KPPPA employer‑review branch reports $2.5M in findings and plans mandatory employer surveys and training

Mike Lamb described a newly formed employer compliance branch created in late 2025 and staffed in January 2026 to perform comprehensive reviews of employer payroll records and reporting for KRS/CERS employers. He said the branch obtains full employee listings, payroll records for the fiscal year under review, employer 941s, and written policies on leave and bonuses; some reviews include on‑site work where appropriate.

Lamb said three employers previously audited produced litigation and large dollar findings; the newly structured branch has completed a set of reviews this fiscal year that resulted in approximately $2.5 million in audit findings and bills to employers—while noting some reviews can also identify overpayments that require refunds. The branch has a risk‑based selection methodology (position type, member count, prior invoice history, tip lines, external audits) and will update the risk assessment quarterly.

KPPPA distributed an initial employer survey to 1,452 employers and received 163 responses; staff said it plans to require future surveys as part of monthly reporting. Training and a potential certification program for reporting officials were raised as top priorities to reduce future reporting errors.

“The term that was chosen for the level of work we are doing is a full comprehensive review of employer records,” Mike Lamb said. “This group is auditing the employee records of these employers.” Trustees discussed next steps, including employer education and possible sequencing of additional reviews as staff capacity allows.