AN ACT relating to the Kentucky Teachers' Retirement System.

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AN ACT relating to the Kentucky Teachers' Retirement System. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 161.520 is amended to read as follows: 3
Upon the death of an active contributing member or upon the death of a member retired 4
for disability, except as provided in KRS 161.661(6), the survivors of the deceased 5
member in the following named order, may elect to receive a survivor's benefit payable 6
as follows: 7
(1) Where there is a surviving widow or widower who is named as the primary 8
beneficiary of the member's retirement account, the benefit shall be: 9
(a) One hundred eighty dollars ($180) per month with no restriction on other 10
income; 11
(b) Two hundred forty dollars ($240) per month when the surviving widow or 12
widower's total income from all sources does not exceed six thousand six 13
hundred dollars ($6,600) per year or five hundred fifty dollars ($550) per 14
month; or 15
(c) If the deceased member has a minimum of ten (10) years of service credit 16
with the Teachers' Retirement System, the surviving widow or widower may 17
apply for an annuity actuarially equivalent to the annuity that would have 18
been paid to the deceased member when eligibility conditio ns were met. 19
Eligibility for payments would begin at the time the age of the deceased 20
member would have met the requirements of KRS 161.600(1) or (2), as 21
applicable. In exercising this right, the surviving widow or widower shall be 22
entitled to receive an a nnuity for life. This subsection applies to surviving 23
spouses of members who die on or after July 1, 1978. A surviving widow or 24
widower of a member who dies after July 1, 1978, shall be eligible for benefit 25
payments provided under paragraphs (a) and (b) of this subsection until they 26
begin receiving payments under this provision; 27
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(2) (a) Where there are surviving unmarried children under age eighteen (18) or 1
under age nineteen (19) if a full -time student in high school, the benefit shall 2
be two hundred dolla rs ($200) per month in the case of one (1) child, three 3
hundred forty dollars ($340) per month in the case of two (2) children, four 4
hundred dollars ($400) per month in the case of three (3) children, and four 5
hundred forty dollars ($440) per month in the case of four (4) or more 6
children. Benefits under this subsection shall apply in addition to benefits 7
which may be payable under subsections (1) and (3) of this section. 8
(b) Notwithstanding any provision of law to the contrary, the surviving spouse 9
may elect to receive a lump-sum refund of the member's accumulated account 10
balance in lieu of the survivorship benefits payable under this subsection and 11
subsection (1) of this section only if the surviving spouse is designated as the 12
primary beneficiary and: 13
1. Is a biological or adoptive parent of all children eligible for a benefit 14
under this subsection and has not had his or her parental rights 15
terminated; or 16
2. Has been appointed as legal guardian of all of the children eligible under 17
paragraph (a) of this subsection. 18
(c) To elect a lump -sum refund of the member's accumulated account balance 19
under paragraph (b) of this subsection, the surviving spouse who is designated 20
as the primary beneficiary must sign a waiver on forms prescribed by the 21
retirement system of his or her rights and the member's children's rights to the 22
survivorship benefits payable under this subsection and subsection (1) of this 23
section. The surviving spouse shall not waive the survivorship benefits 24
available under this subsection or subsections (1) and (6) of this section if any 25
of the member's children have attained age eighteen (18) or older unless all of 26
those children consent in writing on forms prescribed by the retirement 27
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system to waive their survivorship benefits available under this subsection; 1
(3) (a) Where the survivor is a child age eighteen (18) or older whose mental or 2
physical condition is sufficient to cause his or her dependency on the deceased 3
member at the time of the member's death, the benefit shall be two hundred 4
dollars ($200) per month, payable for the life of the child or until the time as 5
the mental or physical condition creating the dependency no longer exists or 6
the child marries. The mental or physical condition of the adult child shall be 7
revealed by a competent ex amination by a licensed physician [ and shall be 8
approved by a majority of a medical review committee as defined in KRS 9
161.661(14)]. Benefits under this subsection shall apply in addition to benefits 10
which may be payable under subsections (1) and (2) of this section. 11
(b) Notwithstanding any provision of law to the contrary, the surviving spouse 12
shall not elect to receive a lump -sum refund of the member's accumulated 13
account balance in lieu of the survivorship benefits payable under this 14
subsection and subsection (1) of this section unless: 15
1. The surviving spouse is designated as the primary beneficiary; 16
2. The surviving spouse has been appointed by the court as guardian, 17
conservator, or other fiduciary with sufficient general or specific 18
authority to waive the survivorship benefits available under this 19
subsection for any child or children age eighteen (18) or older who have 20
been adjudicated incompetent to make decisions on their own behalf by 21
a court of law; and 22
3. Any child or children age eighteen (18) or older who are mentally 23
competent to make decisions on their own behalf consent in writing on 24
forms prescribed by the retirement system to waive their survivorship 25
benefits available under this subsection. 26
(c) If eligible to elect a lump -sum refund of the m ember's accumulated account 27
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balance, the surviving spouse shall sign a waiver on forms prescribed by the 1
