AN ACT relating to sick leave for school district personnel.

UNOFFICIAL COPY 26 RS SB 124/GA
Page 1 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
AN ACT relating to sick leave for school district personnel. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 161.155 is amended to read as follows: 3
(1) As used in this section: 4
(a) "Assault" shall mean an act that intentionally causes injury so significant that 5
the victim is determined to be, by certification of a physici an or surgeon duly 6
qualified under KRS Chapter 342, incapable of performing the duties of his or 7
her job; 8
(b) "Employee" shall mean any person, other than a teacher, employed in the 9
public schools, whether on a full or part-time basis; 10
(c) "Immediate family" shall mean the teacher's or employee's spouse, children 11
including stepchildren and foster children, grandchildren, daughters -in-law 12
and sons -in law, brothers and sisters, parents and spouse's parents, and 13
grandparents and spouse's grandp arents, without reference to the location or 14
residence of said relative, and any other blood relative who resides in the 15
teacher's or employee's home; 16
(d) "Sick leave bank" shall mean an aggregation of sick leave days contributed by 17
teachers or employees f or use by teachers or employees who have exhausted 18
all sick leave and other available paid leave days; and 19
(e) "Teacher" shall mean any person for whom certification is required as a basis 20
of employment in the common schools of the state. 21
(2) Each district board of education shall allow to each teacher and full -time employee 22
in its common school system not less than ten (10) days of sick leave during each 23
school year, without deduction of salary. Sick leave shall be granted to a teacher or 24
employee if he or she presents a personal statement or a certificate of a physician 25
stating that the teacher or employee was ill, that the teacher or employee was absent 26
for the purpose of attending to a member of his or her immediate family who was 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 2 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
ill, or for the purpose of mourning a member of his or her immediate family. 1
Teachers and employees of the school district may also use accumulated sick 2
leave for the observance of religious holidays not otherwise included in the 3
school calendar if the teacher or employee subm its a personal statement 4
verifying the observance of the religious holiday and provides sufficient advance 5
notice as determined by the school district. The ten (10) days of sick leave granted 6
in this subsection may be taken by a teacher or employee on any ten (10) days of 7
the school year and shall be granted in addition to accumulated sick leave days that 8
have been credited to the teacher or employee under the provisions of subsection 9
(4) of this section. 10
(3) A school district shall coordinate among the in come and benefits from workers' 11
compensation, temporary disability retirement, and district payroll and benefits so 12
that there is no loss of income or benefits to a teacher or employee for work time 13
lost because of an assault while performing the teacher's or employee's assigned 14
duties for a period of up to one (1) year after the assault. In the event a teacher or 15
employee suffers an assault while performing his or her assigned duties that results 16
in injuries that qualify the teacher or employee for workers ' compensation benefits, 17
the district shall provide leave to the teacher or employee for up to one (1) year 18
after the assault with no loss of income or benefits under the following conditions: 19
(a) The district shall pay the salary of the teacher or employe e between the time 20
of the assault and the time the teacher's or employee's workers' compensation 21
income benefits take effect, or the time the teacher or employee is certified to 22
return to work by a physician or surgeon duly qualified under KRS Chapter 23
342, whichever is sooner; 24
(b) The district shall pay, for up to one (1) year from the time of the assault, the 25
difference between the salary of the teacher or employee and any workers' 26
compensation income benefits received by the teacher or employee resulting 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 3 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
from the assault. Payments by the district shall include payments for 1
intermittent work time missed as a result of the assault during the one (1) year 2
period. If the teacher's or employee's workers' compensation income benefits 3
cease during the one (1) yea r period after the assault, the district shall also 4
cease to make payments under this paragraph; 5
(c) The Commonwealth, through the Kentucky Department of Education, shall 6
make the employer's health insurance contribution during the period that the 7
district makes payments under paragraphs (a) and (b) of this subsection; 8
(d) The Commonwealth, through the Kentucky Department of Education, shall 9
make the employer's contribution to the retirement system in which the 10
teacher or employee is a member during the per iod that the district makes 11
payments under paragraphs (a) and (b) of this subsection; and 12
(e) Payments to a teacher or employee under paragraphs (a) and (b) of this 13
subsection shall be coordinated with workers' compensation benefits under 14
KRS Chapter 342, disability retirement benefits for teachers under KRS 15
161.661 to 161.663, and disability retirement benefits for employees under 16
KRS 61.600 to 61.621 and 78.5522, 78.5524, 78.5526, 78.5528, and 78.5530 17
so that the teacher or employee receives income equiva lent to his or her full 18
contracted salary, but in no event shall the combined payments exceed one 19
hundred percent (100%) of the teacher's or employee's full contracted salary. 20
(4) (a) 1. Except as otherwise provided in paragraph (b) of this subsection, days 21
of sick leave not taken by an employee or a teacher during any school 22
year shall accumulate without limitation and be credited to that 23
employee or teacher. Accumulated sick leave may be taken in any 24
school year. 25
