KS
Kansas Senate Bill SB64

Kansas 2025-2026 Regular Session

Kansas Senate Bill SB64 Compare Versions

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1+Session of 2025
12 SENATE BILL No. 64
2-AN ACT concerning retirement and pensions; relating to the Kansas public employees
3-retirement system; adjusting certain internal references; extending the time for filing
4-administrative appeals; updating provisions relating to compliance with the federal
5-internal revenue code; amending K.S.A. 74-4902 and 74-4904 and K.S.A. 2024
6-Supp. 74-49,123 and repealing the existing sections.
3+By Committee on Financial Institutions and Insurance
4+1-23
5+AN ACT concerning retirement and pensions; relating to the Kansas public
6+employees retirement system; adjusting certain internal references;
7+extending the time for filing administrative appeals; updating
8+provisions relating to compliance with the federal internal revenue
9+code; amending K.S.A. 74-4902 and 74-4904 and K.S.A. 2024 Supp.
10+74-49,123 and repealing the existing sections.
711 Be it enacted by the Legislature of the State of Kansas:
8-Section 1. K.S.A. 74-4902 is hereby amended to read as follows:
9-74-4902. As used in articles 49 and 49a of chapter 74 of the Kansas
10-Statutes Annotated, and amendments thereto, unless otherwise provided
11-or the context otherwise requires:
12-(1) "Accumulated contributions" means the sum of all
13-contributions by a member to the system which are credited to the
14-member's account, with interest allowed thereon;
15-(2) "acts" means the provisions of articles 49 and 49a of the
16-Kansas Statutes Annotated, and amendments thereto;
17-(3) "actuarial equivalent" means an annuity or benefit of equal
18-value to the accumulated contributions, annuity or benefit, when
19-computed upon the basis of the actuarial tables in use by the system.
20-Whenever the amount of any benefit is to be determined on the basis of
21-actuarial assumptions, the assumptions shall be specified in a way that
22-precludes employer discretion;
23-(4) "actuarial tables" means the actuarial tables approved and in
24-use by the board at any given time;
12+Section 1. K.S.A. 74-4902 is hereby amended to read as follows: 74-
13+4902. As used in articles 49 and 49a of chapter 74 of the Kansas Statutes
14+Annotated, and amendments thereto, unless otherwise provided or the
15+context otherwise requires:
16+(1) "Accumulated contributions" means the sum of all contributions
17+by a member to the system which are credited to the member's account,
18+with interest allowed thereon;
19+(2) "acts" means the provisions of articles 49 and 49a of the Kansas
20+Statutes Annotated, and amendments thereto;
21+(3) "actuarial equivalent" means an annuity or benefit of equal value
22+to the accumulated contributions, annuity or benefit, when computed upon
23+the basis of the actuarial tables in use by the system. Whenever the amount
24+of any benefit is to be determined on the basis of actuarial assumptions,
25+the assumptions shall be specified in a way that precludes employer
26+discretion;
27+(4) "actuarial tables" means the actuarial tables approved and in use
28+by the board at any given time;
2529 (5) "actuary" means the actuary or firm of actuaries employed or
2630 retained by the board at any given time;
2731 (6) "agent" means the individual designated by each participating
2832 employer through whom system transactions and communication are
2933 directed;
30-(7) "beneficiary" means, subject to the provisions of K.S.A. 74-
31-4927, and amendments thereto, any natural person or persons, estate or
32-trust, or any combination thereof, named by a member to receive any
33-benefits as provided for by this act. Designations of beneficiaries by a
34-member who is a member of more than one retirement system made on
35-or after July 1, 1987, shall be the basis of any benefits payable under all
36-systems unless otherwise provided by law. Except as otherwise
37-provided by subsection (33) of this section (32), if there is no named
38-beneficiary living at the time of the member's death, any benefits
39-provided for by this act shall be paid to: (A) The member's surviving
40-spouse; (B) the member's dependent child or children; (C) the member's
41-dependent parent or parents; (D) the member's nondependent child or
42-children; (E) the member's nondependent parent or parents; or (F) the
43-estate of the deceased member; in the order of preference as specified
44-in this subsection;
34+(7) "beneficiary" means, subject to the provisions of K.S.A. 74-4927,
35+and amendments thereto, any natural person or persons, estate or trust, or
36+any combination thereof, named by a member to receive any benefits as
37+provided for by this act. Designations of beneficiaries by a member who is
38+a member of more than one retirement system made on or after July 1,
39+1987, shall be the basis of any benefits payable under all systems unless
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76+otherwise provided by law. Except as otherwise provided by subsection
77+(33) of this section (32), if there is no named beneficiary living at the time
78+of the member's death, any benefits provided for by this act shall be paid
79+to: (A) The member's surviving spouse; (B) the member's dependent child
80+or children; (C) the member's dependent parent or parents; (D) the
81+member's nondependent child or children; (E) the member's nondependent
82+parent or parents; or (F) the estate of the deceased member; in the order of
83+preference as specified in this subsection;
4584 (8) "board of trustees," "board" or "trustees" means the managing
4685 body of the system which is known as the Kansas public employees
4786 retirement system board of trustees;
48-(9) "compensation" means, except as otherwise provided, all
49-salary, wages and other remuneration payable to a member for personal
50-services performed for a participating employer, including maintenance
51-or any allowance in lieu thereof provided a member as part of
52-compensation, but not including reimbursement for travel or moving
53-expenses or on and after July 1, 1994, payment pursuant to an early
54-retirement incentive program made prior to the retirement of the
55-member. Beginning with the employer's fiscal year which that begins in
56-calendar year 1991 or for employers other than the state of Kansas,
57-beginning with the fiscal year which that begins in calendar year 1992,
58-when the compensation of a member who remains in substantially the
59-same position during any two consecutive years of participating service
60-used in calculating final average salary is increased by an amount SENATE BILL No. 64—page 2
61-which exceeds 15%, then the amount of such increase which exceeds
62-15% shall not be included in compensation, except that: (A) Any
63-amount of compensation for accumulated sick leave or vacation or
64-annual leave paid to the member; (B) any increase in compensation for
65-any member due to a reclassification or reallocation of such member's
66-position or a reassignment of such member's job classification to a
67-higher range or level; and (C) any increase in compensation as provided
68-in any contract entered into prior to January 1, 1991, and still in force
69-on the effective date of this act, pursuant to an early retirement
70-incentive program as provided in K.S.A. 72-5395 et seq., and
71-amendments thereto, shall be included in the amount of compensation
72-of such member used in determining such member's final average
73-salary and shall not be subject to the 15% limitation provided in this
74-subsection. Any contributions by such member on the amount of such
75-increase which exceeds 15% which is not included in compensation
76-shall be returned to the member. Unless otherwise provided by law,
77-beginning with the employer's fiscal year coinciding with or following
78-July 1, 1985, compensation shall include any amounts for tax sheltered
79-annuities or deferred compensation plans. Beginning with the
87+(9) "compensation" means, except as otherwise provided, all salary,
88+wages and other remuneration payable to a member for personal services
89+performed for a participating employer, including maintenance or any
90+allowance in lieu thereof provided a member as part of compensation, but
91+not including reimbursement for travel or moving expenses or on and after
92+July 1, 1994, payment pursuant to an early retirement incentive program
93+made prior to the retirement of the member. Beginning with the employer's
94+fiscal year which that begins in calendar year 1991 or for employers other
95+than the state of Kansas, beginning with the fiscal year which that begins
96+in calendar year 1992, when the compensation of a member who remains
97+in substantially the same position during any two consecutive years of
98+participating service used in calculating final average salary is increased
99+by an amount which exceeds 15%, then the amount of such increase which
100+exceeds 15% shall not be included in compensation, except that: (A) Any
101+amount of compensation for accumulated sick leave or vacation or annual
102+leave paid to the member; (B) any increase in compensation for any
103+member due to a reclassification or reallocation of such member's position
104+or a reassignment of such member's job classification to a higher range or
105+level; and (C) any increase in compensation as provided in any contract
106+entered into prior to January 1, 1991, and still in force on the effective date