retirement system of his or her rights and the member's children's rights to the 2
survivorship benefits payable under this subsection and subsections (1 ) and 3
(2) of this section; 4
(4) Where the sole eligible survivors are dependent parents aged sixty-five (65) or over, 5
the benefit shall be two hundred dollars ($200) per month for one (1) parent or two 6
hundred ninety dollars ($290) per month for two (2) par ents. Dependency of a 7
parent shall be established as of the date of the death of the member; 8
(5) Where the sole eligible survivor is a dependent brother or sister, the benefit shall be 9
one hundred sixty five dollars ($165) per month. In order to qualify, t he brother or 10
sister must have been a resident of the deceased member's household for at least 11
one (1) full year prior to the member's death or must have been receiving care in a 12
hospital, nursing home, or other institution at the member's expense for same 13
period; 14
(6) The benefit to a child as defined in subsection (2) of this section shall terminate 15
upon the attainment of age eighteen (18) or upon reaching age nineteen (19), if a 16
full-time student in high school, or upon marriage, except that benefits shal l 17
continue until the attainment of age twenty-three (23) for an unmarried child who is 18
a full -time student in a recognized educational program beyond the high school 19
level. The benefit to a dependent parent or dependent brother or sister or dependent 20
child age eighteen (18) or older shall terminate upon marriage, or upon termination 21
of the condition creating the dependency; 22
(7) The board of trustees shall be the sole judge of eligibility or dependency of any 23
beneficiary, and may require formal application or information relating to eligibility 24
or dependency, including proof of annual income satisfactory to the board. The 25
board of trustees may subpoena records and individuals whenever it deems this 26
action necessary; 27
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(8) No payment of benefits shall be made un less the board of trustees authorizes the 1
payment. The board shall promulgate administrative regulations for the 2
administration of the provisions in this section and in every case the decision of the 3
board of trustees shall be final as to eligibility, depe ndency, or disability, and the 4
amount of benefits payable; 5
(9) In the event that there are no eligible survivors as defined in subsections (1) to (5) 6
of this section, or in the event that the surviving spouse elects not to receive 7
survivorship benefits on his or her own behalf or on behalf of any of the member's 8
children as permitted under subsections (2) and (3) of this section, the board of 9
trustees shall pay to the estate or the designated beneficiaries of the deceased 10
member a refund of his or her accum ulated account balance as provided in KRS 11
161.470(7). If the benefits paid or payable under subsections (1) to (5) of this 12
section and KRS 161.661 shall amount to a sum less than the member's 13
accumulated account balance at the time of death, the board of t rustees shall pay to 14
the estate or designated beneficiaries of the deceased member the balance of the 15
accumulated account balance; 16
(10) Any person who is receiving benefits and becomes disqualified from receiving 17
those benefits under this section shall imm ediately notify the Teachers' Retirement 18
System of this disqualification in writing and shall return all benefits paid after the 19
date of disqualification. Failure to comply with these provisions shall create an 20
indebtedness of that person to the Teachers' Retirement System. Interest at the rate 21
of eight percent (8%) per annum shall be charged if the debt is not repaid within 22
sixty (60) days after the date of disqualification. Failure to repay this debt creates a 23
lien in favor of the Teachers' Retirement Sys tem upon all property of the person 24
who improperly receives benefits and does not repay those benefits; and 25
(11) Benefits under subsections (2) and (3) of this section shall apply to a child who is a 26
legally adopted survivor at the time of the death of the member. This provision shall 27
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be retroactive to include a child who was born after January 1, 1990, and is a legally 1
adopted survivor of a member whose death occurred prior to July 15, 2008. 2
Section 2. KRS 161.605 is amended to read as follows: 3
Any member retired by reason of service may return to work in a position covered by the 4
Kentucky Teachers' Retirement System and continue to receive his or her retirement 5
allowance under the following conditions: 6
(1) Any member who is retired with thirty (30) or more years of service may return to 7
work in a full -time or a part -time position, or in a position providing substitute 8
teaching service, covered by the Teachers' Retirement System and earn up to a 9
maximum of seventy-five percent (75%) of the member's last annual compensation 10
measured on a daily rate to be determined by the board of trustees. For purposes of 11
determining whether the salary of a member returning to work is seventy -five 12
percent (75%) or less of the member's last annual compensation, all remuneration 13
paid and benefits provided to the member, on an actual dollar or fair market value 14
basis as determined by the retirement system, excluding employer-provided medical 15
insurance required under subsection (4) of this secti on, shall be considered. 16
Members who were retired on or before June 30, 2002, shall be entitled to return to 17
work under the provisions of this section as if they had retired with thirty (30) years 18
of service. Nonqualified service credit purchased under the provisions of KRS 19
161.5465 or elsewhere with any state -administered retirement system shall not be 20
used to meet the thirty (30) year requirement set forth in this subsection. Out -of 21