2. Any district board of education may, in its discretion, allow employees 26
or teachers in its common school system sick leave in excess of the 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 4 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
number of days prescribed in this section and may allow school district 1
employees and teachers to use up to three (3) days' sick leave per school 2
year for emergency leave pursuant to KRS 161.152(3). 3
3. Any accumulated sick leave days credited to an employee or a teacher 4
shall remain so credited in the event he or she transfers his or her place 5
of employment from one (1) school district to another within the state or 6
to the Kentucky Department of Education or transfers from the 7
Department of Education to a school district. 8
(b) 1. A school district may establish by policy a program to annually 9
compensate an employee or a teacher prior to retirement for each 10
unused sick leave day the teacher or employee has accrued in excess 11
of fifteen (15) days, provided the employee or teacher has elected to 12
receive compensation for the excess unused sick leave. The rate of 13
compensation for each unused sick leave day shall be b ased on a 14
percentage of the daily salary rate calculated from the employee's or 15
teacher's last annual salary, not to exceed thirty percent (30%). The 16
school district may establish additional requirements for payment of 17
unused sick leave days established un der this paragraph, including 18
but not limited to limiting the number of unused sick leave days that 19
can be compensated annually and increasing the number of unused 20
sick leave days a teacher or employee must accrue before the school 21
district will provide compensation. Upon payment for compensation of 22
unused sick leave days, the employee's or teacher's sick leave balance 23
shall be reduced by the number of days compensated by the school 24
district. 25
2. The compensation for unused sick leave days established by thi s 26
paragraph shall not be considered compensation or creditable 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 5 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
compensation for purposes of any contributions payable to or for 1
computation of benefits payable by the Teachers' Retirement System 2
under KRS 161.220 to 161.716 or the County Employees Retireme nt 3
System under KRS 78.510 to 78.852. 4
3. Payments for compensation made by a district board of education 5
under this paragraph are presumed to be for services rendered and for 6
the benefit of the common schools, and the payments do not affect the 7
eligibility of any school district to participate in any public school 8
funding program established in KRS Chapter 157. 9
4. The Kentucky Department of Education shall annually report to the 10
Legislative Research Commission for referral to the appropriate 11
committee or co mmittees information on school districts who have 12
established a program under this paragraph, including the name of 13
the school district, summary details of the individual district's 14
program, the number of teachers and employees electing to receive a 15
payment by school district, and the costs of payments made by each 16
school district. 17
(5) Accumulated days of sick leave shall be granted to a teacher or employee if, prior to 18
the opening day of the school year, a statement or a certificate of a physician is 19
presented to the district board of education, stating that the teacher or employee is 20
unable to commence his or her duties on the opening day of the school year, but 21
will be able to assume his or her duties within a period of time that the board 22
determines to be reasonable. 23
(6) Any school teacher or employee may repurchase previously used sick leave days 24
with the concurrence of the local school board by paying to the district an amount 25
equal to the total of all costs associated with the used sick leave. The provisions of 26
this subsection shall not apply to sick leave days compensated pursuant to 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 6 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
subsection (4)(b) of this section. 1
(7) A district board of education may adopt a plan for a sick leave bank. The plan may 2
include limitations upon the number of days a te acher or employee may annually 3
contribute to the bank and limitations upon the number of days a teacher or 4
employee may annually draw from the bank. Only those teachers or employees who 5
contribute to the bank may draw upon the bank. Days contributed will b e deducted 6
from the days available to the contributing teacher or employee. The sick leave 7
bank shall be administered in accordance with a policy adopted by the board of 8
education. 9
(8) (a) A district board of education shall establish a sick leave donation program to 10
permit teachers or employees to voluntarily contribute sick leave to teachers 11
or employees in the same school district who are in need of an extended 12
absence from school. A teacher or employee who has accrued more than 13
fifteen (15) days' sick l eave may request the board of education to transfer a 14
designated amount of sick leave to another teacher or employee who is 15
authorized to receive the sick leave donated. A teacher or employee may not 16
request an amount of sick leave be donated that reduces his or her sick leave 17
balance to less than fifteen (15) days. 18
(b) A teacher or employee may receive donations of sick leave if: 19
1. a. The teacher or employee or a member of his or her immediate 20
family suffers from a medically certified illness, injury, 21
impairment, or physical or mental condition that has caused or is 22
likely to cause the teacher or employee to be absent for at least ten 23
(10) days; or 24
b. The teacher or employee suffers from a catastrophic loss to his or 25
her personal or real property, due to either a natural disaster or fire, 26
that either has caused or will likely cause the employee to be 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 7 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
absent for at least ten (10) consecutive working days; 1