107+of this act, pursuant to an early retirement incentive program as provided
108+in K.S.A. 72-5395 et seq., and amendments thereto, shall be included in
109+the amount of compensation of such member used in determining such
110+member's final average salary and shall not be subject to the 15%
111+limitation provided in this subsection. Any contributions by such member
112+on the amount of such increase which exceeds 15% which is not included
113+in compensation shall be returned to the member. Unless otherwise
114+provided by law, beginning with the employer's fiscal year coinciding with
115+or following July 1, 1985, compensation shall include any amounts for tax
116+sheltered annuities or deferred compensation plans. Beginning with the
80117 employer's fiscal year which that begins in calendar year 1991,
81-compensation shall include amounts under sections 403b, 457 and 125
82-of the federal internal revenue code of 1986 and, as the board deems
83-appropriate, any other section of the federal internal revenue code of
84-1986 which defers or excludes amounts from inclusion in income. For
85-purposes of applying limits under the federal internal revenue code
86-"compensation" shall have the meaning as provided in K.S.A. 74-
87-49,123, and amendments thereto. For purposes of this subsection and
88-application to the provisions of subsection (4) of K.S.A. 74-4927(4),
89-and amendments thereto, "compensation" shall not include any
90-payments made by the state board of regents pursuant to the provisions
91-of subsection (5) of K.S.A. 74-4927a(5), and amendments thereto, to a
92-member of the faculty or other person defined in subsection (1)(a) of
93-K.S.A. 74-4925(1)(a), and amendments thereto;
118+compensation shall include amounts under sections 403b, 457 and 125 of
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162+the federal internal revenue code of 1986 and, as the board deems
163+appropriate, any other section of the federal internal revenue code of 1986
164+which defers or excludes amounts from inclusion in income. For purposes
165+of applying limits under the federal internal revenue code "compensation"
166+shall have the meaning as provided in K.S.A. 74-49,123, and amendments
167+thereto. For purposes of this subsection and application to the provisions
168+of subsection (4) of K.S.A. 74-4927(4), and amendments thereto,
169+"compensation" shall not include any payments made by the state board of
170+regents pursuant to the provisions of subsection (5) of K.S.A. 74-4927a(5),
171+and amendments thereto, to a member of the faculty or other person
172+defined in subsection (1)(a) of K.S.A. 74-4925(1)(a), and amendments
173+thereto;
94174 (10) "credited service" means the sum of participating service and
95175 prior service and in no event shall credited service include any service
96-which that is credited under another retirement plan authorized under
97-any law of this state;
176+which that is credited under another retirement plan authorized under any
177+law of this state;
98178 (11) "dependent" means a parent or child of a member who is
99179 dependent upon the member for at least
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101181 /2 of such parent or child's
102182 support;
103-(12) "effective date" means the date upon which the system
104-becomes effective by operation of law;
105-(13) "eligible employer" means the state of Kansas, and any
106-county, city, township, special district or any instrumentality of any one
107-or several of the aforementioned or any noncommercial public
108-television or radio station located in this state which that receives state
109-funds allocated by the Kansas public broadcasting commission whose
110-employees are covered by social security. If a class or several classes of
111-employees of any above defined employer are not covered by social
112-security, such employer shall be deemed an eligible employer only with
113-respect to such class or those classes of employees who are covered by
114-social security;
115-(14) "employee" means any appointed or elective officer or
116-employee of a participating employer whose employment is not
117-seasonal or temporary and whose employment requires at least 1,000
118-hours of work per year, and any such officer or employee who is
119-concurrently employed performing similar or related tasks by two or
120-more participating employers, who each remit employer and employee
121-contributions on behalf of such officer or employee to the system, and SENATE BILL No. 64—page 3
122-whose combined employment is not seasonal or temporary, and whose
123-combined employment requires at least 1,000 hours of work per year,
124-but not including: (A) Any employee who is a contributing member of
125-the United States civil service retirement system; (B) any employee
126-who is a contributing member of the federal employees retirement
127-system; (C) any employee who is a leased employee as provided in
128-section 414 of the federal internal revenue code of a participating
129-employer; and (D) any employee or class of employees specifically
130-exempted by law. After June 30, 1975, no person who is otherwise
131-eligible for membership in the Kansas public employees retirement
132-system shall be barred from such membership by reason of coverage
133-by, eligibility for or future eligibility for a retirement annuity under the
134-provisions of K.S.A. 74-4925, and amendments thereto, except that no
135-person shall receive service credit under the Kansas public employees
136-retirement system for any period of service for which benefits accrue or
137-are granted under a retirement annuity plan under the provisions of
138-K.S.A. 74-4925, and amendments thereto. After June 30, 1982, no
139-person who is otherwise eligible for membership in the Kansas public
140-employees retirement system shall be barred from such membership by
141-reason of coverage by, eligibility for or future eligibility for any benefit
142-under another retirement plan authorized under any law of this state,
143-except that no such person shall receive service credit under the Kansas
144-public employees retirement system for any period of service for which
145-any benefit accrues or is granted under any such retirement plan.
146-Employee shall include persons who are in training at or employed by,
147-or both, a sheltered workshop for the blind operated by the secretary for
148-children and families. The entry date for such persons shall be the
149-beginning of the first pay period of the fiscal year commencing in
150-calendar year 1986. Such persons shall be granted prior service credit
151-in accordance with K.S.A. 74-4913, and amendments thereto. However,
152-such persons classified as home industry employees shall not be
153-covered by the retirement system. Employees shall include any member
154-of a board of county commissioners of any county and any council
155-member or commissioner of a city whose compensation is equal to or
156-exceeds $5,000 per year;
183+(12) "effective date" means the date upon which the system becomes
184+effective by operation of law;
185+(13) "eligible employer" means the state of Kansas, and any county,
186+city, township, special district or any instrumentality of any one or several
187+of the aforementioned or any noncommercial public television or radio
188+station located in this state which that receives state funds allocated by the
189+Kansas public broadcasting commission whose employees are covered by
190+social security. If a class or several classes of employees of any above
191+defined employer are not covered by social security, such employer shall
192+be deemed an eligible employer only with respect to such class or those
193+classes of employees who are covered by social security;
194+(14) "employee" means any appointed or elective officer or employee
195+of a participating employer whose employment is not seasonal or
196+temporary and whose employment requires at least 1,000 hours of work
197+per year, and any such officer or employee who is concurrently employed
198+performing similar or related tasks by two or more participating
199+employers, who each remit employer and employee contributions on
200+behalf of such officer or employee to the system, and whose combined
201+employment is not seasonal or temporary, and whose combined
202+employment requires at least 1,000 hours of work per year, but not
203+including: (A) Any employee who is a contributing member of the United
204+States civil service retirement system; (B) any employee who is a
205+contributing member of the federal employees retirement system; (C) any
206+employee who is a leased employee as provided in section 414 of the
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250+federal internal revenue code of a participating employer; and (D) any
251+employee or class of employees specifically exempted by law. After June
252+30, 1975, no person who is otherwise eligible for membership in the
253+Kansas public employees retirement system shall be barred from such
254+membership by reason of coverage by, eligibility for or future eligibility
255+for a retirement annuity under the provisions of K.S.A. 74-4925, and
256+amendments thereto, except that no person shall receive service credit
257+under the Kansas public employees retirement system for any period of
258+service for which benefits accrue or are granted under a retirement annuity
259+plan under the provisions of K.S.A. 74-4925, and amendments thereto.
