AN ACT relating to retirement benefits for employees participating in hazardous positions in the County Employees Retirement System.

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AN ACT relating to retirement benefits for employees participating in hazardous 1
positions in the County Employees Retirement System. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
SECTION 1. A NEW SECTION OF KRS 78.510 TO 78.852 IS CREATED TO 4
READ AS FOLLOWS: 5
Notwithstanding any provision of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 6
to 78.852 to the contrary: 7
(1) As used in this section: 8
(a) "Employer's effective election date" means the last day of the system's plan 9
year in the year in which the emplo yer has made an election as provided by 10
subsection (2) of this section, provided the employer has met the 11
requirements of this section; 12
(b) "Tier II benefits" means the benefits provided to a member who began 13
participating in the County Employees Retirement System immediately prior 14
to January 1, 2014; and 15
(c) "Tier III benefits" means the benefits provided to a member who began 16
participating i n the County Employees Retirement System on or after 17
January 1, 2014. 18
(2) (a) Effective July 1, 2027, and subject to the provisions of this section, 19
employers participating in the County Employees Retirement System may 20
make a one (1) time irrevocable elect ion to provide Tier II benefits to 21
employees of the employer who are participating in a hazardous position in 22
the County Employees Retirement System with the employer and who are 23
accruing or would otherwise accrue Tier III benefits for their service to the 24
employer. 25
(b) If an employer decides to make an election as provided by paragraph (a) of 26
this subsection, the employer shall: 27
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1. Adopt a resolution electing Tier II benefits for employees in a 1
hazardous position who are currently being provided Tier III b enefits 2
and shall submit the resolution to the board for its approval at least six 3
(6) months prior to the employer's desired effective election date; and 4
2. Agree to pay the additional actuarial costs to the system for making 5
the election as provided by Section 6 of this Act. 6
(c) An employer may request, at any time, an estimate of the cost to make an 7
election as provided by this subsection, provided the employer pays all costs 8
to perform the estimate. 9
(3) Except as otherwise provided by this section: 10
(a) Any employee participating in Tier III benefits in a hazardous position 11
through the employer on the employer's effective election date may, within 12
thirty (30) days of the employer's effective election date, individually make 13
an irrevocable election to part icipate in Tier II benefits for any future 14
participating service in a hazardous position with the employer. If such 15
election is made: 16
1. All service accrued on or after January 1, 2014, in a hazardous 17
position in the system with the employer shall be conve rted to Tier II 18
service and shall be presumed as service credit earned immediately 19
prior to January 1, 2014, for purposes of determining benefits 20
provided by KRS 78.510 to 78.852; 21
2. The member's accumulated contributions shall remain in the 22
member's account; and 23
3. The accumulated employer credit for the Tier III benefit with the 24
employer shall be transferred to the retirement allowance account as 25
provided by KRS 78.650. 26
If an employee eligible to make an election as provided by this paragraph 27
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does not or fails to make an irrevocable election to participate in Tier II 1
benefits as provided by this paragraph, then the employee shall remain 2
under Tier III benefit coverage. 3
(b) Any other employee hired on or after the employer's effective election date 4
who would otherwise participate in Tier III benefits in a hazardous position 5
shall participate in Tier II benefits for any prospective participating service 6
with the employer, but any prior service accrued prior to the employee's hire 7
date shall not be impacted e xcept as provided by paragraph (c) of this 8
subsection. 9
(c) As provided by Section 5 of this Act, an employee who is participating in 10
Tier II benefits pursuant to this section or their employer if the employer 11
has made an election to provide Tier II benefit s pursuant to this section, 12
may pay the costs to convert any other Tier III benefit service in a 13
hazardous position to Tier II benefit service. 14
(4) An employee who is eligible to make a one (1) time irrevocable election provided 15
by subsection (3)(a) of thi s section shall not have the option to change or make a 16
new election under any circumstances relating to a change in employment or 17
reemployment with a participating employer, including employment or 18
reemployment with a different employer. 19
(5) This section shall not apply to: 20
(a) Retired members who are reemployed on or after September 1, 2008, and 21
who are not eligible to participate in the systems during reemployment; or 22
(c) Any individual who made an election to participate in the hybrid cash 23
balance plan as provided by Section 2 of this Act. 24
Section 2. KRS 61.5955 is amended to read as follows: 25
Notwithstanding any provision of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 26
78.852 to the contrary: 27
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(1) Subject to the provisions of this section, any member who began participating in the 1
Kentucky Employees Retirement System, the County Employees Retirement 2
System, or the State Police Retirement System on or after September 1, 2008, but 3
prior to January 1, 2014, may in lieu of the benefits he or she is currently eligible to 4
receive from the systems, elect to receive the benefits and rights provided to 5
members who began participating in the systems on or after January 1, 2014, 6
including participating in the hybrid cash ba lance plan created pursuant to KRS 7
61.597 or 78.5512 for members in nonhazardous duty positions or pursuant to KRS 8
16.583 or 78.5516 for members in hazardous duty positions, as applicable; 9
(2) The election provided by this section shall be made in writing and on a form 10
prescribed by the Kentucky Public Pensions Authority and shall apply to all service 11
or accounts in the Kentucky Retirement Systems or the County Employees 12
Retirement System; 13
(3) For each member who makes an election provided by this section: 14
(a) Any service credit the member has accrued prior to January 1, 2014, shall be 15
considered as service credit earned on or after January 1, 2014, for purposes 16
of determining benefits under KRS 16.505 to 16.652, 61.510 to 61.705, and 17
78.510 to 78.852; 18
(b) On the member's effective election date, the value of the member's 19
accumulated contributions, less any interest, shall be deposited into the 20
member's hybrid cash balance account as provided by KRS 16.583, 61.597, 21
78.5512, or 78.5516, as applicable, and considered part of the member's 22
accumulated account balance; 23
(c) On the member's effective election date, an employer pay credit as provided 24
by KRS 16.583, 61.597, 78.5512, or 78.5516, as applicable, shall be added to 25
the member's accumulated account bal ance for each month the member 26
contributed to the Kentucky Employees Retirement System, the County 27
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Employees Retirement System, or the State Police Retirement System prior to 1
his or her effective election date; and 2
(d) Interest credits as provided by KRS 16.583, 61.597, 78.5512, or 78.5516, as 3
applicable, shall only be applied for periods occurring on or after the 4
member's effective election date; 5
(4) Before accepting an election provided by this section, the Kentucky Public Pensions 6