2. The teacher's or employee's need for the absence and use of leave are 2
certified by a licensed physician for leave requested under subparagraph 3
1.a. of this paragraph[subsection]; 4
3. The teacher or employee has exhausted his or her accumulated sick 5
leave, personal leave, and any other leave granted by the school district; 6
and 7
4. The teacher or employee has complied with the school district's policies 8
governing the use of sick leave. 9
(c) While a teacher or employee is on sick leave provided by this secti on, he or 10
she shall be considered a school district employee, and his or her salary, 11
wages, and other employee benefits shall not be affected. 12
(d) Any sick leave that remains unused, is not needed by a teacher or employee, 13
and will not be needed in the fut ure shall be returned to the teacher or 14
employee donating the sick leave. 15
(e) The board of education shall adopt policies and procedures necessary to 16
implement the sick leave donation program. 17
(9) (a) A teacher or employee may use up to thirty (30) days of sick leave following 18
the birth or adoption of a child or children. Additional days may be used when 19
the need is verified by a physician's statement. 20
(b) On or before July 1, 2030, each school district shall establish a policy to 21
provide up to thirty (30) paid maternity leave days for a teacher or employee 22
who gives birth to a child. The maternity leave days shall be used without 23
deduction of salary and shall be used prior to the teacher or employee using 24
any other leave. Any maternity leave days unused by the teacher or employee 25
shall not transfer into sick leave or be converted to any other leave type and 26
shall expire upon return to work. This paragraph shall not limit a school 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 8 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
district's authority to establish additional paid maternity benefits or to prov ide 1
paid parental leave benefits. 2
(10) (a) A district board of education may compensate, at the time of retirement or 3
upon the death of a member in active contributing status at the time of death 4
who was eligible to retire by reason of service, an employee or a teacher, or 5
the estate of an employee or teacher, for each unused sick leave day. The rate 6
of compensation for each unused sick leave day shall be based on a 7
percentage of the daily salary rate calculated from the employee's or teacher's 8
last annual salary, not to exceed thirty percent (30%). 9
(b) Except as provided in paragraph (c) of this subsection, payment for unused 10
sick leave days under this subsection shall be incorporated into the annual 11
salary of the final year of service for inclusion in the calculation of the 12
employee's or teacher's retirement allowance only at the time of his or her 13
initial retirement, provided that the member makes the regular retirement 14
contribution for members on the sick leave payment. The accumulation of 15
these days includes unused sick leave days held by the employee or teacher at 16
the time of implementation of the program. 17
(c) For a teacher or employee who becomes a nonuniversity member of the 18
Teachers' Retirement System on or after January 1, 2022, as provided by KRS 19
161.220, payment for unused sick leave days under this subsection shall not 20
be incorporated into the annual compensation used to calculate the teacher's or 21
employee's retirement allowance in the foundational benefit component as 22
described by KRS 161.633 but may be deposited into the nonuniversity 23
member's supplemental benefit component as provided by KRS 161.635. 24
(d) For a teacher or employee who begins employment with a local school district 25
on or after July 1, 2008, the maximum amount of unused sick leave d ays a 26
district board of education may recognize in calculating the payment of 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 9 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
compensation to the teacher or employee under this subsection shall not 1
exceed three hundred (300) days. 2
(e) 1. Actuarial costs to the Teachers' Retirement System for the inclusi on of 3
payment for unused sick leave days that are eligible for compensation 4
under paragraph (b) of this subsection shall be funded in accordance 5
with this paragraph. 6
2. The state shall pay the actuarial costs for the compensation attributable 7
to the actual unused sick leave accrued as of June 30, 2025, plus annual 8
adjustments to the sick leave balance each fiscal year thereafter, based 9
upon the sick leave accrued or used by the teacher or employee, not to 10
exceed thirteen (13) additional days per year. Unuse d sick leave payable 11
by the state shall not include any annual leave described by KRS 12
161.540(1)(f) or the cost of unused sick days for employees retiring 13
from agencies listed in KRS 161.220(4)(d) and (f). 14
3. The last employer who is compensating the unuse d sick day as provided 15
in paragraph (a) of this subsection shall pay the actuarial costs of 16
compensation for unused sick leave days not paid by the state under 17
subparagraph 2. of this paragraph. Upon the teacher's or employee's 18
retirement, the Teachers' Re tirement System shall bill the last employer 19
for the cost of the unused sick days, and the employer shall pay the costs 20
within fifteen (15) days after receiving notification of the cost from the 21
system. 22
4. The actuarial costs of the unused sick days shall be the amount payable 23
for unused sick days after the fixed statutory employee and employer 24
contributions have been paid as provided in KRS 161.540 and 25
161.550(1) and that is necessary to fund the benefit. 26
(f) For the fiscal year ending June 30, 2025, and e ach fiscal year thereafter, each 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 10 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
school district shall annually report to the Teachers' Retirement System the 1
sick leave balances for each teacher and employee who is a member of the 2
Teachers' Retirement System. The report shall include for each teacher or 3
employee: 4
1. The sick leave days accrued at the beginning of the fiscal year; 5