260+After June 30, 1982, no person who is otherwise eligible for membership
261+in the Kansas public employees retirement system shall be barred from
262+such membership by reason of coverage by, eligibility for or future
263+eligibility for any benefit under another retirement plan authorized under
264+any law of this state, except that no such person shall receive service credit
265+under the Kansas public employees retirement system for any period of
266+service for which any benefit accrues or is granted under any such
267+retirement plan. Employee shall include persons who are in training at or
268+employed by, or both, a sheltered workshop for the blind operated by the
269+secretary for children and families. The entry date for such persons shall
270+be the beginning of the first pay period of the fiscal year commencing in
271+calendar year 1986. Such persons shall be granted prior service credit in
272+accordance with K.S.A. 74-4913, and amendments thereto. However, such
273+persons classified as home industry employees shall not be covered by the
274+retirement system. Employees shall include any member of a board of
275+county commissioners of any county and any council member or
276+commissioner of a city whose compensation is equal to or exceeds $5,000
277+per year;
157278 (15) "entry date" means the date as of which an eligible employer
158279 joins the system. The first entry date pursuant to this act is January 1,
159280 1962;
160-(16) "executive director" means the managing officer of the
161-system employed by the board under this act;
162-(17) "final average salary" means in the case of a member who
163-retires prior to January 1, 1977, and in the case of a member who retires
164-after January 1, 1977, and who has less than five years of participating
165-service after January 1, 1967, the average highest annual compensation
166-paid to such member for any five years of the last 10 years of
167-participating service immediately preceding retirement or termination
168-of employment, or in the case of a member who retires on or after
169-January 1, 1977, and who has five or more years of participating
170-service after January 1, 1967, the average highest annual compensation
171-paid to such member on or after January 1, 1967, for any five years of
172-participating service preceding retirement or termination of
173-employment, or, in any case, if participating service is less than five
174-years, then the average annual compensation paid to the member during
175-the full period of participating service, or, in any case, if the member
176-has less than one calendar year of participating service such member's
177-final average salary shall be computed by multiplying such member's
178-highest monthly salary received in that year by 12; in the case of a
179-member who became a member under subsection (3) of K.S.A. 74-
180-4925(3), and amendments thereto, or who became a member with a SENATE BILL No. 64—page 4
181-participating employer as defined in subsection (3) of K.S.A. 74-
182-4931(3), and amendments thereto, and who elects to have
183-compensation paid in other than 12 equal installments, such
184-compensation shall be annualized as if the member had elected to
185-receive 12 equal installments for any such periods preceding
186-retirement; in the case of a member who retires after July 1, 1987, the
187-average highest annual compensation paid to such member for any four
188-years of participating service preceding retirement or termination of
189-employment; in the case of a member who retires on or after July 1,
190-1993, whose date of membership in the system is prior to July 1, 1993,
191-and any member who is in such member's membership waiting period
192-on July 1, 1993, and whose date of membership in the system is on or
193-after July 1, 1993, the average highest annual compensation, as defined
194-in subsection (9), paid to such member for any four years of
195-participating service preceding retirement or termination of
196-employment or the average highest annual salary, as defined in
197-subsection (34) (33), paid to such member for any three years of
198-participating service preceding retirement or termination of
199-employment, whichever is greater; and in the case of a member who
200-retires on or after July 1, 1993, and whose date of membership in the
201-system is on or after July 1, 1993, the average highest annual salary, as
202-defined in subsection (34) (33), paid to such member for any three
203-years of participating service preceding retirement or termination of
204-employment. Final average salary shall not include any purchase of
205-participating service credit by a member as provided in subsection (2)
206-of K.S.A. 74-4919h(2), and amendments thereto, which is completed
207-within five years of retirement. For any application to purchase or
208-repurchase service credit for a certain period of service as provided by
209-law received by the system after May 17, 1994, for any member who
210-will have contributions deducted from such member's compensation at
211-a percentage rate equal to two or three times the employee's rate of
212-contribution or will begin paying to the system a lump-sum amount for
213-such member's purchase or repurchase and such deductions or lump-
214-sum payment commences after the commencement of the first payroll
215-period in the third quarter, "final average salary" shall not include any
216-amount of compensation or salary which is based on such member's
217-purchase or repurchase. Any application to purchase or repurchase
218-multiple periods of service shall be treated as multiple applications. For
219-purposes of this subsection, the date that such member is first hired as
220-an employee for members who are employees of employers that elected
221-to participate in the system on or after January 1, 1994, shall be the date
222-that such employee's employer elected to participate in the system. In
223-the case of any former member who was eligible for assistance
224-pursuant to K.S.A. 74-4925, and amendments thereto, prior to July 1,
225-1998, for the purpose of calculating final average salary of such
226-member, such member's final average salary shall be based on such
227-member's salary while a member of the system or while eligible for
228-assistance pursuant to K.S.A. 74-4925, and amendments thereto,
229-whichever is greater;
230-(18) "fiscal year" means, for the Kansas public employees
231-retirement system, the period commencing July 1 of any year and
232-ending June 30 of the next;
281+(16) "executive director" means the managing officer of the system
282+employed by the board under this act;
283+(17) "final average salary" means in the case of a member who retires
284+prior to January 1, 1977, and in the case of a member who retires after
285+January 1, 1977, and who has less than five years of participating service
286+after January 1, 1967, the average highest annual compensation paid to
287+such member for any five years of the last 10 years of participating service
288+immediately preceding retirement or termination of employment, or in the
289+case of a member who retires on or after January 1, 1977, and who has five
290+or more years of participating service after January 1, 1967, the average
291+highest annual compensation paid to such member on or after January 1,
292+1967, for any five years of participating service preceding retirement or
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336+termination of employment, or, in any case, if participating service is less
337+than five years, then the average annual compensation paid to the member
338+during the full period of participating service, or, in any case, if the
339+member has less than one calendar year of participating service such
340+member's final average salary shall be computed by multiplying such
341+member's highest monthly salary received in that year by 12; in the case of
342+a member who became a member under subsection (3) of K.S.A. 74-
343+4925(3), and amendments thereto, or who became a member with a
344+participating employer as defined in subsection (3) of K.S.A. 74-4931(3),
345+and amendments thereto, and who elects to have compensation paid in
346+other than 12 equal installments, such compensation shall be annualized as
347+if the member had elected to receive 12 equal installments for any such
348+periods preceding retirement; in the case of a member who retires after
349+July 1, 1987, the average highest annual compensation paid to such
350+member for any four years of participating service preceding retirement or
351+termination of employment; in the case of a member who retires on or
352+after July 1, 1993, whose date of membership in the system is prior to July
353+1, 1993, and any member who is in such member's membership waiting
354+period on July 1, 1993, and whose date of membership in the system is on
355+or after July 1, 1993, the average highest annual compensation, as defined
356+in subsection (9), paid to such member for any four years of participating
357+service preceding retirement or termination of employment or the average
358+highest annual salary, as defined in subsection (34) (33), paid to such
359+member for any three years of participating service preceding retirement
360+or termination of employment, whichever is greater; and in the case of a
361+member who retires on or after July 1, 1993, and whose date of
362+membership in the system is on or after July 1, 1993, the average highest
363+annual salary, as defined in subsection (34) (33), paid to such member for
364+any three years of participating service preceding retirement or termination
365+of employment. Final average salary shall not include any purchase of
366+participating service credit by a member as provided in subsection (2) of
367+K.S.A. 74-4919h(2), and amendments thereto, which is completed within
368+five years of retirement. For any application to purchase or repurchase
369+service credit for a certain period of service as provided by law received
370+by the system after May 17, 1994, for any member who will have
371+contributions deducted from such member's compensation at a percentage
372+rate equal to two or three times the employee's rate of contribution or will
373+begin paying to the system a lump-sum amount for such member's