Authority shall provide the member with information detailing the potential results 7
of the member's election; 8
(5) An election made pursuant to this section shall be irrevocable; 9
(6) (a) A member of the Kentucky Employees Retirement System, the County 10
Employees Retirement Sys tem, or the State Police Retirement System shall 11
not be eligible to make an election prescribed by this section until the 12
Kentucky Retirement Systems receives a favorable private letter ruling from 13
the Internal Revenue Service regarding this section. 14
(b) If the Internal Revenue Service denies the request for a private letter ruling as 15
provided by paragraph (a) of this subsection, this section shall be void. 16
(c) The Kentucky Public Pensions Authority may promulgate administrative 17
regulations under KRS Chapter 13A in order to carry out this section; and 18
(7) This section shall not apply to: 19
(a) Retirees who were reemployed on or after September 1, 2008, and who are 20
not eligible to participate in the systems during reemployment; or 21
(b) Members who are participating in Tier II benefits as defined by Section 1 of 22
this Act based upon an election of an employer pursuant to Section 1 of this 23
Act. 24
Section 3. KRS 61.680 is amended to read as follows: 25
(1) Prior to August 1, 1982, ev ery employee shall be deemed to consent and agree to 26
any deduction from his or her compensation required by KRS 6.500 to 6.535, 27
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16.505 to 16.652, 61.510 to 61.692, 78.510 to 78.852, and to all other provisions 1
thereof. Thereafter, employee contributions sh all be picked up by the employer 2
pursuant to KRS 61.560(4). 3
(2) (a) Notwithstanding any other provisions of KRS 6.500 to 6.535, 16.505 to 4
16.652, 61.510 to 61.692, 78.510 to 78.852 and 161.220 to 161.714: 5
1. Upon death, disability, or service retirement, a member's accounts under 6
the Legislators' Retirement Plan, State Police Retirement System, 7
Kentucky Employees Retirement System, County Employees 8
Retirement System, and Teachers' Retirement System, except for service 9
prohibited by KRS 161.623(2), shall be consolidated for the purpose of 10
determining eligibility and amount of benefits, including: 11
a. [those ]Members who participate in the hybrid cash balance plan 12
within the Kentucky Employees Retirement System, the County 13
Employees Retirement System, and the S tate Police Retirement 14
System, on or after January 1, 2014; and[,] 15
b. Members who have both Tier II benefits and Tier III benefits in 16
the Kentucky Employees Retirement System, the County 17
Employees Retirement System, and the State Police Retirement 18
System d ue to an election by an employer to provide Tier II 19
benefits as provided by Section 1 of this Act; 20
and regardless of the transition of administration of the County 21
Employees Retirement System to the County Employees Retirement 22
System board of trustees; 23
2. Vested service credit in a retirement system, other than the Teachers' 24
Retirement System, sponsored by a Kentucky institution of higher 25
education and accepted by the Kentucky Employees Retirement System 26
or the County Employees Retirement System, may be u sed to determine 27
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eligibility for twenty -seven (27) year retirement for an employee who 1
begins participating before September 1, 2008, but not the amount of 2
benefits; 3
3. The computation of benefits shall be based on the applicable formula in 4
each system and service credit in each system, but the final 5
compensation, excluding compensation earned under KRS 161.155(10), 6
shall be determined as if all service were in one (1) system , including 7
for those members who have both Tier II benefits and Tier III benefits 8
in the Kentucky Employees Retirement System, the County Employees 9
Retirement System, and the State Police Retirement System due to an 10
election by an employer to provide Tier II benefits as provided by 11
Section 1 of this Act; 12
4. If the member has prior servi ce in more than one (1) system 13
administered by Kentucky Retirement Systems, he or she shall obtain at 14
least twelve (12) months' current service in each system in which he or 15
she has prior service in order to validate the prior service in each system 16
for purposes of determining consolidated benefits under this subsection; 17
and 18
5. Upon the determination of benefits, each system shall pay the applicable 19
amount of benefits due the member. 20
(b) The provisions of paragraph (a) of this subsection shall be waived if the 21
member: 22
1. Notifies the system of his or her desire to maintain separate retirement 23
accounts in the State Police Retirement System, Kentucky Employees 24
Retirement System, or County Employees Retirement System; or 25
2. Fails to simultaneously retire from a ll state -administered retirement 26
systems in which the member has an account or fails to retire from any 27
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other systems not administered by Kentucky Retirement Systems within 1
one (1) month of the member's effective retirement date in the systems 2
administered by Kentucky Retirement Systems. 3
(c) If the member has not contributed at least one (1) year in a system in which he 4
or she has prior service, his or her current service in the system shall be valid 5
for purposes of determining eligibility and in computation of benefits on a 6
consolidated basis. 7
(3) (a) A member with service credit in the Kentucky Employees Retirement System, 8
State Police Retirement System, or the County Employees Retirement System 9
who becomes the holder of an office entitling him or her to membership in the 10
Judicial Retirement Plan or the Legislators' Retirement Plan, but who does not 11
elect within thirty (30) days after taking office in such service to participate in 12
the plan, in accordance with KRS 6.505 or 21.360, shall be deemed to have 13
elected to retain membership in the sys tem in which he or she is a member, 14
either the Kentucky Employees Retirement System, State Police Retirement 15
System, or the County Employees Retirement System. In that event, the 16
agency employing the member shall withhold employee contributions, or 17
picked-up employee contributions after August 2, 1982, make employer 18
contributions and remit these contributions to the system in which the member 19
retained his or her membership. 20
(b) Any person entitled to membership in the Judicial Retirement Plan or the 21
Legislators' Retirement Plan, who does not elect within thirty (30) days after 22
taking office to participate in the plan, in accordance with KRS 6.505 or 23
21.360, and who at the time of taking office is not a contributing member of, 24
or does not have service credit in, any of the retirement systems mentioned in 25
this section, or the Teachers' Retirement System, shall participate in the 26
Kentucky Employees Retirement System. 27
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(c) A member of one (1) of the state -administered retirement plans who ceases to 1
contribute to t he plan as provided in KRS 21.360 and who is employed in a 2
nonelected position by an agency participating in the Kentucky Retirement 3
Systems or Kentucky Teachers' Retirement System shall be deemed to have 4
elected membership in the system in which the emplo yer of the nonelected 5
position participates. A member of one (1) of the state -administered 6
retirement plans who ceases to contribute to the plan as provided in KRS 7
21.360 and who is not employed in a nonelected position by an agency 8
participating in the Ke ntucky Retirement Systems shall be deemed to have 9
elected membership in the Kentucky Employees Retirement System. 10
(4) (a) Prior to July 1, 1976, a person entering the service of an employer 11
participating in the Kentucky Employees Retirement System or the C ounty 12
Employees Retirement System with service credit in the Teachers' Retirement 13