state teaching service provided in public schools for kindergarten throug h grade 22
twelve (12) may count toward the thirty (30) year requirement set forth in this 23
subsection even if it is not purchased as service credit, if the member obtains from 24
his or her out -of-state employer certification of this service on forms prescribed by 25
the retirement system; 26
(2) Any member who is retired with less than thirty (30) years of service after June 30, 27
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2002, may return to work in a full -time or part -time position, or in a position 1
providing substitute teaching service, covered by the Teacher s' Retirement System 2
and earn up to a maximum of sixty -five percent (65%) of the member's last annual 3
compensation measured on a daily rate to be determined by the board of trustees. 4
For purposes of determining whether the salary of a member returning to w ork is 5
sixty-five percent (65%) or less of the member's last annual compensation, all 6
remuneration paid and benefits provided to the member, on an actual dollar or fair 7
market value basis as determined by the retirement system, excluding employer -8
provided medical insurance required under subsection (4) of this section, shall be 9
considered; 10
(3) Under this section, an employer may employ full-time a number of retired members 11
not to exceed ten percent (10%) of the membership actively employed full -time by 12
that employer. The board of trustees may reduce this ten percent (10%) cap upon 13
recommendation of the retirement system's actuary if a reduction is necessary to 14
maintain the actuarial soundness of the retirement system. The board of trustees 15
may increase the ten percent (10%) cap upon a determination that an increase is 16
warranted to help address a shortage in the number of available teachers and upon 17
the determination of the retirement system's actuary that the proposed cap increase 18
allows the actuarial soundness of the retirement system to be maintained. For 19
purposes of this subsection, "full -time" means the same as defined by KRS 20
161.220(21). A local school district may exceed the quota established by this 21
subsection by making an annual written request to the Kentucky Department of 22
Education which the department may approve on a year-by-year basis; 23
(4) (a) Except as provided by subsection (9) of this section, a retired member 24
returning to work in a full -time or part -time position, or in a position 25
providing substitute teaching service [,] under subsection (1) or (2) of this 26
section, shall contribute to an account with the retirement system that shall be 27
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administered independently from and with no reciprocal impact with the 1
member's original retirement account, or any other account from which the 2
member is eligible to draw a retirement allowance. 3
(b) Except as provided by subsection (9) of this section, a retired member 4
returning to work under subsection (1) or (2) of this section shall make 5
contributions to the retirement system at the rate provided under KRS 6
161.540. The new account shall independentl y meet all vesting requirements 7
as well as all other conditions set forth in KRS 161.600(1) or (2), as 8
applicable, before any retirement allowance is payable from this account. The 9
retirement allowance accruing under this new account shall be calculated 10
pursuant to KRS 161.620. This new account shall not entitle the member to a 11
duplication of the benefits offered under KRS 161.620(7) or 161.675, nor 12
shall this new account provide the benefits offered by KRS 161.520, 161.525, 13
161.620(3), 161.655, 161.661, or 161.663. 14
(c) A retired member returning to work for an employer that participates in a 15
state-administered retirement system [ under subsection (1) or (2) of this 16
section] shall waive his or her medical insurance with the Teachers' 17
Retirement System during the period of reemployment and shall receive the 18
medical insurance coverage that is offered by the member's active employer [ 19
that is generally provided by the member's active employer to the other 20
members of the retirement system that the active employer e mploys]. If 21
medical insurance coverage is not available from the employer, the Kentucky 22
Teachers' Retirement System may provide coverage for the member. 23
(d) A retired member returning to work under subsection (1) or (2) of this section 24
shall not be eligibl e to purchase service credit for any service provided after 25
the member's effective date of retirement but prior to the date that the member 26
returns to work. A member returning to work under subsection (1) or (2) of 27
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this section shall not be eligible to pur chase service credit that the member 1
would have otherwise been eligible to purchase prior to the member's initial 2
retirement. 3
(e) A retired member who returns to work under subsection (1) or (2) of this 4
section, or in the event of the death of the member, the member's estate or 5
applicably designated beneficiary, shall be entitled, within ninety (90) days of 6
the posting of the annual report submitted by the employer, to a refund of 7
contributions as permitted and limited by KRS 161.470; 8
(5) The board of trust ees may annually, on July 1, adjust the current daily rate of a 9
member's last annual compensation, for each full twelve (12) month period that has 10
elapsed subsequent to the member earning his or her last annual compensation, by 11
the percentage increase in t he annual average of the consumer price index for all 12
urban consumers for the calendar year preceding the adjustment as published by the 13
Federal Bureau of Labor Statistics, not to exceed five percent (5%) annually. Each 14
annual adjustment shall become part of the member's daily rate base. Failure to 15
comply with the salary limitations set forth in subsections (1) and (2) of this section 16