374+purchase or repurchase and such deductions or lump-sum payment
375+commences after the commencement of the first payroll period in the third
376+quarter, "final average salary" shall not include any amount of
377+compensation or salary which is based on such member's purchase or
378+repurchase. Any application to purchase or repurchase multiple periods of
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422+service shall be treated as multiple applications. For purposes of this
423+subsection, the date that such member is first hired as an employee for
424+members who are employees of employers that elected to participate in the
425+system on or after January 1, 1994, shall be the date that such employee's
426+employer elected to participate in the system. In the case of any former
427+member who was eligible for assistance pursuant to K.S.A. 74-4925, and
428+amendments thereto, prior to July 1, 1998, for the purpose of calculating
429+final average salary of such member, such member's final average salary
430+shall be based on such member's salary while a member of the system or
431+while eligible for assistance pursuant to K.S.A. 74-4925, and amendments
432+thereto, whichever is greater;
433+(18) "fiscal year" means, for the Kansas public employees retirement
434+system, the period commencing July 1 of any year and ending June 30 of
435+the next;
233436 (19) "Kansas public employees retirement fund" means the fund
234-created by this act for payment of expenses and benefits under the
235-system and referred to as the fund;
236-(20) "leave of absence" means a period of absence from
237-employment without pay, authorized and approved by the employer,
238-and which after the effective date does not exceed one year;
239-(21) "member" means an eligible employee who is in the system SENATE BILL No. 64—page 5
240-and is making the required employee contributions; any former
241-employee who has made the required contributions to the system and
242-has not received a refund if such member is within five years of
243-termination of employment with a participating employer; or any
244-former employee who has made the required contributions to the
245-system, has not yet received a refund and has been granted a vested
246-benefit;
247-(22) "military service" means service in the uniformed forces of
248-the United States, for which retirement benefit credit must be given
249-under the provisions of USERRA or service in the armed forces of the
250-United States or in the commissioned corps of the United States public
251-health service, which service is immediately preceded by a period of
252-employment as an employee or by entering into an employment
253-contract with a participating employer and is followed by return to
254-employment as an employee with the same or another participating
255-employer within 12 months immediately following discharge from such
256-military service, except that if the board determines that such return
257-within 12 months was made impossible by reason of a service-
258-connected disability, the period within which the employee must return
259-to employment with a participating employer shall be extended not
260-more than two years from the date of discharge or separation from
261-military service;
437+created by this act for payment of expenses and benefits under the system
438+and referred to as the fund;
439+(20) "leave of absence" means a period of absence from employment
440+without pay, authorized and approved by the employer, and which after the
441+effective date does not exceed one year;
442+(21) "member" means an eligible employee who is in the system and
443+is making the required employee contributions; any former employee who
444+has made the required contributions to the system and has not received a
445+refund if such member is within five years of termination of employment
446+with a participating employer; or any former employee who has made the
447+required contributions to the system, has not yet received a refund and has
448+been granted a vested benefit;
449+(22) "military service" means service in the uniformed forces of the
450+United States, for which retirement benefit credit must be given under the
451+provisions of USERRA or service in the armed forces of the United States
452+or in the commissioned corps of the United States public health service,
453+which service is immediately preceded by a period of employment as an
454+employee or by entering into an employment contract with a participating
455+employer and is followed by return to employment as an employee with
456+the same or another participating employer within 12 months immediately
457+following discharge from such military service, except that if the board
458+determines that such return within 12 months was made impossible by
459+reason of a service-connected disability, the period within which the
460+employee must return to employment with a participating employer shall
461+be extended not more than two years from the date of discharge or
462+separation from military service;
262463 (23) "normal retirement date" means the date on or after which a
263464 member may retire with full retirement benefits pursuant to K.S.A. 74-
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264508 4914, and amendments thereto;
265509 (24) "participating employer" means an eligible employer who has
266510 agreed to make contributions to the system on behalf of its employees;
267-(25) "participating service" means the period of employment after
268-the entry date for which credit is granted a member;
511+(25) "participating service" means the period of employment after the
512+entry date for which credit is granted a member;
269513 (26) "prior service" means the period of employment of a member
270-prior to the entry date for which credit is granted a member under this
271-act;
272-(27) "prior service annual salary" means the highest annual salary,
273-not including any amounts received as payment for overtime or as
514+prior to the entry date for which credit is granted a member under this act;
515+(27) "prior service annual salary" means the highest annual salary, not
516+including any amounts received as payment for overtime or as
274517 reimbursement for travel or moving expense, received for personal
275-services by the member from the current employer in any one of the
276-three calendar years immediately preceding January 1, 1962, or the
277-entry date of the employer, whichever is later, except that if a member
278-entered the employment of the state during the calendar year 1961, the
279-prior service annual salary shall be computed by multiplying such
280-member's highest monthly salary received in that year by 12;
518+services by the member from the current employer in any one of the three
519+calendar years immediately preceding January 1, 1962, or the entry date of
520+the employer, whichever is later, except that if a member entered the
521+employment of the state during the calendar year 1961, the prior service
522+annual salary shall be computed by multiplying such member's highest
523+monthly salary received in that year by 12;
281524 (28) "retirant" means a member who has retired under this system;
282525 (29) "retirement benefit" means a monthly income or the actuarial
283526 equivalent thereof paid in such manner as specified by the member
284-pursuant to this act or as otherwise allowed to be paid at the discretion
285-of the board, with benefits accruing from the first day of the month
286-coinciding with or following retirement and ending on the last day of
287-the month in which death occurs. Upon proper identification a
288-surviving spouse may negotiate the warrant issued in the name of the
289-retirant. If there is no surviving spouse, the last warrant shall be
290-payable to the designated beneficiary;
527+pursuant to this act or as otherwise allowed to be paid at the discretion of
528+the board, with benefits accruing from the first day of the month
529+coinciding with or following retirement and ending on the last day of the
530+month in which death occurs. Upon proper identification a surviving
531+spouse may negotiate the warrant issued in the name of the retirant. If
532+there is no surviving spouse, the last warrant shall be payable to the
533+designated beneficiary;
291534 (30) "retirement system" or "system" means the Kansas public
292535 employees retirement system as established by this act and as it may be
293536 amended;
294537 (31) "social security" means the old age, survivors and disability
295538 insurance section of the federal social security act;
296539 (32) "trust" means an express trust, created by a trust instrument,
297540 including a will, designated by a member to receive payment of the
298-insured death benefit under K.S.A. 74-4927, and amendments thereto, SENATE BILL No. 64—page 6
299-and payment of the member's accumulated contributions under
300-subsection (1) of K.S.A. 74-4916(1), and amendments thereto. A
301-designation of a trust shall be filed with the board. If no will is admitted
302-to probate within six months after the death of the member or no trustee
303-qualifies within such six months or if the designated trust fails, for any
304-reason whatsoever, the insured death benefit under K.S.A. 74-4927, and
305-amendments thereto, and the member's accumulated contributions
306-under subsection (1) of K.S.A. 74-4916(1), and amendments thereto,
307-shall be paid in accordance with the provisions of subsection (7) of this
308-section as in other cases where there is no named beneficiary living at
309-the time of the member's death and any payments so made shall be a
310-full discharge and release to the system from any further claims;
541+insured death benefit under K.S.A. 74-4927, and amendments thereto, and
542+payment of the member's accumulated contributions under subsection (1)
543+of K.S.A. 74-4916(1), and amendments thereto. A designation of a trust
544+shall be filed with the board. If no will is admitted to probate within six
545+months after the death of the member or no trustee qualifies within such
546+six months or if the designated trust fails, for any reason whatsoever, the
547+insured death benefit under K.S.A. 74-4927, and amendments thereto, and
548+the member's accumulated contributions under subsection (1) of K.S.A.