2. The sick leave days accrued during the fiscal year; 6
3. Any other days of leave added to the sick leave balance during the fiscal 7
year by rollover, conversion, or any other method; 8
4. The sick leave days used during the fiscal year or compensated 9
pursuant to subsection (4)(b) of this section; and 10
5. The sick leave balance at the end of the fiscal year. 11
(g) Each school district shall file with the Teachers' Retirement System 12
information regarding their sick leave policies and provisions that are 13
applicable to members of the system, including: 14
1. The number of sick leave days accrued annually under the sick leave 15
program established pursuant to subsection (2) of this section; 16
2. Any other types of leave and the amount of leave by type that may, prior 17
to retirement or at the time of retirement, be i ncluded by rollover, 18
conversion, or any other method, in an employee's sick leave balance 19
pursuant to any district policy or any contract entered into by the 20
district; and 21
3. Any other information required by the system. 22
The reporting required by this par agraph shall include a description of 23
whether the policies or contracts governing sick leave policies apply to all 24
employees, a class of employees, or a specific employee of the district. 25
(11) Any statute to the contrary notwithstanding, employees and teac hers who 26
transferred from the Department of Education to a school district, from a school 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 11 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
district to the Department of Education, or from one (1) school district to another 1
school district after July 15, 1981, shall receive credit for any unused sick leav e to 2
which the employee or teacher was entitled on the date of transfer. This credit shall 3
be for the purposes set forth in subsection (10) of this section. 4
(12) The death benefit provided in subsection (10) of this section may be cited as the 5
Baughn Benefit. 6
Section 2. KRS 78.616 is amended to read as follows: 7
(1) Any employer participating in the County Employees Retirement System which has 8
formally adopted a sick -leave program that is universally administered to its 9
employees may purchase service credit with the retirement system for up to six (6) 10
months of unused sick leave for each retiring employee. 11
(2) Participation under this section shall be at the option of each participating 12
employer. The election to participate shall be made by the governing authority of 13
the participating employer and shall be certified in writing to the system on forms 14
prescribed by the board. The certification shall provide for equal treatment of all 15
employees participating under this section. 16
(3) (a) Upon the member's notification of retirement as prescribed in KRS 61.590, 17
the employer shall certify the retiring employee's unused, accumulated sick -18
leave balance to the system. The member's sick -leave balance, expressed in 19
days, shall be divide d by the average number of working days per month in 20
county service and rounded to the nearest number of whole months. A 21
maximum of six (6) months of the member's sick -leave balance, expressed in 22
months, shall be added to his service credit for the purpose of determining his 23
annual retirement allowance under KRS 78.510 to 78.852 and for the purpose 24
of determining whether the member is eligible to receive a retirement 25
allowance under KRS 78.510 to 78.852, except as provided by paragraph (d) 26
of this subsectio n. Accumulated sick -leave in excess of six (6) months shall 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 12 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
be added to the member's service credit if the member or employer pays to the 1
retirement system the value of the additional service credit based on the 2
formula adopted by the board, subject to the restrictions provided by 3
paragraph (d) of this subsection. 4
(b) The employer may elect to pay fifty percent (50%) of the cost of the sick 5
leave in excess of six (6) months on behalf of its employees. The employee 6
shall pay the remaining fifty percent (50%) . The payment by the employer 7
shall not be deposited to the member's account. Service credit shall not be 8
credited to the member's account until both the employer's and employee's 9
payments are received by the retirement system. 10
(c) Once the employer elects to pay all or fifty percent (50%) of the cost on 11
behalf of its employees, it shall continue to pay the same portion of the cost. 12
(d) For a member who begins participating in the retirement system on or after 13
September 1, 2008, but prior to January 1, 2014 , whose employer has 14
established a sick -leave program under subsections (1) to (4) and (6) of this 15
section: 16
1. The member shall receive no more than twelve (12) months of service 17
credit upon retirement for accumulated unused sick leave accrued while 18
contributing to the retirement system from which the retirement benefit 19
is to be paid; 20
2. The service added to the member's service credit shall be used for 21
purposes of determining the member's annual retirement allowance 22
under KRS 78.510 to 78.852; 23
3. The servi ce added to the member's service credit shall not be used to 24
determine whether a member is eligible to receive a retirement 25
allowance under KRS 78.510 to 78.852; and 26
4. The cost of the service provided by this paragraph shall be paid by the 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 13 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
employer. 1
(4) The system shall compute the cost of the sick-leave credit of each retiring employee 2
and bill each employer with whom the employee accrued sick leave accordingly. 3
The employer shall remit payment within thirty (30) days from receipt of the bill. 4
(5) (a) As an alternative to subsections (1), (3), (4), and (6) of this section, any 5
agency participating in the County Employees Retirement System which has 6
formally adopted a sick -leave program that is universally administered to its 7
employees, or administered to a majority of eligible employees in accordance 8