System and who desires to retain membership in the Teachers' Retirement 14
System, and who is permitted by that system to continue, shall be exempt 15
from participating in the Ken tucky Employees Retirement System or the 16
County Employees Retirement System. 17
(b) Any person who has elected to retain membership in the Teachers' Retirement 18
System as provided in paragraph (a) of this subsection may cancel his or her 19
election and participa te in the system under which his or her position would 20
normally participate, if he or she elects to cancel his or her option prior to 21
January 1, 1977. 22
(c) Any member of the General Assembly who upon election is a contributing 23
member of the Teachers' Retire ment System and who does not elect within 24
thirty (30) days after taking office to participate in the Legislators' Retirement 25
Plan, in accordance with KRS 6.505, shall during his or her term of office 26
participate in the Kentucky Employees Retirement System unless an election 27
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to retain membership in the Teachers' Retirement System is filed in writing 1
within ninety (90) days after his or her term of office begins. No contributions 2
may be made to the Teachers' Retirement System for the same period of 3
service un der the Legislators' Retirement Plan or the Kentucky Employees 4
Retirement System as a member of the General Assembly, but contributions 5
made to the Teachers' Retirement System while a member of the General 6
Assembly shall be transferred to the Legislators' Retirement Plan, as provided 7
for in KRS 6.535, when the member elects to join the Legislators' Retirement 8
Plan, and service credit in the Legislators' Retirement Plan shall be granted as 9
provided for in KRS 6.505(5). 10
(5) Any member of the Kentucky Employees Retirement System or County Employees 11
Retirement System who is working in a position covered by one (1) of these 12
retirement systems and his or her employee contributions, service credit and 13
employer contributions made on his or her behalf are being trans ferred to the other 14
retirement system shall contribute to the system in which his or her employer 15
participates, or after August 1, 1982, the employer shall pick up the employee 16
contributions, and no further contributions or service credit shall be transfer red to 17
the system in which he or she elected to retain membership, as subsection (2) of this 18
section eliminates the necessity of the transfers. 19
(6) (a) Except as provided by KRS 61.545(3)(b)2., any member of the Kentucky 20
Employees Retirement System or Coun ty Employees Retirement System who 21
is working in more than one (1) position covered by the same retirement 22
system, shall have his or her wages and contributions consolidated and his or 23
her retirement account administered as a single account. If part -time positions 24
are involved, an accumulation of all hours worked within the same retirement 25
system shall be used to determine eligibility under KRS 61.510(21). 26
(b) The provisions of this subsection shall not apply to an individual serving as a 27
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volunteer who is r eceiving compensation from the employer equal to or less 1
than a nominal fee as defined by KRS 61.510 and 78.510 if the compensation 2
paid to the volunteer is excluded from the definition of creditable 3
compensation as provided by KRS 61.510(13) or 78.510(13). 4
(7) (a) Notwithstanding the provisions of subsection (2) of this section, a person who 5
does not have the amount of service required for service retirement in the 6
State Police Retirement System, Kentucky Employees Retirement System, 7
County Employees Retir ement System, Legislators' Retirement Plan, or 8
Teachers' Retirement System, but who is a member of one (1) of the systems 9
or is a former member of one (1) or more of the systems with valid service 10
credit therein, shall become eligible for service retirement benefits attributable 11
to the amount of his or her actual service credit in each system in which he or 12
she has service credit when his or her combined service credit in all the 13
systems, plus any service credit he or she has in the Judicial Retirement Plan , 14
is equal to that required for service retirement in each respective system. The 15
computation of benefits shall be based on the applicable formula in each 16
system and service credit in each system, except that total service in all 17
systems, unless prohibited by KRS 161.623(2), shall be used to determine the 18
reduction for early retirement, if any. Except as provided in KRS 21.360, the 19
final compensation shall be determined by using the creditable compensation 20
reported to the State Police Retirement System, Ken tucky Employees 21
Retirement System, County Employees Retirement System, Legislators' 22
Retirement Plan, or Teachers' Retirement System and only as much of the 23
compensation earned in the Judicial Retirement Plan as is needed to satisfy 24
the final compensation r equirement applicable in the respective retirement 25
systems. 26
(b) Paragraph (a) of this subsection shall be waived if the member fails to 27
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simultaneously retire from all state -administered retirement systems in which 1
the member has an account or fails to reti re from any other systems not 2
administered by Kentucky Retirement Systems within one (1) month of the 3
member's effective retirement date in the systems administered by the 4
Kentucky Retirement Systems. 5
(8) Each retirement system from which the member retire s shall pay a retirement 6
allowance upon receipt of required forms and documents, except that no retirement 7
system shall pay a retirement allowance or annuity until all forms and documents 8
are filed at all retirement systems in compliance with each system's requirements. 9
Section 4. KRS 78.510 is amended to read as follows: 10
As used in KRS 78.510 to 78.852, unless the context otherwise requires: 11
(1) "System" means the County Employees Retirement System created by KRS 78.510 12
to 78.852; 13
(2) "Board" means the board of trustees of the system as provided in KRS 78.782; 14
(3) "County" means any county, or nonprofit organization created and governed by a 15
county, counties, or elected county officers, sheriff and his or her employees, 16
county clerk and his or her employees, circuit clerk and his or her deputies, former 17
circuit clerks or former circuit clerk deputies, or political subdivision or 18
instrumentality, including school boards, cities, charter county governments, urban -19
county governments, consolidated local governments, or unified local governments 20
participating in the system by order appropriate to its governmental structure, as 21
provided in KRS 78.530, and if the board is willing to accept the agency, 22
organization, or corporation, the board being hereby granted the authority to 23
determine the eligibility of the agency to participate; 24
(4) "School board" means: 25
(a) Any board of education participating in the system by order appropriate to its 26
governmental structure, as provided in KRS 78.530, and if the board is willing 27
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to accept the agency or corporation, the board being hereby granted the 1
authority to determine the eligibility of the agency to participate; or 2
(b) A public charter school as defined in KRS 160.1590 if the public charte r 3
school satisfies the criteria set by the Internal Revenue Service to participate 4
in a governmental retirement plan; 5
(5) "Examiner" means the medical examiners as provided in KRS 61.665; 6
(6) "Employee" means every regular full -time appointed or elective o fficer or 7
employee of a participating county and the coroner of a participating county, 8
whether or not he or she qualifies as a regular full -time officer. The term shall not 9