549+74-4916(1), and amendments thereto, shall be paid in accordance with the
550+provisions of subsection (7) of this section as in other cases where there is
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594+no named beneficiary living at the time of the member's death and any
595+payments so made shall be a full discharge and release to the system from
596+any further claims;
311597 (33) "salary" means all salary and wages payable to a member for
312598 personal services performed for a participating employer, including
313-maintenance or any allowance in lieu thereof provided a member as
314-part of salary. Salary shall not include reimbursement for travel or
315-moving expenses, payment for accumulated sick leave or vacation or
316-annual leave, severance pay or any other payments to the member
317-determined by the board to not be payments for personal services
318-performed for a participating employer constituting salary or on and
319-after July 1, 1994, payment pursuant to an early retirement incentive
320-program made prior to the retirement of the member. When the salary
321-of a member who remains in substantially the same position during any
322-two consecutive years of participating service used in calculating final
323-average salary is increased by an amount which exceeds 15%, then the
324-amount of such increase which exceeds 15% shall not be included in
325-salary. Any contributions by such member on the amount of such
326-increase which exceeds 15% which is not included in compensation
327-shall be returned to the member. Unless otherwise provided by law,
328-salary shall include any amounts for tax sheltered annuities or deferred
329-compensation plans. Salary shall include amounts under sections 403b,
330-457 and 125 of the federal internal revenue code of 1986 and, as the
331-board deems appropriate, any other section of the federal internal
332-revenue code of 1986 which that defers or excludes amounts from
333-inclusion in income. For purposes of applying limits under the federal
334-internal revenue code "salary" shall have the meaning as provided in
335-K.S.A. 74-49,123, and amendments thereto. In any case, if participating
336-service is less than three years, then the average annual salary paid to
337-the member during the full period of participating service, or, in any
338-case, if the member has less than one calendar year of participating
599+maintenance or any allowance in lieu thereof provided a member as part of
600+salary. Salary shall not include reimbursement for travel or moving
601+expenses, payment for accumulated sick leave or vacation or annual leave,
602+severance pay or any other payments to the member determined by the
603+board to not be payments for personal services performed for a
604+participating employer constituting salary or on and after July 1, 1994,
605+payment pursuant to an early retirement incentive program made prior to
606+the retirement of the member. When the salary of a member who remains
607+in substantially the same position during any two consecutive years of
608+participating service used in calculating final average salary is increased
609+by an amount which exceeds 15%, then the amount of such increase which
610+exceeds 15% shall not be included in salary. Any contributions by such
611+member on the amount of such increase which exceeds 15% which is not
612+included in compensation shall be returned to the member. Unless
613+otherwise provided by law, salary shall include any amounts for tax
614+sheltered annuities or deferred compensation plans. Salary shall include
615+amounts under sections 403b, 457 and 125 of the federal internal revenue
616+code of 1986 and, as the board deems appropriate, any other section of the
617+federal internal revenue code of 1986 which that defers or excludes
618+amounts from inclusion in income. For purposes of applying limits under
619+the federal internal revenue code "salary" shall have the meaning as
620+provided in K.S.A. 74-49,123, and amendments thereto. In any case, if
621+participating service is less than three years, then the average annual salary
622+paid to the member during the full period of participating service, or, in
623+any case, if the member has less than one calendar year of participating
339624 service such member's final average salary shall be computed by
340-multiplying such member's highest monthly salary received in that year
341-by 12;
625+multiplying such member's highest monthly salary received in that year by
626+12;
342627 (34) "federal internal revenue code" means the federal internal
343628 revenue code of 1954 or 1986, as in effect on July 1, 2008, and as
344629 applicable to a governmental plan; and
345-(35) "USERRA" means the federal uniformed services
346-employment and reemployment rights act of 1994 as in effect on July 1,
347-2008.
630+(35) "USERRA" means the federal uniformed services employment
631+and reemployment rights act of 1994 as in effect on July 1, 2008.
348632 Sec. 2. K.S.A. 74-4904 is hereby amended to read as follows: 74-
349633 4904. (1) The system may sue and be sued in its official name, but its
350-trustees, officers, employees and agents shall not be personally liable
351-for acts of the system unless such person acted with willful, wanton or
352-fraudulent misconduct or intentionally tortious conduct. Any agreement
353-in settlement of litigation involving the system and the investment of
354-moneys of the fund is a public record as provided in K.S.A. 45-215 et
355-seq., and amendments thereto, and subject to the provisions of that act.
356-The service of all legal process and of all notices which may be
357-required to be in writing, whether legal proceedings or otherwise, shall SENATE BILL No. 64—page 7
358-be had on the executive director at such executive director's office. All
359-actions or proceedings directly or indirectly against the system shall be
360-brought in Shawnee county.
361-(2) Any person aggrieved by any order or decision of the board
362-made without a hearing, may, within 30 60 days after notice of the
363-order or decision of the board make written request to the board for a
364-hearing thereon. The board shall hear such party or parties in
365-accordance with the provisions of the Kansas administrative procedure
366-act at its next regular meeting or at a special meeting within 60 days
367-after receipt of such request. For the purpose of any hearing under this
368-section, the board may appoint the executive director or use a presiding
369-officer from the office of administrative hearings. The board shall
370-review an initial order resulting from a hearing under this section. The
371-board is hereby authorized to enter into a contract with the office of
372-administrative hearings and to provide for reimbursement for actual and
373-necessary expenses and compensation for such person serving as a
374-presiding officer.
634+trustees, officers, employees and agents shall not be personally liable for
635+acts of the system unless such person acted with willful, wanton or
636+fraudulent misconduct or intentionally tortious conduct. Any agreement in
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680+settlement of litigation involving the system and the investment of moneys
681+of the fund is a public record as provided in K.S.A. 45-215 et seq., and
682+amendments thereto, and subject to the provisions of that act. The service
683+of all legal process and of all notices which may be required to be in
684+writing, whether legal proceedings or otherwise, shall be had on the
685+executive director at such executive director's office. All actions or
686+proceedings directly or indirectly against the system shall be brought in
687+Shawnee county.
