Greetings KRTA Family,

As the 2026 General Assembly wrapped up work before the veto period, House Bill 500 made its way through both the House and Senate and is now headed to the Governor’s desk.

There’s some good news here for retirees.

The final budget fully funds both the TRS Pension Liability and the Health Insurance Trust Fund. While many state agencies saw cuts, lawmakers stayed committed to meeting pension obligations — and that’s something we are very thankful for. There also appears to be funding included for under-65 health insurance (KEHP), although the exact numbers are not yet clear.

The legislature will return on April 14 and 15 to review any vetoes and finalize remaining items. We’ll continue to watch things closely and keep you updated if anything changes.

On the federal side, there hasn’t been any movement on HR 7361, the “No Tax on Restored Benefits” bill. This proposal would eliminate taxes on certain Social Security lump sum payments tied to the Social Security Fairness Act. At this point, the bill remains in committee with very little support, and it does not appear likely to move forward before the April 15 tax deadline.

We are also continuing to monitor a few bills here in Kentucky that could impact retirees:

HB 183 would increase the tax exemption on retirement income from $31,110 to $41,110 beginning in 2027. While we strongly support this effort, it currently sits in committee and is not expected to move this session.

SB 51 proposes a constitutional amendment that would protect homeowners age 65 and older from increases in the assessed value of their primary residence. The bill passed the Senate unanimously and is now in the House. We support it, but it also appears unlikely to move forward this session.

HB 642 is a technical bill related to the Teachers’ Retirement System. It includes updates to return-to-work rules, pension waiver provisions for teaching positions, and other administrative changes. This bill has passed and is now awaiting the Governor’s signature, and we expect it to become law.

As always, we’ll continue to keep a close eye on these issues and share updates that matter to you.

If you’d like to stay informed between newsletters, be sure to visit our Legislative Resource Page and sign up for KRTA text alerts.

Thank you for staying engaged and informed.