as may be adjusted by this subsection shall result in a reduction of the member's 17
retirement allowance or any other benefit to which the member would otherwise be 18
entitled on a dollar -for-dollar basis for each dollar that the member exceeds these 19
salary limitations, and the member shall be refunded his or her retirement 20
contributions made on the compensation that exceeds these salary limitations. 21
Notwithstanding any other provision of law to the contrary, a member retiring from 22
a local school district who returns to work for a local school district under 23
subsection (1) or (2) of this section shall be entitled, without any reduct ion to his or 24
her retirement allowance or any other retirement benefit, to earn a minimum 25
amount equal to two[one] hundred [seventy ]dollars ($200)[($170)] per day; 26
(6) (a) A retired member returning to work under subsection (1) or (2) of this section 27
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shall have separated from service for a period of at least one (1) year if 1
returning to work for the same employer on a full-time basis, and at least three 2
(3) months if returning to work for a different employer on a full -time basis. 3
A retired member returning to work under subsection (1) or (2) of this section 4
on a part -time basis shall have separated from service for a period of at least 5
three (3) months before returning to work for any employer. 6
(b) [As an alternative to the separation -from-service requirem ents in paragraph 7
(a) of this subsection, a retired member who is returning to work for the same 8
employer in a full -time position under subsections (1) and (2) of this section 9
may elect a separation -from-service of not less than two (2) months followed 10
by a forfeiture of the retired member's retirement allowance on a month -to-11
month basis for each month that the member has separated from service for 12
less than twelve (12) full months. A retired member returning to work for the 13
same employer in a part -time position, or for a different employer in a full -14
time position, may elect an alternative separation -from-service requirement of 15
at least two (2) months followed by a forfeiture of the member's retirement 16
allowance for one (1) month. During the period that the member forfeits his or 17
her retirement allowance and thereafter, member and employer contributions 18
shall be made to the retirement system as a result of employment in any 19
position subject to membership in the retirement system. The member shall 20
contribute to an account with the retirement system subject to the conditions 21
set forth in subsection (4) of this section. 22
(c) ]A retired member who is returning to work for an employer that has 23
employees who participate in the Teachers' Retirement System shall comply 24
with the separation -from-service requirements in this subsection before 25
performing any service for the employer, regardless of whether the retired 26
member is providing service in a position covered by the Teachers' 27
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Retirement System. 1
(c)[(d)] The starting date for any separation from service required under this 2
subsection shall be the effective date of the member's retirement. 3
(d)[(e) ] The separation-from-service requirements of this subsection are not met 4
if there is a prearranged agreement between the me mber and an employer that 5
has employees who participate in the Teachers' Retirement System prior to 6
retirement for the member to work for the employer after retirement. 7
(e)[(f)] The Teachers' Retirement System may require the member and the 8
employer for which the member is returning to work to certify in writing on a 9
form prescribed by the Teachers' Retirement System that no prearranged 10
agreement was or will be entered into between the member and employer 11
prior to retirement for the member to work for the employer after retirement. 12
(f)[(g)] Failure to comply with the separation -from-service requirements in this 13
subsection voids a member's retirement and the member shall be required to 14
return all the retirement benefits he or she received, with interest, for the 15
period of time that the member returned to work without a sufficient 16
separation from service; 17
(7) (a) Effective July 1, 2004, local school districts may employ retired members in 18
full-time or part -time teaching or administrative positions in critical s hortage 19
areas without limitation on the compensation of the retired members that is 20
otherwise required by subsections (1) and (2) of this section. The number of 21
retired members that a local school district may employ under this subsection 22
shall be no more than four (4) members per local school district or ten percent 23
(10%) of the total active members employed by the local school district on a 24
full-time basis as defined under KRS 161.220(21), whichever number is 25
greater. Retired members returning to work und er this subsection shall be 26
subject to the separation-from-service requirements set forth in subsection (6) 27
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of this section. Retired members returning to work under this subsection shall 1
waive their medical insurance coverage with the retirement system dur ing 2
their period of reemployment and receive medical insurance coverage that is 3
offered by the member's active employer [offered to other full -time members 4
employed by the local school district] . Retired members returning to work 5
under this subsection shall contribute to an account subject to the conditions 6
set forth in subsection (4) of this section. Retired members returning to work 7
under this subsection shall make contributions to the retirement system at the 8
rate provided under KRS 161.540. The employer shall make contributions at 9
the rate provided under KRS 161.550. Local school districts shall make 10
annual payments to the retirement system on the compensation paid to the 11