688+(2) Any person aggrieved by any order or decision of the board made
689+without a hearing, may, within 30 60 days after notice of the order or
690+decision of the board make written request to the board for a hearing
691+thereon. The board shall hear such party or parties in accordance with the
692+provisions of the Kansas administrative procedure act at its next regular
693+meeting or at a special meeting within 60 days after receipt of such
694+request. For the purpose of any hearing under this section, the board may
695+appoint the executive director or use a presiding officer from the office of
696+administrative hearings. The board shall review an initial order resulting
697+from a hearing under this section. The board is hereby authorized to enter
698+into a contract with the office of administrative hearings and to provide for
699+reimbursement for actual and necessary expenses and compensation for
700+such person serving as a presiding officer.
375701 Sec. 3. K.S.A. 2024 Supp. 74-49,123 is hereby amended to read as
376702 follows: 74-49,123. (a) This section applies to the Kansas public
377703 employees retirement system and to all other public retirement plans
378704 administered by the board of trustees.
379705 (b) As used in this section:
380706 (1) "Federal internal revenue code" means the federal internal
381707 revenue code of 1954 or 1986, as amended and as applicable to a
382708 governmental plan as in effect on July 1, 2008; and
383709 (2) "retirement plan" includes the Kansas public employees
384-retirement system and all other Kansas public retirement plans and
385-benefit structures, which are administered by the board.
710+retirement system and all other Kansas public retirement plans and benefit
711+structures, which are administered by the board.
386712 (c) In addition to the federal internal revenue code provisions
387713 otherwise noted in each retirement plan's law, and in order to satisfy the
388714 applicable requirements under the federal internal revenue code, the
389715 retirement plans shall be subject to the following provisions,
390716 notwithstanding any other provision of the retirement plan's law:
391-(1) The board shall distribute the corpus and income of the
392-retirement plan to the members and their beneficiaries in accordance
393-with the retirement plan's law. At no time prior to the satisfaction of all
394-liabilities with respect to members and their beneficiaries shall any part
395-of the corpus and income be used for, or diverted to, purposes other
396-than the exclusive benefit of the members and their beneficiaries.
717+(1) The board shall distribute the corpus and income of the retirement
718+plan to the members and their beneficiaries in accordance with the
719+retirement plan's law. At no time prior to the satisfaction of all liabilities
720+with respect to members and their beneficiaries shall any part of the corpus
721+and income be used for, or diverted to, purposes other than the exclusive
722+benefit of the members and their beneficiaries.
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397766 (2) Forfeitures arising from severance of employment, death or for
398-any other reason may not be applied to increase the benefits any
399-member would otherwise receive under the retirement plan's law.
400-However, forfeitures may be used to reduce an employer's contribution.
401-(3) All benefits paid from the retirement plan shall be distributed
402-in accordance with a good faith interpretation of the requirements of
403-section 401(a)(9) of the federal internal revenue code and the
404-regulations under that section. Notwithstanding any other provision of
405-these rules and regulations, effective on and after January 1, 2003, the
406-retirement plan is subject to the following provisions:
407-(A) Benefits must begin by the required beginning date, which is
408-the later of April 1 of the calendar year following the calendar year in
409-which the member reaches 72 years of age, or 70
767+any other reason may not be applied to increase the benefits any member
768+would otherwise receive under the retirement plan's law. However,
769+forfeitures may be used to reduce an employer's contribution.
770+(3) All benefits paid from the retirement plan shall be distributed in
771+accordance with a good faith interpretation of the requirements of section
772+401(a)(9) of the federal internal revenue code and the regulations under
773+that section. Notwithstanding any other provision of these rules and
774+regulations, effective on and after January 1, 2003, the retirement plan is
775+subject to the following provisions:
776+(A) Benefits must begin by the required beginning date, which is the
777+later of April 1 of the calendar year following the calendar year in which
778+the member reaches 72 years of age, or 70
410779 1
411-/2 years of age if the
412-member was born before July 1, 1949, the applicable age or April 1 of
413-the calendar year following the calendar year in which the member
414-terminates employment. If a member fails to apply for retirement
415-benefits by April 1 of the calendar year following the calendar year in
416-which such member reaches 72 years of age, or 70
780+/2 years of age if the member
781+was born before July 1, 1949, the applicable age or April 1 of the calendar
782+year following the calendar year in which the member terminates
783+employment. If a member fails to apply for retirement benefits by April 1
784+of the calendar year following the calendar year in which such member
785+reaches 72 years of age, or 70
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418-/2 years of age if the
419-member was born before July 1, 1949, the applicable age or April 1 of
420-the calendar year following the calendar year in which such member SENATE BILL No. 64—page 8
421-terminates employment, whichever is later, the board will begin
422-distributing the benefit as required by this section. For purposes of this
423-section, the applicable age is 70
787+/2 years of age if the member was born
788+before July 1, 1949, the applicable age or April 1 of the calendar year
789+following the calendar year in which such member terminates
790+employment, whichever is later, the board will begin distributing the
791+benefit as required by this section. For purposes of this section, the
792+applicable age is 70
424793 1
425-/2 if the member was born before July
426-1, 1949, age 72 if the member was born on or after July 1, 1949, but
427-before January 1, 1951, age 73 if the member was born on or after
428-January 1, 1951, but before January 1, 1959, and age 75 if the member
429-was born on or after January 1, 1960.
794+/2 if the member was born before July 1, 1949, age 72
795+if the member was born on or after July 1, 1949, but before January 1,
796+1951, age 73 if the member was born on or after January 1, 1951, but
797+before January 1, 1959, and age 75 if the member was born on or after
798+January 1, 1960.
430799 (B) The member's entire interest must be distributed over the
431-member's life or the lives of the member and a designated beneficiary,
432-or over a period not extending beyond the life expectancy of the
433-member or of the member and a designated beneficiary. Death benefits
434-must be distributed in accordance with section 401(a)(9) of the federal
435-internal revenue code, including the incidental death benefit
436-requirement in section 401(a)(9)(G) of the federal internal revenue
437-code, and the regulations implementing that section.
438-(C) Except as allowed under section 401(a)(9) of the federal
439-internal revenue code and applicable regulations thereunder, the life
440-expectancy of a member, the member's spouse or the member's
441-beneficiary may not be recalculated after the initial determination for
442-purposes of determining benefits.
800+member's life or the lives of the member and a designated beneficiary, or
801+over a period not extending beyond the life expectancy of the member or
802+of the member and a designated beneficiary. Death benefits must be
803+distributed in accordance with section 401(a)(9) of the federal internal
804+revenue code, including the incidental death benefit requirement in section
805+401(a)(9)(G) of the federal internal revenue code, and the regulations
806+implementing that section.
807+(C) Except as allowed under section 401(a)(9) of the federal internal
808+revenue code and applicable regulations thereunder, the life expectancy of
809+a member, the member's spouse or the member's beneficiary may not be
810+recalculated after the initial determination for purposes of determining
811+benefits.
443812 (D) If a member dies after the required distribution of benefits has
444-begun, the remaining portion of the member's interest must be
445-distributed at least as rapidly as under the method of distribution before
446-the member's death and no longer than the remaining period over which
447-distributions commenced.
813+begun, the remaining portion of the member's interest must be distributed
814+at least as rapidly as under the method of distribution before the member's
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858+death and no longer than the remaining period over which distributions
859+commenced.
