreasonable barrier to enjoying a successful retirement for the citizens of Kentucky. If a person has questions regarding the new law, he or she may wish to seek the counsel of an attorney who is experienced in employment law.

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Green Chesnut & Hughes PLLC
201 E. Main St.
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Lexington, KY 40507

Phone: 859-475-1628
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