reemployed retirees at the rates determined by the retirement system's actuary 12
that reflect any accrued liability resulting from the reemployment of these 13
members. 14
(b) The Department of Education may employ retired members in full -time or 15
part-time teaching or nonteaching positions without the limitations on 16
compensation otherwise required by subsections (1) and (2) of this section to 17
fill critical shortage areas in the schools it operates, including the Kentucky 18
School for the Blind and the Kentucky School for the Deaf, and to serve on 19
audit teams. The department shall be subject to the same requirements as local 20
school districts as provided in paragraph (a) of this subsection, except the 21
Teachers' Retirement System shall determine the maximum number of 22
employees that may be employed under this paragraph; 23
(8) The return -to-work limitations set forth in this section shall apply to retired 24
members who are returning to work in the same position from which they retired, or 25
a position substantially similar to the one from which they retired, or a position 26
described in KRS 161.046 or any position listed in KRS 161.220(4) which requires 27
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membership in the retirement system. Positions which generally require 1
certification or graduation from a four (4) year college or university as a condition 2
of employment which are created, or changed to remove the position from coverage 3
under KRS 161.220(4) are also subject to the return to work limitations set forth in 4
this section. The board of trustees shall determine whether employment in a 5
nonteaching position is subject to this subsection; 6
(9) (a) Notwithstanding the provisions of this section, individuals who become 7
members on or after January 1, 2022, who subsequently retire and begin 8
drawing a monthly lifetime retirement allowance from the Teachers' 9
Retirement System, who following retirement are reemployed with an 10
employer participating in the Teachers' Retirement System, shall not be 11
eligible to contribute to or earn benefits in a second retirement account in the 12
Teachers' Retirement System during the period of reemployment. 13
(b) The provisions of subsections (1) to (7) of this section are not subject to KRS 14
161.714; 15
(10) Retired members may be employed in a part -time teaching capacity by an agency 16
described in KRS 161.220(4)(b) or (n), not to exceed the equivalent of twelve (12) 17
teaching hours in any one (1) fiscal year. Retired members may be employed for a 18
period not to exceed the equivalent of one hundred (100) days in any one (1) fiscal 19
year in a part -time administrative or nonteaching capacity by an agency described 20
in KRS 161.220(4)(b) or (n) in a posit ion that would otherwise be covered by the 21
retirement system. Except as otherwise provided by this subsection, the return to 22
work provisions set forth in subsections (1) to (7) of this section shall not apply to 23
retired members who return to work solely fo r an agency described in KRS 24
161.220(4)(b) or (n). Calculation of the number of days and teaching hours for part -25
time teaching, substitute teaching, or part -time employment in a nonteaching 26
capacity under this section shall not exceed the ratio between a s chool year and the 27
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actual months of retirement for the member during that school year. The board of 1
trustees by administrative regulation may establish fractional equivalents of a day 2
of teaching service. Any member who exceeds the twelve (12) hour or one hundred 3
(100) day limitations of this subsection shall be subject to having his or her 4
retirement voided and be required to return all retirement allowances and other 5
benefits paid to the member or on the member's behalf since the effective date of 6
retirement. In lieu of voiding a member's retirement, the system may reduce the 7
member's retirement allowance or any other benefit to which the member would 8
otherwise be entitled on a dollar -for-dollar basis for each dollar of compensation 9
that the member earns i n employment exceeding twelve (12) hours, one hundred 10
(100) days, or any apportionment of the two (2) combined. Retired members 11
returning to work for an employer described in KRS 161.220(4)(b) or (n) shall 12
comply with the separation -from-service requiremen ts of subsection (6) of this 13
section; 14
(11) When a retired member returns to employment in a part -time teaching capacity or 15
in a nonteaching capacity as provided in subsection (10) of this section, the 16
employer shall contribute annually to the retirement sy stem on the compensation 17
paid to the retired member at rates determined by the retirement system actuary that 18
reflect accrued liability for retired members who return to work under subsection 19
(10) of this section; and 20
(12) For retired members who return to work during any one (1) fiscal year in both a 21
position described in KRS 161.220(4)(b) or (n) and in a position described under 22
another provision under KRS 161.220(4), and for retired members who return to 23
work in a position described under KRS 161.220(4)(b) or (n) in both a teaching and 24
an administrative or nonteaching capacity, the board of trustees shall adopt a 25
methodology for a pro rata apportionment of days and hours that the retired 26
member may work in each position. 27
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(13) Notwithstanding any other provision of KRS 161.220 to 161.716 to the contrary, an 1
annuitant who has returned to work following retirement with an employer that 2
does not participate in the state -administered retirement systems shall not be 3
required to take health insurance coverage thr ough the employer and the system 4
shall continue to provide health insurance coverage and benefits to the annuitant 5
during the period of employment, except as may be required by the Medicare 6
Secondary Payer Act under 42 U.S.C. sec. 1395y(b). 7