448860 (E) If a member dies before required distribution of the member's
449861 benefits has begun, the member's entire interest must be either:
450-(i) In accordance with federal regulations, distributed over the life
451-or life expectancy of the designated beneficiary, with the distributions
862+(i) In accordance with federal regulations, distributed over the life or
863+life expectancy of the designated beneficiary, with the distributions
452864 beginning no later than December 31 of the calendar year immediately
453865 following the calendar year of the member's death; or
454866 (ii) distributed by December 31 of the calendar year containing the
455867 fifth anniversary of the member's death.
456-(F) The amount of an annuity paid to a member's beneficiary may
457-not exceed the maximum determined under the incidental death benefit
868+(F) The amount of an annuity paid to a member's beneficiary may not
869+exceed the maximum determined under the incidental death benefit
458870 requirement of the federal internal revenue code.
459-(G) The death and disability benefits provided by a retirement
460-plan are limited by the incidental benefit rule set forth in section 401(a)
461-(9)(G) of the federal internal revenue code and applicable treasury
462-regulation 1.401-1(b)(l)(i) regulations.
871+(G) The death and disability benefits provided by a retirement plan
872+are limited by the incidental benefit rule set forth in section 401(a)(9)(G)
873+of the federal internal revenue code and applicable treasury regulation
874+1.401-1(b)(l)(i) regulations.
463875 (H) Distributions from a defined contribution or deferred
464876 compensation plan shall be made in accordance with the rules under
465-section 401(a)(9) of the federal internal revenue code that are specific
466-to such plans.
467-(4) Distributions from the retirement plans may be made only
468-upon retirement, separation from service, disability or death.
877+section 401(a)(9) of the federal internal revenue code that are specific to
878+such plans.
879+(4) Distributions from the retirement plans may be made only upon
880+retirement, separation from service, disability or death.
469881 (5) The board or its designee may not:
470882 (A) Determine eligibility for benefits;
471883 (B) compute rates of contribution; or
472-(C) compute benefits of members or beneficiaries, in a manner
473-that discriminates in favor of members who are considered officers,
474-supervisors or highly compensated, as prohibited under section 401(a)
475-(4) of the federal internal revenue code.
884+(C) compute benefits of members or beneficiaries, in a manner that
885+discriminates in favor of members who are considered officers, supervisors
886+or highly compensated, as prohibited under section 401(a)(4) of the federal
887+internal revenue code.
476888 (6) Subject to the provisions of this subsection, benefits paid from,
477-and employee contributions made to, the retirement plans shall not
478-exceed the maximum benefits and the maximum annual additions,
479-respectively, permissible under section 415 of the federal internal
480-revenue code.
481-(A) Before January 1, 1995, a member may not receive an annual SENATE BILL No. 64—page 9
889+and employee contributions made to, the retirement plans shall not exceed
890+the maximum benefits and the maximum annual additions, respectively,
891+permissible under section 415 of the federal internal revenue code.
892+(A) Before January 1, 1995, a member may not receive an annual
482893 benefit that exceeds the limits specified in section 415(b) of the federal
483-internal revenue code, subject to the applicable adjustments in that
484-section. Beginning January 1, 1995, a participant may not receive an
485-annual benefit that exceeds the dollar amount specified in section
486-415(b)(1)(A) of the federal internal revenue code, subject to the
487-applicable adjustments in section 415 of the federal internal revenue
488-code.
489-(B) Notwithstanding any other provision of law to the contrary,
490-the board may modify a request by a participant to make a contribution
491-to the retirement plans if the amount of the contribution would exceed
492-the limits under section 415(c) or 415(n) of the federal internal revenue
493-code subject to the following:
494-(i) Where the retirement plan's law requires a lump-sum payment,
495-for the purchase of service credit, the board may establish a periodic
496-payment plan in order to avoid a contribution in excess of the limits
497-under section 415(c) or 415(n) of the federal internal revenue code.
498-(ii) If the board's option under clause (i) will not avoid a
499-contribution in excess of the limits under section 415(c) or 415(n) of
500-the federal internal revenue code, the board shall reduce or deny the
501-contribution.
894+internal revenue code, subject to the applicable adjustments in that section.
895+Beginning January 1, 1995, a participant may not receive an annual benefit
896+that exceeds the dollar amount specified in section 415(b)(1)(A) of the
897+federal internal revenue code, subject to the applicable adjustments in
898+section 415 of the federal internal revenue code.
899+(B) Notwithstanding any other provision of law to the contrary, the
900+board may modify a request by a participant to make a contribution to the
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944+retirement plans if the amount of the contribution would exceed the limits
945+under section 415(c) or 415(n) of the federal internal revenue code subject
946+to the following:
947+(i) Where the retirement plan's law requires a lump-sum payment, for
948+the purchase of service credit, the board may establish a periodic payment
949+plan in order to avoid a contribution in excess of the limits under section
950+415(c) or 415(n) of the federal internal revenue code.
951+(ii) If the board's option under clause (i) will not avoid a contribution
952+in excess of the limits under section 415(c) or 415(n) of the federal internal
953+revenue code, the board shall reduce or deny the contribution.
502954 (C) Effective for permissive service credit contributions made in
503-limitation years beginning after December 31, 1997, if an active
504-member makes one or more contributions to purchase permissive
505-service credit under a retirement plan, then the requirements of this
506-section shall be treated as met only if:
507-(i) The requirements of section 415(b) of the federal internal
508-revenue code are met, determined by treating the accrued benefit
509-derived from all such contributions as an annual benefit for purposes of
510-such section; or
511-(ii) the requirements of section 415(c) of the federal internal
512-revenue code are met, determined by treating all such contributions as
513-annual additions for purposes of such section. For purposes of applying
514-clause (i) a retirement plan shall not fail to meet the reduced limit under
515-section 415(b)(2)(C) of the federal internal revenue code solely by
516-reason of this subparagraph (C), and for purposes of applying clause
517-(ii), a retirement plan shall not fail to meet the percentage limitation
518-under section 415(c)(1)(B) of the federal internal revenue code solely
519-by reason of this paragraph.
520-(iii) For purposes of this clause, the term "permissive service
521-credit" means service credit:
522-(a) Specifically recognized by a retirement plan's law for purposes
523-of calculating a member's benefit under that retirement plan;
524-(b) that such member has not received under a retirement plan;
525-and
526-(c) that such member may receive under a retirement plan's law
527-only by making a voluntary additional contribution, in an amount
528-determined under the retirement plan's law and procedures established
529-by the board, that does not exceed the amount necessary to fund the
530-benefit attributable to such service credit.
955+limitation years beginning after December 31, 1997, if an active member
956+makes one or more contributions to purchase permissive service credit
957+under a retirement plan, then the requirements of this section shall be
958+treated as met only if:
959+(i) The requirements of section 415(b) of the federal internal revenue
960+code are met, determined by treating the accrued benefit derived from all
961+such contributions as an annual benefit for purposes of such section; or
962+(ii) the requirements of section 415(c) of the federal internal revenue
963+code are met, determined by treating all such contributions as annual
964+additions for purposes of such section. For purposes of applying clause (i)
965+a retirement plan shall not fail to meet the reduced limit under section
966+415(b)(2)(C) of the federal internal revenue code solely by reason of this
967+subparagraph (C), and for purposes of applying clause (ii), a retirement
968+plan shall not fail to meet the percentage limitation under section 415(c)(1)
969+(B) of the federal internal revenue code solely by reason of this paragraph.