with subsection (6) of this section, shall, at the time of termination, or as 9
provided in subsection (10) of Section 1 of this Act[KRS 161.155] in the case 10
of school boards, compensate the employee for unused s ick-leave days the 11
employee has accumulated which it is the uniform policy of the agency to 12
allow. 13
(b) The rate of compensation for each unused sick-leave day shall be based on the 14
daily salary rate calculated from the employee's current rate of pay. Payme nt 15
for unused sick -leave days shall be incorporated into the employee's final 16
compensation if the employee and employer make the regular employee and 17
employer contributions, respectively, on the sick-leave payment. 18
(c) The number of sick -leave days for whi ch the employee is compensated shall 19
be divided by the average number of working days per month in county 20
service and rounded to the nearest number of whole months. This number of 21
months shall be added to the employee's total service credit and to the numb er 22
of months used to determine creditable compensation, pursuant to KRS 23
78.510, but no more than sixty (60) months shall be used to determine final 24
compensation. For an employee who begins participating on or after 25
September 1, 2008, but prior to January 1 , 2014, the number of months added 26
to the employee's total service credit under this paragraph shall not exceed 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 14 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
twelve (12) months, and the additional service shall not be used to determine 1
whether a member is eligible to receive a retirement allowance und er KRS 2
78.510 to 78.852. 3
(6) Any city of the first class that has two (2) or more sick -leave programs for its 4
employees may purchase service credit with the retirement system for up to six (6) 5
months of unused sick leave for each retiring employee who participates in the sick-6
leave program administered to a majority of the eligible employees of the city. An 7
employee participating in a sick -leave program administered to a minority of the 8
eligible employees shall become eligible for the purchase of service cr edit under 9
this subsection when the employee commences participating in the sick -leave 10
program that is administered to a majority of the eligible employees of the city. 11
(7) The provisions of this section shall not apply to employees who begin participating 12
in the system on or after January 1, 2014, and no service credit shall be provided for 13
accumulated sick leave balances of those employees who begin participating in the 14
system on or after January 1, 2014. 15
Section 3. KRS 161.220 is amended to read as follows: 16
As used in KRS 161.220 to 161.716 and 161.990: 17
(1) "Retirement system" means the arrangement provided for in KRS 161.220 to 18
161.716 and 161.990 for payment of allowances to members; 19
(2) "Retirement allowance" means the amount annually payable during the course of 20
his or her natural life to a member who has been retired by reason of service; 21
(3) "Disability allowance" means the amount annually payable to a member retired by 22
reason of disability; 23
(4) "Member" means the commissioner of education, deputy commissioners, associate 24
commissioners, and all division directors in the State Department of Education, 25
employees participating in the system pursuant to KRS 196.167(3)(b)1., and any 26
full-time teacher or professional occupying a position requiring certification or 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 15 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
graduation from a four (4) year college or university, as a condition of employment, 1
and who is employed by public boards, institutions, or agencies as follows: 2
(a) Local boards of education and public charter schools if the public charter 3
school satisfies the criteria set by the Internal Revenue Servi ce to participate 4
in a governmental retirement plan; 5
(b) Eastern Kentucky University, Kentucky State University, Morehead State 6
University, Murray State University, Western Kentucky University, and any 7
community colleges established under the control of these universities; 8
(c) State-operated secondary area vocational education or area technology 9
centers, Kentucky School for the Blind, and Kentucky School for the Deaf; 10
(d) Other public education agencies as created by the General Assembly and 11
those members of the administrative staff of the Teachers' Retirement System 12
of the State of Kentucky whom the board of trustees may designate by 13
administrative regulation; 14
(e) Regional cooperative organizations formed by local boards of education or 15
other public educati onal institutions listed in this subsection, for the purpose 16
of providing educational services to the participating organizations; 17
(f) All full -time members of the staffs of the Kentucky Association of School 18
Administrators, Kentucky Education Association, Kentucky Vocational 19
Association, Kentucky High School Athletic Association, Kentucky 20
Academic Association, and the Kentucky School Boards Association who 21
were members of the Kentucky Teachers' Retirement System or were 22
qualified for a position covered by the system at the time of employment by 23
the association in the event that the board of directors of the respective 24
association petitions to be included. The board of trustees of the Kentucky 25
Teachers' Retirement System may designate by resolution whether p art-time 26
employees of the petitioning association are to be included. The state shall 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 16 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
make no contributions on account of these employees, either full -time or part-1
time. The association shall make the employer's contributions, including any 2
contribution th at is specified under KRS 161.550. The provisions of this 3
paragraph shall be applicable to persons in the employ of the associations on 4
or subsequent to July 1, 1972; 5
(g) Employees of the Council on Postsecondary Education who were employees 6
of the Departm ent for Adult Education and Literacy and who were members 7