include persons engaged as independent contractors, seasonal, emergency, 10
temporary, and part-time workers. In case of any doubt, the board shall determine if 11
a person is an employee within the meaning of KRS 78.510 to 78.852; 12
(7) "Employer" means a county, as defined in subsection (3) of this section, the elected 13
officials of a county, or any authority of the county having the power to appoint or 14
elect an employee to office or employment in the county; 15
(8) "Member" means any employee who is included in the membership of the system 16
or any former employee whose membership has not ceased under KRS 78.535; 17
(9) "Service" means the total of current service and prior service as defined in this 18
section; 19
(10) "Current service" means the number of years and months of employment as an 20
employee, on and after July 1, 1958, for which creditable compensation is paid and 21
employee contributions deducted, except as otherwise provided; 22
(11) "Prior service" means the numb er of years and completed months, expressed as a 23
fraction of a year, of employment as an employee, prior to July 1, 1958, for which 24
creditable compensation was paid. An employee shall be credited with one (1) 25
month of prior service only in those months he or she received compensation for at 26
least one hundred (100) hours of work. Twelve (12) months of current service in the 27
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system shall be required to validate prior service; 1
(12) "Accumulated contributions" means the sum of all amounts deducted from the 2
compensation of a member and credited to his or her individual account in the 3
members' account, including employee contributions picked up after August 1, 4
1982, pursuant to KRS 78.610(4), together with interest credited, on the amounts, 5
and any other amounts the member shall have contributed thereto, including interest 6
credited thereon. "Accumulated contributions" shall not include employee 7
contributions that are deposited into accounts established pursuant to 26 U.S.C. sec. 8
401(h) within the fund established i n KRS 78.520, as prescribed by KRS 9
78.5536(3)(b); 10
(13) "Creditable compensation": 11
(a) Except as limited by paragraph (c) of this subsection, means all salary, wages, 12
and fees, including payments for compensatory time, paid to the employee as 13
a result of se rvices performed for the employer or for time during which the 14
member is on paid leave, which are includable on the member's federal form 15
W-2 wage and tax statement under the heading "wages, tips, other 16
compensation", including employee contributions picke d up after August 1, 17
1982, pursuant to KRS 78.610(4). The creditable compensation of fee officers 18
who receive salary, fees, maintenance, or other perquisites as a result of their 19
official duties is the gross amount received decreased by the cost of salary 20
paid deputies and clerks and the cost of office supplies and other official 21
expenses; 22
(b) Includes: 23
1. Lump-sum bonuses, severance pay, or employer -provided payments for 24
purchase of service credit, which shall be averaged over the employee's 25
service with the system in which it is recorded if it is equal to or greater 26
than one thousand dollars ($1,000); 27
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2. Cases where compensation includes maintenance and other perquisites, 1
but the board shall fix the value of that part of the compensation not paid 2
in money; 3
3. Lump-sum payments for creditable compensation paid as a result of an 4
order of a court of competent jurisdiction, the Personnel Board, or the 5
Kentucky Commission on Human Rights, or for any creditable 6
compensation paid in anticipation of settlement of a n action before a 7
court of competent jurisdiction, the Personnel Board, or the Kentucky 8
Commission on Human Rights, including notices of violations of state 9
or federal wage and hour statutes or violations of state or federal 10
discrimination statutes, which shall be credited to the fiscal year during 11
which the wages were earned or should have been paid by the employer. 12
This subparagraph shall also include lump -sum payments for reinstated 13
wages pursuant to KRS 61.569, which shall be credited to the period 14
during which the wages were earned or should have been paid by the 15
employer; 16
4. Amounts which are not includable in the member's gross income by 17
virtue of the member having taken a voluntary salary reduction provided 18
for under applicable provisions of the Internal Revenue Code; and 19
5. Elective amounts for qualified transportation fringes paid or made 20
available on or after January 1, 2001, for calendar years on or after 21
January 1, 2001, that are not includable in the gross income of the 22
employee by reason of 26 U.S.C. sec. 132(f)(4); and 23
(c) Excludes: 24
1. Living allowances, expense reimbursements, lump -sum payments for 25
accrued vacation leave, sick leave except as provided in KRS 78.616(5), 26
and other items determined by the board; 27
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2. For employees who begin partici pating on or after September 1, 2008, 1
lump-sum payments for compensatory time; 2
3. Training incentive payments for city officers paid as set out in KRS 3
64.5277 to 64.5279; 4
4. For employees who begin participating on or after August 1, 2016, 5
nominal fees paid for services as a volunteer; and 6
5. Any salary or wages paid to an employee for services as a Kentucky 7
State Police school resource officer as defined by KRS 158.441; 8
(14) "Final compensation" means: 9
(a) For a member who begins participating before Septe mber 1, 2008, who is 10
employed in a nonhazardous position, the creditable compensation of the 11
member during the five (5) fiscal years he or she was paid at the highest 12
average monthly rate divided by the number of months of service credit 13
during that five ( 5) year period multiplied by twelve (12). The five (5) years 14
may be fractional and need not be consecutive. If the number of months of 15
service credit during the five (5) year period is less than forty -eight (48), one 16
(1) or more additional fiscal years shall be used; 17
(b) For a member who is employed in a nonhazardous position, whose effective 18
retirement date is between August 1, 2001, and January 1, 2009, and whose 19
total service credit is at least twenty-seven (27) years and whose age and years 20
of service t otal at least seventy -five (75), final compensation means the 21
creditable compensation of the member during the three (3) fiscal years the 22
member was paid at the highest average monthly rate divided by the number 23
of months of service credit during that thre e (3) year period multiplied by 24
twelve (12). The three (3) years may be fractional and need not be 25
consecutive. If the number of months of service credit during the three (3) 26
year period is less than twenty -four (24), one (1) or more additional fiscal 27
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years shall be used; 1
(c) For a member who begins participating before September 1, 2008, who is 2
employed in a hazardous position, as provided in KRS 78.5520, the creditable 3
compensation of the member during the three (3) fiscal years he or she was 4
paid at the highest average monthly rate divided by the number of months of 5
service credit during that three (3) year period multiplied by twelve (12). The 6
three (3) years may be fractional and need not be consecutive. If the number 7
of months of service credit during the three (3) year period is less than twenty-8
four (24), one (1) or more additional fiscal years, which may contain less than 9
twelve (12) months of service credit, shall be used; 10
(d) For a member who begins participating on or after September 1, 2008, but 11
prior to January 1, 2014, who is employed in a nonhazardous position, the 12