(14) Any member retired by reason of service may waive his or her annuity and return 8
to full-time employment in a Teachers' Retirement System-covered position that is 9
on the certified salary schedule under the following conditions: 10
(a) The member shall: 11
1. Receive no ann uity payments while employed in a full -time position 12
described in this subsection; 13
2. Make contributions on the salaries received for the service in a full -14
time position; 15
3. If employed for at least one (1) consecutive contract year in a full -time 16
position, have his or her retirement annuity recalculated as provided 17
in the regular retirement formula in subsection (1) of Section 4 of this 18
Act, except that, regardless of salarie s earned during waiver, a 19
monthly retirement allowance recalculated under this paragraph shall 20
not be increased by more than ten percent (10%) per full contract year 21
of waiver worked or a prorated percentage for a year during waiver 22
when less than a full c ontract year was worked. The recalculated 23
retirement allowance shall be less any applicable actuarial discount 24
applied to the original retirement allowance due to the election of a 25
joint and last survivor option; and 26
4. Waive his or her medical insurance c overage with the Teachers' 27
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Retirement System during the period of reemployment and instead 1
shall receive the medical insurance coverage that is generally offered 2
by the member's active employer; 3
(b) 1. The member's estate or, if there is a beneficiary appl icably designated 4
by the member, then the beneficiary, shall continue to be eligible for 5
life insurance benefits as provided in KRS 161.655. 6
2. Retirement option, plan account type, and beneficiary designation on 7
original retirement shall not be altered by postretirement employment 8
under this subsection, and dependents and spouses of the members 9
shall not become eligible for benefits under KRS 161.525 or 161.661 10
or Section 1 of this Act due to postretirement employment; 11
(c) 1. When a member returns to a ful l-time position described in this 12
subsection and as provided in paragraph (a) of this subsection, the 13
employer is required to withhold and remit regular retirement 14
contributions. 15
2. The member shall be returned to the annuity rolls on July 1 following 16
completion of the contract year or on the first day of the month 17
following the month of termination of service. A member shall not be 18
returned to the annuity rolls until after he or she has filed a retirement 19
application in compliance with KRS 161.600(6). Any discounts applied 20
at the time of the original retirement due to service or age may be 21
reduced or eliminated in the recalculation subject to the ten percent 22
(10%) cap in paragraph (a) of this subsection; and 23
(d) A member retired by reason of service who has been employed the 24
equivalent of twenty -five (25) days or more during a school year under 25
Section 2 of this Act may waive the member's retirement annuity and return 26
to a position described in this subsection during that school year a 27
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maximum of one (1) tim e during any five (5) year period, beginning with 1
that school year. 2
Section 3. KRS 161.608 is amended to read as follows: 3
The provisions of KRS 61.680 are hereby recognized and shall be followed in 4
calculating[computing] benefits of any member of the Teachers' Retirement System who 5
also has an account with the Kentucky Employees Retirement System, County 6
Employees Retirement System, or State Police Retirement System. The benefits shall be 7
calculated using a membership date as follows: 8
(1) Teachers' Retirement System shall use the other state -administered retirement 9
systems' membership entry date to establish eligibility for an d participation in 10
benefits if it is the earlier membership entry date between the systems, and this 11
date shall not be subsequently changed once entered in the member's record; and 12
(2) For individuals who begin participation in the Teacher's Retirement System on or 13
after July 1, 2026, service subsequently reinstated or established in another 14
system for an earlier period or date shall not change the individual's continued 15
participation in the Teachers' Retirement System account type in which they 16
participated prior to the reinstatement. 17
Section 4. KRS 161.620 is amended to read as follows: 18
(1) The retirement allowance, in the form of a life annuity with refundable balance, of a 19
member retiring for service shall be calculated as follows: 20
(a) For retirements effective July 1, 1998, and thereafter, except as otherwise 21
provided by this section, the annual allowance for each year of service shall 22
be two percent (2%) of the final average salary for service performed prior to 23
July 1, 1983, and two and one -half percent (2.5%) of the final average salary 24
for service performed after July 1, 1983, for all nonuniversity members. 25
Except as otherwise provided by this section, the annual retirement allowance 26
for each year of service perform ed by members of the Teachers' Retirement 27
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System who are university members shall be two percent (2%) of the final 1
average salary. Actuarial discounts due to age or service credit at retirement 2
may be applied as provided in this section; 3
(b) For individual s who become nonuniversity members of the Teachers' 4
Retirement System on or after July 1, 2002, and before July 1, 2008, who 5
upon retirement have earned less than ten (10) full years of service credit, the 6
retirement allowance shall be two percent (2%) of the member's final average 7
salary for each year of service. For individuals who become nonuniversity 8
members of the Teachers' Retirement System on or after July 1, 2002, and 9
before July 1, 2008, and who upon retirement have earned at least ten (10) full 10