of the Kentucky Teachers' Retirement System at the time the department was 8
transferred to the council pursuant to Executive Order 2003-600; 9
(h) The Office of Career and Technical Education; 10
(i) The Office of Vocational Rehabilitation; 11
(j) The Kentucky Educational Collaborative for State Agency Children; 12
(k) The Governor's Scholars Program; 13
(l) Any person who is retired for service from the retirement system and is 14
reemployed by an employer identified in this subsection in a position that the 15
board of trustees deems to be a member, except that any person who becomes 16
a member on or after January 1, 2022, and subsequently draws a monthly 17
lifetime retirement allowance, shall upon reemployment after retire ment not 18
earn a second retirement account; 19
(m) Employees of the former Cabinet for Workforce Development who are 20
transferred to the Kentucky Community and Technical College System and 21
who occupy positions covered by the Kentucky Teachers' Retirement System 22
shall remain in the Teachers' Retirement System. New employees occupying 23
these positions, as well as newly created positions qualifying for Teachers' 24
Retirement System coverage that would have previously been included in the 25
former Cabinet for Workforce D evelopment, shall be members of the 26
Teachers' Retirement System; 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 17 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
(n) Effective January 1, 1998, employees of state community colleges who are 1
transferred to the Kentucky Community and Technical College System shall 2
continue to participate in federal old ag e, survivors, disability, and hospital 3
insurance, and a retirement plan other than the Kentucky Teachers' Retirement 4
System offered by Kentucky Community and Technical College System. New 5
employees occupying positions in the Kentucky Community and Technica l 6
College System as referenced in KRS 164.5807(5) that would not have 7
previously been included in the former Cabinet for Workforce Development, 8
shall participate in federal old age, survivors, disability, and hospital 9
insurance and have a choice at the tim e of employment of participating in a 10
retirement plan provided by the Kentucky Community and Technical College 11
System, including participation in the Kentucky Teachers' Retirement System, 12
on the same basis as faculty of the state universities as provided i n KRS 13
161.540 and 161.620; 14
(o) Employees of the Office of General Counsel, the Office of Budget and 15
Administrative Services, and the Office of Quality and Human Resources 16
within the Office of the Secretary of the former Cabinet for Workforce 17
Development an d the commissioners of the former Department for Adult 18
Education and Literacy and the former Department for Technical Education 19
who were contributing to the Kentucky Teachers' Retirement System as of 20
July 15, 2000; 21
(p) Employees of the Kentucky Department of Education only who are graduates 22
of a four (4) year college or university, notwithstanding a substitution clause 23
within a job classification, and who are serving in a professional job 24
classification as defined by the department; 25
(q) The Governor's School for Entrepreneurs Program; 26
(r) Employees of the Office of Adult Education within the Department of 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 18 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
Workforce Development in the Education and Labor Cabinet who were 1
employees of the Council on Postsecondary Education, Kentucky Adult 2
Education Program and who were members of the Kentucky Teachers' 3
Retirement System at the time the Program was transferred to the cabinet 4
pursuant to Executive Orders 2019-0026 and 2019-0027; 5
(s) Employees of the Education Professional Standards Board who were 6
members of the K entucky Teachers' Retirement System at the time the 7
employees were transferred to the Kentucky Department of Education 8
pursuant to Executive Order 2020-590; and 9
(t) WeLeadCS, the virtual computer science career academy established in KRS 10
158.809; 11
(5) "Present teacher" means any teacher who was a teacher on or before July 1, 1940, 12
and became a member of the retirement system created by 1938 (1st Extra. Sess.) 13
Ky. Acts ch. 1, on the date of the inauguration of the system or within one (1) year 14
after that date , and any teacher who was a member of a local teacher retirement 15
system in the public elementary or secondary schools of the state on or before July 16
1, 1940, and continued to be a member of the system until he or she, with the 17
membership of the local retirement system, became a member of the state Teachers' 18
Retirement System or who becomes a member under the provisions of KRS 19
161.470(4); 20
(6) "New teacher" means any member not a present teacher; 21
(7) "Prior service" means the number of years during which the member was a teacher 22
in Kentucky prior to July 1, 1941, except that not more than thirty (30) years' prior 23
service shall be allowed or credited to any teacher; 24
(8) "Subsequent service" means the number of years during which the teacher is a 25
member of the Teachers' Retirement System after July 1, 1941; 26
(9) "Final average salary" means the average of the five (5) highest annual salaries 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 19 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
which the member has received for service in a covered position and on which the 1
member has made contributions, or on which the public board, institution, or 2
agency has picked -up member contributions pursuant to KRS 161.540(2), or the 3
average of the five (5) years of highest salaries as defined in KRS 61.680(2)(a), 4
which shall include picked -up member contributions. Additionally, the board of 5
trustees may approve a final averag e salary based upon the average of the three (3) 6
highest salaries for individuals who become members prior to January 1, 2022, who 7
are at least fifty -five (55) years of age and have a minimum of twenty -seven (27) 8
years of Kentucky service credit. However, if any of the five (5) or three (3) highest 9