creditable compensation of the member during the five (5) complete fiscal 13
years immediately preceding retirement divided by five (5). Each fiscal year 14
used to determine final compens ation must contain twelve (12) months of 15
service credit. If the member does not have five (5) complete fiscal years that 16
each contain twelve (12) months of service credit, then one (1) or more 17
additional fiscal years, which may contain less than twelve (12 ) months of 18
service credit, shall be added until the number of months in the final 19
compensation calculation is at least sixty (60) months; or 20
(e) For a member who begins participating on or after September 1, 2008, but 21
prior to January 1, 2014, who is employed in a hazardous position as provided 22
in KRS 78.5520, the creditable compensation of the member during the three 23
(3) complete fiscal years he or she was paid at the highest average monthly 24
rate divided by three (3). Each fiscal year used to determine fi nal 25
compensation must contain twelve (12) months of service credit. If the 26
member does not have three (3) complete fiscal years that each contain twelve 27
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(12) months of service credit, then one (1) or more additional fiscal years, 1
which may contain less tha n twelve (12) months of service credit, shall be 2
added until the number of months in the final compensation calculation is at 3
least thirty-six (36) months; 4
(15) "Final rate of pay" means the actual rate upon which earnings of an employee were 5
calculated du ring the twelve (12) month period immediately preceding the 6
member's effective retirement date, and shall include employee contributions 7
picked up after August 1, 1982, pursuant to KRS 78.610(4). The rate shall be 8
certified to the system by the employer an d the following equivalents shall be used 9
to convert the rate to an annual rate: two thousand eighty (2,080) hours for eight (8) 10
hour workdays, one thousand nine hundred fifty (1,950) hours for seven and one -11
half (7.5) hour workdays, two hundred sixty (260 ) days, fifty -two (52) weeks, 12
twelve (12) months, one (1) year; 13
(16) "Retirement allowance" means the retirement payments to which a member is 14
entitled; 15
(17) "Actuarial equivalent" means a benefit of equal value when computed upon the 16
basis of the actuaria l tables adopted by the board. In cases of disability retirement, 17
the options authorized by KRS 61.635 shall be computed by adding ten (10) years 18
to the age of the member, unless the member has chosen the Social Security 19
adjustment option as provided for i n KRS 61.635(8), in which case the member's 20
actual age shall be used. For members who begin participating in the system prior 21
to January 1, 2014, no disability retirement option shall be less than the same option 22
computed under early retirement; 23
(18) "Normal retirement date", unless otherwise provided in KRS 78.510 to 78.852, 24
means: 25
(a) For a member with service in a nonhazardous position, the sixty -fifth birthday 26
of a member; 27
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(b) For a member with service in a hazardous position who begins participati ng 1
before September 1, 2008, the first day of the month following a member's 2
fifty-fifth birthday; or 3
(c) For a member with service in a hazardous position who begins participating 4
on or after September 1, 2008, the first day of the month following a 5
member's sixtieth birthday; 6
(19) "Fiscal year" of the system means the twelve (12) months from July 1 through the 7
following June 30, which shall also be the plan year. The "fiscal year" shall be the 8
limitation year used to determine contribution and benefits li mits as set out in 26 9
U.S.C. sec. 415; 10
(20) "Agency reporting official" means the person designated by the participating 11
employer who shall be responsible for forwarding all employer and employee 12
contributions and a record of the contributions to the syste m and for performing 13
other administrative duties pursuant to KRS 78.510 to 78.852; 14
(21) "Regular full-time positions," as used in subsection (6) of this section, shall mean 15
all positions that average one hundred (100) or more hours per month, determined 16
by using the number of hours actually worked in a calendar or fiscal year, or eighty 17
(80) or more hours per month in the case of noncertified employees of school 18
boards, determined by using the number of hours actually worked in a calendar or 19
school year, unless otherwise specified, except: 20
(a) Seasonal positions, which although temporary in duration, are positions which 21
coincide in duration with a particular season or seasons of the year and that 22
may recur regularly from year to year, in which case the perio d of time shall 23
not exceed nine (9) months, except for employees of school boards, in which 24
case the period of time shall not exceed six (6) months; 25
(b) Emergency positions which are positions utilized by the employer during: 26
1. An emergency as determined by the employer for a period not 27
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exceeding thirty (30) working days and are nonrenewable; or 1
2. A state of emergency declared by the President of the United States or 2
the Governor of the Commonwealth of Kentucky that are created or 3
filled specifically for addressing the employer's needs during and as a 4
result of the declared emergency; 5
(c) Temporary positions that are positions of employment with a participating 6
agency for a period of time not to exceed twelve (12) months and not 7
renewable; 8
(d) Probationary positions which are positions of employment with a participating 9
employer that do not exceed twelve (12) months and that are used uniformly 10
by the participating agency on new employees who would otherwise be 11
eligible for participation in the system. Proba tionary positions shall not be 12
renewable by the participating employer for the same employee, unless the 13
employee has not been employed with the participating employer for a period 14
of at least twelve (12) months; or 15
(e) Part-time positions that are positio ns that may be permanent in duration, but 16
that require less than a calendar or fiscal year average of one hundred (100) 17
hours of work per month, determined by using the number of months actually 18
worked within a calendar or fiscal year, in the performance o f duty, except in 19
case of noncertified employees of school boards, the school term average shall 20
be eighty (80) hours of work per month, determined by using the number of 21
months actually worked in a calendar or school year, in the performance of 22
duty; 23
(22) "Alternate participation plan" means a method of participation in the system as 24
provided for by KRS 78.530(3); 25
(23) "Retired member" means any former member receiving a retirement allowance or 26
any former member who has on file at the retirement office the necessary 27
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documents for retirement benefits and is no longer contributing to the system; 1
(24) "Current rate of pay" means the member's actual hourly, daily, weekly, biweekly, 2
monthly, or yearly rate of pay converted to an annual rate as defined in final r ate of 3
pay. The rate shall be certified by the employer; 4
(25) "Beneficiary" means the person, persons, estate, trust, or trustee designated by the 5
member in accordance with KRS 61.542 or 61.705 to receive any available benefits 6
in the event of the member's death. As used in KRS 78.5536, beneficiary shall not 7
mean an estate, trust, or trustee; 8
(26) "Recipient" means the retired member, the person or persons designated as 9
beneficiary by the member and drawing a retirement allowance as a result of the 10
member's death, or a dependent child drawing a retirement allowance. An alternate 11
payee of a qualified domestic relations order shall not be considered a recipient, 12