years of service credit, the annual allowance for each year of service shall be 11
two and one-half percent (2.5%) of the member's final average salary; 12
(c) The board of trustees may approve for members who initially retire on or after 13
July 1, 2004, and who bec ome nonuniversity members before July 1, 2008, a 14
retirement allowance of three percent (3%) of the member's final average 15
salary for each year or partial year of service credit earned in excess of thirty 16
(30) years. This three percent (3%) factor shall be in lieu of the two and one -17
half percent (2.5%) factor provided for in paragraph (b) of this subsection for 18
every year or fraction of a year of service in excess of thirty (30) years. Upon 19
approval of this three percent (3%) retirement factor, the board of trustees 20
may establish conditions of eligibility regarding the type of service credit that 21
will qualify for meeting the requirements of this subsection. This subsection is 22
optional with the board of trustees and shall not be subject to KRS 161.714; 23
(d) For individuals who become nonuniversity members of the Teachers' 24
Retirement System on or after July 1, 2008, but prior to January 1, 2022, the 25
retirement allowance shall be: 26
1. a. One and seven -tenths percent (1.7%) of the member's final 27
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average salary for each year of service if the member has earned 1
ten (10) or less years of service at retirement; 2
b. Two percent (2%) of the member's final average salary for each 3
year of service if the member has earned greater than ten (10) but 4
no more than twenty (20) years of service at retirement; 5
c. Two and three-tenths percent (2.3%) of the member's final average 6
salary for each year of service if the member has earned greater 7
than twenty (20) but no more than twenty -six (26) years of service 8
at retirement; or 9
d. Two a nd one -half percent (2.5%) of the member's final average 10
salary for each year of service if the member has earned greater 11
than twenty-six (26) but no more than thirty (30) years of service 12
at retirement; and 13
2. Three percent (3%) of the member's final average salary for each year or 14
partial year of service earned in excess of thirty (30) years of service at 15
retirement subject to the same terms and conditions as set forth in 16
paragraph (c) of this subsection; 17
(e) For individuals who become university members of the Teachers' Retirement 18
System on or after July 1, 2008, but prior to January 1, 2022, the retirement 19
allowance shall be: 20
1. One and one -half percent (1.5%) of the member's final average salary 21
for each year of service if the member has earned ten (10) or less years 22
of service at retirement; 23
2. One and seven -tenths percent (1.7%) of the member's final average 24
salary for each year of service if the member has earned greater than ten 25
(10) but no more than twenty (20) years of service at retirement; 26
3. One and eighty -five hundredths percent (1.85%) of the member's final 27
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average salary for each year of service if the member has earned greater 1
than twenty (20) but less than twenty -seven (27) years of service at 2
retirement; or 3
4. Two percent (2%) of the member's final average salary for each year of 4
service if the member has earned twenty -seven (27) or more years of 5
service at retirement; 6
(f) For individuals who become nonuniversity members of the Teachers' 7
Retirement System on or after January 1, 2022, the retirement allowance shall, 8
except as adjusted by the board pursuant to KRS 161.633, be the following 9
percentage of the member's final average salary for each year of service: 10
1. One and seven -tenths percent (1.7% ), which shall be increased 11
incrementally each month the member's age at retirement is greater than 12
sixty (60) so that the incremental increase is four one -hundredths of one 13
percent (0.04%) for each complete additional year of age at retirement in 14
excess of sixty (60), not to exceed a value of one and nine-tenths percent 15
(1.9%) at age sixty-five (65) or greater; plus 16
2. a. One-quarter of one percent (0.25%), if the member has earned at 17
least twenty (20) but less than thirty (30) years of service at 18
retirement; or 19
b. One-half of one percent (0.50%), if the member has earned thirty 20
(30) or more years of service at retirement; 21
(g) For individuals who become university members of the Teachers' Retirement 22
System on or after January 1, 2022, the retirement allowan ce shall, except as 23
adjusted by the board pursuant to KRS 161.634, be the following percentage 24
of the member's final average salary for each year of service: 25
1. Seven-tenths of one percent (0.7%), which shall be increased 26
incrementally each month the member's age at retirement is greater than 27
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sixty (60) so that the incremental increase is four one -hundredths of one 1
percent (0.04%) for each complete additional year of age in excess of 2
sixty (60), not to exceed a value of nine -tenths of one percent (0.9%) at 3
age sixty-five (65) or greater; plus 4
2. a. One-quarter of one percent (0.25%), if the member has earned at 5
least twenty (20) but less than thirty (30) years of service at 6
retirement; or 7
b. One-half of one percent (0.50%), if the member has earned thirty 8
(30) or more years of service at retirement; and 9
(h) The retirement allowance of a member at retirement, as measured on a life 10
annuity, shall not exceed the member's last yearly salary or the member's final 11
average salary, whichever is the greater amount. Fo r purposes of this section, 12
"yearly salary" means the compensation earned by a member during the most 13
recent period of contributing service, either consecutive or nonconsecutive, 14
preceding the member's effective retirement date and shall be subject to the 15
provisions of KRS 161.220(9) and (10). This paragraph shall not apply to the 16