annual salaries used to calculate the final average salary was paid within the three 10
(3) years immediately prior to the date of the member's retirement for individuals 11
who become members prior to January 1, 2022, or within the five (5) years 12
immediately prior to the date of the member's retirement for individuals who 13
become members on or after January 1, 2022, the amount of salary to be included 14
for each of those three (3) years or five (5) years, as applicable, f or the purpose of 15
calculating the final average salary shall be limited to the lesser of: 16
(a) The member's actual salary; or 17
(b) The member's annual salary that was used for retirement purposes during each 18
of the prior three (3) years or five (5) years, as applicable, plus a percentage 19
increase equal to the percentage increase received by all other members 20
employed by the public board, institution, or agency, or for members of 21
school districts, the highest percentage increase received by members on any 22
one (1) rank and step of the salary schedule of the school district. The increase 23
shall be computed on the salary that was used for retirement purposes. The 24
board of trustees may promulgate an administrative regulation in accordance 25
with KRS Chapter 13A to est ablish a methodology for measuring the 26
limitation so that the combined increases in salary for each of the last three (3) 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 20 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
full years of salary prior to retirement shall not exceed the total permissible 1
percentage increase received by other members of the e mployer for the same 2
three (3) year period. 3
For individuals who became members of the retirement system prior to July 1, 4
2021, this limitation shall not apply if the member receives an increase in salary in a 5
percentage exceeding that received by the othe r members, and this increase was 6
accompanied by a corresponding change in position or in length of employment. 7
The board of trustees may promulgate an administrative regulation in accordance 8
with KRS Chapter 13A to provide definitions for a corresponding c hange in 9
position or in length of employment. This limitation shall also not apply to the 10
payment to a member for accrued annual leave if the individual becomes a member 11
before July 1, 2008, or accrued sick leave which is authorized by statute and which 12
shall, for individuals subject to KRS 161.155(10) who became nonuniversity 13
members of the system prior to January 1, 2022, be included as part of a retiring 14
member's annual compensation for the member's last year of active service; 15
(10) "Annual compensation" means the total salary received by a member as 16
compensation for all services performed in employment covered by the retirement 17
system during a fiscal year. Annual compensation shall not include payment for any 18
benefit or salary adjustments made by the pub lic board, institution, or agency to the 19
member or on behalf of the member which is not available as a benefit or salary 20
adjustment to other members employed by that public board, institution, or agency. 21
Annual compensation shall not include the salary supplement received by a member 22
under KRS 157.197(2)(c), 158.6455, or 158.782 on or after July 1, 1996 , or 23
compensation paid pursuant to subsection (4)(b) of Section 1 of this Act . Under 24
no circumstances shall annual compensation include compensation that is earned by 25
a member while on assignment to an organization or agency that is not a public 26
board, institution, or agency listed in subsection (4) of this section. In the event that 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 21 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
federal law requires that a member continue membership in the retirement syst em 1
even though the member is on assignment to an organization or agency that is not a 2
public board, institution, or agency listed in subsection (4) of this section, the 3
member's annual compensation for retirement purposes shall be deemed to be the 4
annual compensation, as limited by subsection (9) of this section, last earned by the 5
member while still employed solely by and providing services directly to a public 6
board, institution, or agency listed in subsection (4) of this section. The board of 7
trustees sh all determine if any benefit or salary adjustment qualifies as annual 8
compensation. For an individual who becomes a member on or after July 1, 2008, 9
annual compensation shall not include lump -sum payments upon termination of 10
employment for accumulated annual or compensatory leave; 11
(11) "Age of member" means the age attained on the first day of the month immediately 12
following the birthdate of the member. This definition is limited to retirement 13
eligibility and does not apply to tenure of members; 14
(12) "Employ," and derivatives thereof, means relationships under which an individual 15
provides services to an employer as an employee, as an independent contractor, as 16
an employee of a third party, or under any other arrangement as long as the services 17
provided to t he employer are provided in a position that would otherwise be 18
covered by the Kentucky Teachers' Retirement System and as long as the services 19
are being provided to a public board, institution, or agency listed in subsection (4) 20
of this section; 21
(13) "Regular interest" means: 22
(a) For an individual who becomes a member prior to July 1, 2008, interest at 23
three percent (3%) per annum; 24
(b) For an individual who becomes a member on or after July 1, 2008, but prior to 25
January 1, 2022, interest at two and one -half percent (2.5%) per annum for 26
purposes of crediting interest to the teacher savings account or any other 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 22 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
contributions made by the employee that are refundable to the employee upon 1
termination of employment; and 2
(c) For an individual who becomes a member o n or after January 1, 2022, the 3
rolling five (5) year yield on a thirty (30) year United States Treasury bond as 4