except for purposes of KRS 61.623; 13
(27) "Person" means a natural person; 14
(28) "School term or year" means the twelve (12) months from July 1 through the 15
following June 30; 16
(29) "Retirement office" means the Kentucky Public Pensions Authority office building 17
in Frankfort, unless otherwise designated by the Kentucky Public Pensions 18
Authority; 19
(30) "Vested" for purposes of determining eligibility for purchasing service credit under 20
KRS 61.552 means the employee has at least forty -eight (48) months of service if 21
age sixty-five (65) or older or at least sixty (60) months of service if under the age 22
of sixty-five (65). For purposes of this subsection, "service" means service in the 23
systems administered by the Kentucky Retirement Systems and County Employees 24
Retirement System; 25
(31) "Participating" means an employee is currently earning service credit in the syst em 26
as provided in KRS 78.615; 27
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(32) "Month" means a calendar month; 1
(33) "Membership date" means: 2
(a) The date upon which the member began participating in the system as 3
provided in KRS 78.615; or 4
(b) December 31, 2013, solely for service converted or accrued as Tier II 5
benefits pursuant to Sections 1 and 5 of this Act; 6
(34) "Participant" means a member, as defined by subsection (8) of this section, or a 7
retired member, as defined by subsection (23) of this section; 8
(35) "Qualified domestic relations order" means any judgment, decree, or order, 9
including approval of a property settlement agreement, that: 10
(a) Is issued by a court or administrative agency; and 11
(b) Relates to the provision of child support, alimony payments, or marital 12
property rights to an alternate payee; 13
(36) "Alternate payee" means a spouse, former spouse, child, or other dependent of a 14
participant, who is designated to be paid retirement benefits in a qualified domestic 15
relations order; 16
(37) "Accumulated employer credit" means the employer pay credit deposited to the 17
member's account and interest credited on such amounts as provided by KRS 18
78.5512 and 78.5516; 19
(38) "Accumulated account balance" means: 20
(a) For members who began participat ing in the system prior to January 1, 2014, 21
the member's accumulated contributions; or 22
(b) For members who began participating in the system on or after January 1, 23
2014, in the hybrid cash balance plan as provided by KRS 78.5512 and 24
78.5516, the combined s um of the member's accumulated contributions and 25
the member's accumulated employer credit; 26
(39) "Volunteer" means an individual who: 27
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(a) Freely and without pressure or coercion performs hours of service for an 1
employer participating in one (1) of the syste ms administered by Kentucky 2
Retirement Systems or the County Employees Retirement System without 3
receipt of compensation for services rendered, except for reimbursement of 4
actual expenses, payment of a nominal fee to offset the costs of performing 5
the voluntary services, or both; and 6
(b) If a retired member, does not become an employee, leased employee, or 7
independent contractor of the employer for which he or she is performing 8
volunteer services for a period of at least twelve (12) months following the 9
retired member's most recent retirement date; 10
(40) "Nominal fee" means compensation earned for services as a volunteer that does not 11
exceed five hundred dollars ($500) per month with each participating employer. 12
Compensation earned for services as a volunteer from more than one (1) 13
participating employer during a month shall not be aggregated to determine whether 14
the compensation exceeds the five hundred dollars ($500) per month maximum 15
provided by this subsection; 16
(41) "Nonhazardous position" means a position that does not meet the requirements of 17
KRS 78.5520 or has not been approved by the board as a hazardous position; 18
(42) "Hazardous position" means a position that meets the requirements of KRS 78.5520 19
and has been approved by the board as hazardous; 20
(43) "Level-percentage-of-payroll amortization method" means a method of determining 21
the annual amortization payment on the unfunded actuarial accrued liability as 22
expressed as a percentage of payroll over a set period of years. Under this method, 23
the percentage of payroll shall be projected to remain constant for all years 24
remaining in the set period and the unfunded actuarially accrued liability shall be 25
projected to be fully amortized at the conclusion of the set period; 26
(44) "Increment" means twelve (12) mont hs of service credit which are purchased. The 27
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twelve (12) months need not be consecutive. The final increment may be less than 1
twelve (12) months; 2
(45) "Last day of paid employment" means the last date employer and employee 3
contributions are required to be reported in accordance with KRS 16.543, 61.543, or 4
78.615 to the retirement office in order for the employee to receive current service 5
credit for the month. Last day of paid employment does not mean a date the 6
employee receives payment for accrued leave, whether by lump sum or otherwise, 7
if that date occurs twenty-four (24) or more months after previous contributions; 8
(46) "Objective medical evidence" means reports of examinations or treatments; medical 9
signs which are anatomical, physiological, or psycho logical abnormalities that can 10
be observed; psychiatric signs which are medically demonstrable phenomena 11
indicating specific abnormalities of behavior, affect, thought, memory, orientation, 12
or contact with reality; or laboratory findings which are anatomic al, physiological, 13
or psychological phenomena that can be shown by medically acceptable laboratory 14
diagnostic techniques, including but not limited to chemical tests, 15
electrocardiograms, electroencephalograms, X-rays, and psychological tests; 16
(47) "Hazardous disability" as used in KRS 78.510 to 78.852 means a disability which 17
results in an employee's total incapacity to continue as an employee in a hazardous 18
position, but the employee is not necessarily deemed to be totally and permanently 19
disabled to engage in other occupations for remuneration or profit; 20
(48) "Act in line of duty" means, for employees in hazardous positions under KRS 21
78.5520: 22
(a) A single act occurring which was required in the performance of the principal 23
duties of the hazardous position as defined by the job description; or 24
(b) A single act of violence committed against the employee that is found to be 25
related to his or her job duties, whether or not it occurs at his or her job site; 26
(49) "Dependent child" means a child in the womb and a natural or legally adopted child 27
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of the member who has neither attained age eighteen (18) nor married or who is an 1
unmarried full-time student who has not attained age twenty -two (22). Solely in the 2
case of a member who dies as a direct result of an act in line of duty as defined in 3
this section, dies as a result of a duty -related injury as defined in KRS 61.621, 4
becomes totally and permanently disabled as a direct result of an act in the line of 5
duty as defined in this section, or becomes disabled as a res ult of a duty -related 6
injury as defined in KRS 61.621 and is eligible for the benefits provided by KRS 7
61.621(5)(a), "dependent child" also means a naturally or legally adopted disabled 8
child of the member, regardless of the child's age, if the child has b een determined 9
to be eligible for federal Social Security disability benefits or is being claimed as a 10
qualifying child for tax purposes due to the child's total and permanent disability; 11
(50) "Normal retirement age" means the age at which the member meets the 12