supplemental benefit component. 17
(2) Effective July 1, 2002, and annually on July 1 thereafter, the retirement allowance 18
of each retired member and of each beneficiary of a retire ment option shall be 19
increased in the amount of one and one -half percent (1.5%), provided the retired 20
member had been retired for at least the full twelve (12) months immediately 21
preceding the date that the increase is effective. In the event that the reti red member 22
had been retired for less than the full twelve (12) months immediately preceding the 23
date that the increase is effective, then the increase shall be reduced on a pro rata 24
basis by each month that the retired member had not been retired for the f ull twelve 25
(12) months immediately preceding the effective date of the increase. This 26
subsection shall not apply to benefits from the supplemental benefit component, and 27
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the board may adjust this value for individuals who become members on or after 1
January 1, 2022, as provided by KRS 161.633 or 161.634, as applicable. 2
(3) Any member qualifying for retirement under a life annuity with refundable balance 3
shall be entitled to receive an annual allowance amounting to not less than four 4
hundred dollars ($400) ef fective July 1, 2002, and not less than four hundred forty 5
dollars ($440) effective July 1, 2003, multiplied by the service credit years of the 6
member. These minimums shall apply to the retired members receiving annuity 7
payments and to those members retiri ng on or subsequent to the effective dates 8
listed in this subsection, except the following: 9
(a) Individuals who become members of the Teachers' Retirement System on or 10
after July 1, 2008; or 11
(b) Members whose retirement allowance payment is reduced below t he 12
minimum allowance as a result of its division in a qualified domestic relations 13
order or any other provision permitted under KRS 161.700. 14
(4) The minimum retirement allowance provided in this section shall apply in the case 15
of members retired or retirin g under an option other than a life annuity with 16
refundable balance in the same proportion to the benefits of the member and his or 17
her beneficiary or beneficiaries as provided in the duly -adopted option tables at the 18
time of the member's retirement. 19
(5) Effective July 1, 2008, the monthly allowance of each retired member and each 20
recipient of a retirement option of the retired member may be increased in an 21
amount not to exceed three and one -half percent (3.5%) of the monthly allowance 22
in effect the previou s month, provided the retired member had been retired for at 23
least the full twelve (12) months immediately preceding the date that the increase is 24
effective. In the event that the retired member had been retired for less than the full 25
twelve (12) months im mediately preceding the date that the increase is effective, 26
then the increase shall be reduced on a pro rata basis by each month that the retired 27
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member had not been retired for the full twelve (12) months immediately preceding 1
the effective date of the i ncrease. The level of increase provided for in this 2
subsection shall be determined by the funding provided in the 2008 -2010 biennium 3
budget appropriation. 4
(6) Effective July 1, 2009, the monthly allowance of each retired member and each 5
recipient of a reti rement option of the retired member may be increased in an 6
amount not to exceed seven -tenths of one percent (0.7%) of the monthly allowance 7
in effect the previous month, provided the retired member had been retired for at 8
least the full twelve (12) months immediately preceding the date that the increase is 9
effective. In the event that the retired member had been retired for less than the full 10
twelve (12) months immediately preceding the date that the increase is effective, 11
then the increase shall be reduced on a pro rata basis by each month that the retired 12
member had not been retired for the full twelve (12) months immediately preceding 13
the effective date of the increase. The level of increase provided for in this 14
subsection shall be determined by the fundi ng provided in the 2008 -2010 biennium 15
budget appropriation. 16
(7) Effective July 1, 1990, monthly payments of two hundred dollars ($200) shall be 17
payable for the benefit of an adult child of a member retired for service when the 18
child's mental or physical co ndition is sufficient to cause dependency on the 19
member at the time of retirement. Eligibility for this payment shall continue for the 20
life of the child or until the time the mental or physical condition creating the 21
dependency no longer exists or the chil d marries. Benefits under this subsection 22
shall apply to legally adopted survivors provided the proceedings for the adoption 23
were initiated at least one (1) year prior to the death of the member. The board of 24
trustees shall be the sole judge of eligibility or dependency and may require formal 25
application or information relating thereto. This payment may be applied for and 26
managed by the parent who is the retired member without necessity of court order 27
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or other legal authority. 1
(8) Members of the Teachers' Retirement System shall be subject to the annuity income 2
limitations imposed by Section 415 of the Internal Revenue Service Code. 3
(9) Compensation in excess of the limitations imposed by Section 401(a)(17) of the 4
Internal Revenue Code shall not be used in d etermining a member's retirement 5
annuity. The limitation on compensation for eligible members shall not be less than 6
the amount which was allowed to be taken into account by the retirement system in 7
effect on July 1, 1993. For this purpose, an eligible mem ber is an individual who 8
was a member of the retirement system before the first plan year beginning after 9
December 31, 1995. 10