of the end of May prior to the most recently completed fiscal year, except 5
that: 6
1. Once the member has at least sixty (60) months of service i n the system 7
it shall mean interest at two and one -half percent (2.5%) per annum for 8
purposes of crediting interest to employee contributions in the 9
foundational benefit component or any other contributions made by the 10
employee to the foundational benefit component that are refundable to 11
the employee upon termination of employment; and 12
2. The board shall have the authority to adjust the regular interest rate for 13
individuals who become members on or after January 1, 2022, in 14
accordance with KRS 161.633 and 161.634; 15
(14) "Accumulated contributions" means the contributions of a member to the teachers' 16
savings fund, including picked -up member contributions as described in KRS 17
161.540(2), plus accrued regular interest; 18
(15) "Annuitant" means a person who receives a retirement allowance or a disability 19
allowance; 20
(16) "Local retirement system" means any teacher retirement or annuity system created 21
in any public school district in Kentucky in accordance with the laws of Kentucky; 22
(17) "Fiscal year" means the twelve (12) month period from July 1 to June 30. The 23
retirement plan year is concurrent with this fiscal year. A contract for a member 24
employed by a local board of education may not exceed two hundred sixty -one 25
(261) days in the fiscal year; 26
(18) "Public schools" means the schools and other institutions mentioned in subsection 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 23 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
(4) of this section; 1
(19) "Dependent" as used in KRS 161.520 and 161.525 means a person who was 2
receiving, at the time of death of the member, at least one -half (1/2) of the support 3
from the member for maintenance, including board, lodging, medical care, and 4
related costs; 5
(20) "Active contributing member" means a member currently making contributions to 6
the Teachers' Retirement System, who made contributions in the immediate 7
preceding fiscal year, for whom picked -up member contributions are currently 8
being made, or for whom these contributions were made in the immediate 9
preceding fiscal year; 10
(21) "Full-time" means employment in a position that requires services on a continuing 11
basis equal to at least seven -tenths (7/10) of normal full -time service on a fiscal 12
year basis; 13
(22) "Full actuarial cost," when used to determine the payment or payments that a 14
member must pay for service credit means the actuarial value of all costs associated 15
with th e enhancement of a member's benefits or eligibility for benefit 16
enhancements, including health insurance supplement payments made by the 17
retirement system. The board may promulgate administrative regulations in 18
accordance with KRS Chapter 13A to provide th e methodology for the assessment 19
of and procedures for the payment and collection of the full actuarial cost of the 20
purchased service. The actuary for the retirement system shall determine the full 21
actuarial value costs and actuarial cost factor tables as provided in KRS 161.400; 22
(23) "Last annual compensation" means the annual compensation, as defined by 23
subsection (10) of this section and as limited by subsection (9) of this section, 24
earned by the member during the most recent period of contributing servi ce, either 25
consecutive or nonconsecutive, that is sufficient to provide the member with one (1) 26
full year of service credit in the Kentucky Teachers' Retirement System, and which 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 24 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
compensation is used in calculating the member's initial retirement allowance , 1
excluding bonuses, retirement incentives, payments for accumulated sick leave, 2
annual, personal, and compensatory leave, and any other lump -sum payment. For 3
an individual who becomes a member on or after July 1, 2008, payments for annual 4
or compensatory leave shall not be included in determining the member's last 5
annual compensation; 6
(24) "Participant" means a member, as defined by subsection (4) of this section, or an 7
annuitant, as defined by subsection (15) of this section; 8
(25) "Qualified domestic rela tions 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
(26) "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
(27) "University member" means an individual who becomes a member through 17
employment with an employer specified in subsection (4)(b) and (n) of this section; 18
(28) "Nonuniversity member" means an individual who becomes a member through 19
employment with an employer specified under subsection (4) of this section, except 20
for those members e mployed by an employer specified in subsection (4)(b) and (n) 21
of this section; 22
(29) "Accumulated employer contribution" means the employer contribution deposited 23
to a member's account through the supplemental benefit component and regular 24
interest credited on such amounts as provided by KRS 161.635 for nonuniversity 25
members and KRS 161.636 for university members; 26
(30) "Accumulated account balance" means: 27
UNOFFICIAL COPY 26 RS SB 124/GA
Page 25 of 25
SB012410.100 - 1151 - XXXX 2/23/2026 5:10 PM GA
(a) For members who began participating in the system prior to January 1, 2022, 1
the member's accumulated contributions; or 2
(b) For members who began participating in the system on or after January 1, 3
2022, the combined sum of the member's accumulated contributions and the 4
member's accumulated employer contributions; 5
(31) "Foundational benefit component" means the benefits provided by KRS 161.220 to 6
161.716 to individuals who become members on or after January 1, 2022, except 7
for the supplemental benefit component and retiree health benefits set forth in KRS 8
161.675; and 9
(32) "Supplemental benefit component" means: 10
(a) The benefit established pursuant to KRS 161.635 for individuals who become 11
nonuniversity members on or after January 1, 2022; or 12
(b) The benefit established pursuant to KRS 161.636 for individuals who become 13
university members on or after January 1, 2022. 14