requirements for his or her normal retirement date as provided by subsection (18) of 13
this section; 14
(51) "Disability retirement date" means the first day of the month following the last day 15
of paid employment; 16
(52) "Monthly average pay" means: 17
(a) In the case of a member who dies as a direct result of an act in line of duty as 18
defined in KRS 16.505 or who dies as a result of a duty -related injury as 19
defined in KRS 61.621, the higher of the member's monthly final rate of pay 20
or the average monthly cr editable compensation earned by the deceased 21
member during his or her last twelve (12) months of employment; or 22
(b) In the case where a member becomes totally and permanently disabled as a 23
direct result of an act in line of duty as defined in KRS 16.505 or becomes 24
disabled as a result of a duty -related injury as defined in KRS 61.621 and is 25
eligible for the benefits provided by KRS 61.621(5)(a), the higher of the 26
member's monthly final rate of pay or the average monthly creditable 27
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compensation earned by the disabled member during his or her last twelve 1
(12) months of employment prior to the date the act in line of duty or duty -2
related injury occurred; 3
(53) "Authority" means the Kentucky Public Pensions Authority as provided by KRS 4
61.505; 5
(54) "Executive director" means the executive director of the Kentucky Public Pensions 6
Authority; and 7
(55) "Gainful employment" means work in any capacity that is or may be performed 8
with regularity and is or may be usually done for pay, whether pay is received or 9
not received, including seasonal, volunteer, part-time, and on-call work. 10
Section 5. KRS 78.5520 is amended to read as follows: 11
(1) For purposes of this section: 12
(a) "Hazardous position" for employees who began participating in th e County 13
Employees Retirement System prior to September 1, 2008, means any 14
position whose principal duties involve active law enforcement, including the 15
positions of probation and parole officer, active fire suppression or 16
prevention, correctional officers with duties that routinely and regularly 17
require face-to-face contact with inmates, or other positions, including but not 18
limited to paramedics and emergency medical technicians, with duties that 19
require frequent exposure to a high degree of danger or per il and also require 20
a high degree of physical conditioning; and 21
(b) "Hazardous position" for employees who begin participating in the County 22
Employees Retirement System on or after September 1, 2008, means police 23
officers and firefighters as defined in KRS 61.315(1), paramedics, 24
correctional officers with duties that routinely and regularly require face -to-25
face contact with inmates, and emergency medical technicians, if: 26
1. The employee's duties require frequent exposure to a high degree of 27
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danger or peril and a high degree of physical conditioning; and 1
2. The employee's duties are not primarily clerical or administrative. 2
(2) (a) Each employer may request of the board hazardous coverage for those 3
positions as defined in subsection (1) of this section. Upon request, each 4
employer shall certify to the system, in the manner prescribed by the board, 5
the names of all employees working in a hazardous position as defined in 6
subsection (1) of this section for which coverage is requested. The 7
certification of the emp loyer shall bear the approval of the agent or agency 8
responsible for the budget of the employer indicating that the required 9
employer contributions have been provided for in the budget of the employer. 10
The system shall determine whether the employees whose names have been 11
certified by the employer are working in positions meeting the definition of a 12
hazardous position as provided by subsection (1) of this section. 13
(b) Each employer shall also certify, under penalty of perjury in accordance with 14
KRS Chapter 523, that each employee's actual job duties are accurately 15
reflected in the job description provided to the system. The system shall 16
determine whether the employees whose names have been certified by the 17
employer are working in positions meeting the defin ition of a hazardous 18
position as defined in subsection (1) of this section. 19
(c) The board shall have the authority to remove any employee from hazardous 20
coverage if the board determines the employee is not working in a hazardous 21
position or if the employee is classified in a hazardous position but has 22
individual job duties that do not meet the definition of a hazardous position or 23
are not accurately reflected in the job descriptions filed by the employer with 24
the system. 25
(3) (a) If the employer participated in the system prior to electing hazardous 26
coverage, the employer may pay to the system the cost of converting the 27
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nonhazardous service to hazardous service from the date of participation to 1
the date the payment is made, or the employer may establish a pay ment 2
schedule for payment of the cost of the hazardous service above that which 3
would be funded within the existing employer contribution rate. The employer 4
may extend the payment schedule to a maximum of thirty (30) years. 5
Payments made by the employer un der this subsection shall be deposited to 6
the retirement allowance account of the proper retirement or retiree health 7
fund and shall not be considered accumulated contributions of the individual 8
members. 9
(b) If the employer elects not to make the addition al payment as provided by 10
paragraph (a) of this subsection, the employee may pay the cost of converting 11
the service and provide payment for the cost as provided by KRS 61.552(9). 12
Payments made by the employee under this subsection shall not be picked up, 13
as described in KRS 78.610(4), by the employer. 14
(c) If neither the employer nor employee makes the payment, the service prior to 15
hazardous position coverage shall remain nonhazardous. 16
(d) The provisions of this subsection shall not apply to members who be gin 17
participating in the system on or after January 1, 2014. 18
(4) (a) If an employer providing hazardous retirement coverage pursuant to this 19
section makes an election to convert from Tier III benefits to Tier II 20
benefits for service with the employer as pr ovided by Section 1 of this Act, 21
the employee may pay the cost of converting any other Tier III service in a 22
hazardous position to Tier II service as defined by Section 1 of this Act by 23
providing payment for the cost as provided by KRS 61.552(9). Payments 24
made by the employee under this subsection shall not be picked up, as 25
described in KRS 78.610(4), by the employer. 26
(b) The employer may, on behalf of the employee, pay the cost of converting 27
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any service that could be converted under paragraph (a) of this s ubsection. 1
Payments made by the employer under this subsection shall be deposited to 2
the retirement allowance account of the proper retirement or retiree health 3
fund and shall not be considered accumulated contributions of the 4
individual members. 5
(5) Any person employed in a hazardous position shall be required to undergo a 6
thorough medical examination by a licensed physician, and a copy of the medical 7
report of the physician shall be retained on file by the person's employer and made 8
available to the system upon request. 9
(6)[(5)] If doubt exists regarding the benefits payable to a hazardous position 10
employee under this section, the board shall determine the benefits payable under 11
KRS 78.510 to 78.852. 12
Section 6. KRS 78.635 is amended to read as follows: 13
(1) (a) Except as provided by subsection (4) of this section, each employer 14
participating in the County Employees Retirement System as provided for in 15
KRS 78.510 to 78.852 shall contribute annually to the system an a mount 16
determined by the actuarial valuation completed in accordance with KRS 17
78.784 and as specified by this section. Employer contributions for the system 18
shall be equal to the sum of the "normal cost contribution" and the "actuarially 19
accrued liability contribution." 20
(b) For purposes of this section, the normal cost contribution shall be computed 21
as a percentage of pay and shall be an annual amount that is sufficient when 22
combined with employee contributions to fund benefits earned during the year 23
in the system. The amount shall be: 24
1. Paid as a percentage of creditable compensation reported for each 25
employee participating in the system and accruing benefits; and 26
2. The same percentage of pay for all employees who are participating in 27
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the system, except that separate percentage rates sha ll be developed in 1
each system for those employers whose employees are participating in 2
hazardous duty retirement coverage as provided by KRS 78.5520. 3
(c) For purposes of this section, the actuarially accrued liability contribution shall 4
be: 5
1. Computed by amortizing the total unfunded actuarially accrued liability 6
of the system over a closed period of thirty (30) years beginning with 7
the 2019 actuarial valuation using the level percentage of payroll 8
amortization method, except that any increase or decreas e in the 9
unfunded actuarially accrued liability occurring after the completion of 10
the 2019 actuarial valuation shall be amortized over a closed period of 11
twenty (20) years beginning with the actuarial valuation in which the 12
increase or decrease in the unfu nded actuarially accrued liability is 13
recognized. An increase or decrease in the unfunded actuarially accrued 14
liability may result from, but not be limited to, legislative changes to 15
benefits, changes in actuarial methods or assumptions, or actuarial gains 16
or losses . Each employer who makes a one (1) time irrevocable 17
election as provided by Section 1 of this Act shall also be required to 18
pay an additional actuarially accrued liability contribution that is 19
sufficient to fund the conversion of benefits as pro vided by Section 1 20
of this Act; 21
2. Paid as a percentage of payroll on the creditable compensation reported 22
for each employee participating in the system and accruing benefits; and 23
3. The same percentage of pay for all employees who are participating in 24
the system, except that: 25
a. Separate percentage rates shall be developed in each system for 26
those employers whose employees are participating in hazardous 27
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duty retirement coverage as provided by KRS 78.5520; and 1
b. Employers who make a one (1) time irrevoc able election as 2
provided by Section 1 of this Act shall pay the additional 3
contribution specified by subparagraph 1. of this paragraph. 4
(d) The employer contributions computed under this section shall be determined 5
using: 6
1. The entry age normal cost funding method; 7
2. An asset smoothing method that smooths investment gains and losses 8
over a five (5) year period; and 9
3. Other funding methods and assumptions established by the board in 10
accordance with KRS 78.784. 11
(2) Normal contribution and the actuarial ly accrued liability contribution rates shall be 12
determined by the board on the basis of the annual actuarial valuation last preceding 13
the July 1 of a new fiscal year. 14
(3) Employer contribution rates as provided by this section shall include an employer 15
contribution rate to fund pension benefits and an employer contribution rate to fund 16
retiree health benefits. 17
(4) The employer contribution rate established by the board for the County Employees 18
Retirement System that is payable on or after July 1, 2018, and until June 30, 2028, 19
for the pension and retiree health insurance funds, including the normal cost 20
contribution and the actuarially accrued liability contribution for each fund, shall 21
not increase by more than a factor of one and twelve one hundredths (1. 12) over the 22
prior fiscal year's employer contribution rate as determined by the system's 23
consulting actuary. 24
(5) The system shall advise each employer prior to the beginning of each fiscal year of 25
any change in the employer contribution rate. Based on the employer contribution 26
rate, each employer shall include in the budget sufficient funds to pay the employer 27
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contributions as determined by the board under this section. 1
Section 7. KRS 78.640 is amended to read as follows: 2
(1) The members' account shall be the account to which: 3
(a) All members' contributions, or contributions picked up by the employer after 4
August 1, 1982, and interest allowances as provided in KRS 78.510 to 78.852 5
shall be credited, except as provided by KRS 78.5536(3)(b); and 6
(b) For members who begin participating in the system on or after January 1, 7
2014, the employer pay credit and interest credited on such amounts as 8
provided by KRS 78.5512 and 78.5516 shall be credited. 9
Only funds from this account shall be used to return the accumulated contributions 10
or accumulated account balances of a member when required to be returned to him 11
or her by reason of any provision of KRS 78.510 to 78.852. Prior to the member's 12
retirement, death, or refund in accordance with KRS 61.625, no funds shall be made 13
available from the member account. 14
(2) Each member's contribution or contribution picked up by the employer shall be 15
credited to the individual account of the contributing member, except as provided 16
by KRS 78.5536(3)(b). 17
(3) (a) Each member shall have his or her individual account credited with interest on 18
June 30 of each year. 19
(b) For a member who begins participating before September 1, 2008, interest 20
shall be credited to his or her individual account at a rate de termined by the 21
board but not less than two percent (2%) per annum on the accumulated 22
account balance of the member on June 30 of the preceding fiscal year. 23
(c) For a member who begins participating on or after September 1, 2008, but 24
prior to January 1, 20 14, interest shall be credited to his or her individual 25
account at a rate of two and one -half percent (2.5%) per annum on the 26
accumulated contributions of the member on June 30 of the preceding fiscal 27
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year. 1
(d) For a member who begins participating on or after January 1, 2014, in the 2
hybrid cash balance plan, interest shall be credited in accordance with KRS 3
78.5512 and 78.5516. 4
(e) The amounts of interest credited to a member's account under this subsection 5
shall be transferred from the retirement allowance account. 6
(4) (a) Upon the retirement of a member who began participating in the system prior 7
to January 1, 2014, his or her accumulated account balance shall be 8
transferred from the members' account to the retirement allowance account. 9
(b) Upon the retirement of a member who began participating in the system on or 10
after January 1, 2014, who elects to annuitize his or her accumulated account 11
balance as prescribed by KRS 78.5512(7)(a) or (b) or 78.5516(7)(a) or (b), the 12
member's accumulated account balance shall be transferred to the retirement 13
allowance account. 14
(c) Upon the conversion of any Tier III benefits to Tier II benefits as provided 15
by Sections 1 and 5 of this Act, the member's accumulated employer credi t 16
attributable to service converted to Tier II benefits as provided by Sections 1 17
or 5 of this Act shall be transferred to the retirement allowance account. 18
Section 8. This Act shall be effective July 1, 2027. 19