970+(iii) For purposes of this clause, the term "permissive service credit"
971+means service credit:
972+(a) Specifically recognized by a retirement plan's law for purposes of
973+calculating a member's benefit under that retirement plan;
974+(b) that such member has not received under a retirement plan; and
975+(c) that such member may receive under a retirement plan's law only
976+by making a voluntary additional contribution, in an amount determined
977+under the retirement plan's law and procedures established by the board,
978+that does not exceed the amount necessary to fund the benefit attributable
979+to such service credit.
531980 (iv) A retirement plan shall fail to meet the requirements of this
532-clause if the retirement plan's law specifically provides for a purchase
533-of nonqualified service purchase, and if:
534-(a) More than five years of nonqualified service credit are taken
535-into account for purposes of this subclause; or
981+clause if the retirement plan's law specifically provides for a purchase of
982+nonqualified service purchase, and if:
983+(a) More than five years of nonqualified service credit are taken into
984+account for purposes of this subclause; or
536985 (b) any nonqualified service credit is taken into account under this
537-subclause before the member has at least five years of participation
538-under a retirement plan. For purposes of this subclause, effective for
539-permissive service credit contributions made in limitation years
540-beginning after December 31, 1997, the term "nonqualified service SENATE BILL No. 64—page 10
541-credit" means the same as provided in section 415(n)(3)(C) of the
542-federal internal revenue code.
986+subclause before the member has at least five years of participation under
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1030+a retirement plan. For purposes of this subclause, effective for permissive
1031+service credit contributions made in limitation years beginning after
1032+December 31, 1997, the term "nonqualified service credit" means the same
1033+as provided in section 415(n)(3)(C) of the federal internal revenue code.
5431034 (v) In the case of a trustee-to-trustee transfer after December 31,
5441035 2001, to which section 403(b)(13)(A) or 457(e)(17)(A) of the federal
5451036 internal revenue code applies, without regard to whether the transfer is
5461037 made between plans maintained by the same employer:
5471038 (a) The limitations of clause (iv) shall not apply in determining
548-whether the transfer is for the purchase of permissive service credit;
549-and
550-(b) the distribution rules applicable under federal law to a
551-retirement plan shall apply to such amounts and any benefits
552-attributable to such amounts.
553-(vi) For an eligible member, the limitation of section 415(c)(1) of
554-the federal internal revenue code shall not be applied to reduce the
555-amount of permissive service credit which may be purchased to an
556-amount less than the amount which was allowed to be purchased under
557-the terms of the statute as in effect on August 5, 1997. For purposes of
558-this clause, an eligible member is an individual who first became a
559-member in the retirement plan before January 1, 1998.
1039+whether the transfer is for the purchase of permissive service credit; and
1040+(b) the distribution rules applicable under federal law to a retirement
1041+plan shall apply to such amounts and any benefits attributable to such
1042+amounts.
1043+(vi) For an eligible member, the limitation of section 415(c)(1) of the
1044+federal internal revenue code shall not be applied to reduce the amount of
1045+permissive service credit which may be purchased to an amount less than
1046+the amount which was allowed to be purchased under the terms of the
1047+statute as in effect on August 5, 1997. For purposes of this clause, an
1048+eligible member is an individual who first became a member in the
1049+retirement plan before January 1, 1998.
5601050 (D) Subject to approval by the internal revenue service, the board
561-shall maintain a qualified governmental excess benefit arrangement
562-under section 415(m) of the federal internal revenue code. The board
563-shall establish the necessary and appropriate procedures for the
564-administration of such benefit arrangement under the federal internal
565-revenue code. The amount of any annual benefit that would exceed the
566-limitations imposed by section 415 of the federal internal revenue code
567-shall be paid from this benefit arrangement. The amount of any
568-contribution that would exceed the limitations imposed by section 415
569-of the federal internal revenue code shall be credited to this benefit
570-arrangement. The qualified excess benefit arrangement shall be a
571-separate portion of the retirement plan. The qualified excess benefit
572-arrangement is subject to the following requirements:
573-(i) The benefit arrangement shall be maintained solely for the
574-purpose of providing to participants in the retirement plans that part of
575-the participant's annual benefit otherwise payable under the terms of the
576-act that exceeds the limitations on benefits imposed by section 415 of
577-the federal internal revenue code; and
578-(ii) participants do not have an election, directly or indirectly, to
579-defer compensation to the excess benefit arrangement.
1051+shall maintain a qualified governmental excess benefit arrangement under
1052+section 415(m) of the federal internal revenue code. The board shall
1053+establish the necessary and appropriate procedures for the administration
1054+of such benefit arrangement under the federal internal revenue code. The
1055+amount of any annual benefit that would exceed the limitations imposed
1056+by section 415 of the federal internal revenue code shall be paid from this
1057+benefit arrangement. The amount of any contribution that would exceed
1058+the limitations imposed by section 415 of the federal internal revenue code
1059+shall be credited to this benefit arrangement. The qualified excess benefit
1060+arrangement shall be a separate portion of the retirement plan. The
1061+qualified excess benefit arrangement is subject to the following
1062+requirements:
1063+(i) The benefit arrangement shall be maintained solely for the purpose
1064+of providing to participants in the retirement plans that part of the
1065+participant's annual benefit otherwise payable under the terms of the act
1066+that exceeds the limitations on benefits imposed by section 415 of the
1067+federal internal revenue code; and
1068+(ii) participants do not have an election, directly or indirectly, to defer
1069+compensation to the excess benefit arrangement.
5801070 (E) For purposes of applying these limits only and for no other
5811071 purpose, the definition of compensation where applicable shall be
5821072 compensation actually paid or made available during a limitation year,
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5831116 except as noted below and as permitted by treasury regulation section
5841117 1.415(c)-2. Specifically, compensation shall be defined as wages within
585-the meaning of section 3401(a) of the federal internal revenue code and
586-all other payments of compensation to an employee by an employer for
587-which the employer is required to furnish the employee a written
588-statement under sections 6041(d), 6051(a)(3) and 6052 of the federal
589-internal revenue code. Compensation shall be determined without
590-regard to any rules under section 3401(a) of the federal internal revenue
591-code that limit the remuneration included in wages based on the nature
592-or location of the employment or the services performed, such as the
593-exception for agricultural labor in section 3401(a)(2) of the federal
1118+the meaning of section 3401(a) of the federal internal revenue code and all
1119+other payments of compensation to an employee by an employer for which
1120+the employer is required to furnish the employee a written statement under
1121+sections 6041(d), 6051(a)(3) and 6052 of the federal internal revenue code.
1122+Compensation shall be determined without regard to any rules under
1123+section 3401(a) of the federal internal revenue code that limit the
1124+remuneration included in wages based on the nature or location of the
1125+employment or the services performed, such as the exception for
1126+agricultural labor in section 3401(a)(2) of the federal internal revenue
1127+code.
1128+(i) However, for limitation years beginning after December 31, 1997,
1129+compensation shall also include amounts that would otherwise be included
1130+in compensation but for an election under sections 125(a), 402(e)(3),
1131+402(h)(1)(B), 402(k) or 457(b) of the federal internal revenue code. For
1132+limitation years beginning after December 30, 2000, compensation shall
1133+also include any elective amounts that are not includable in the gross
1134+income of the employee by reason of section 132(f)(4) of the federal
5941135 internal revenue code.
595-(i) However, for limitation years beginning after December 31,
596-1997, compensation shall also include amounts that would otherwise be
597-included in compensation but for an election under sections 125(a),
598-402(e)(3), 402(h)(1)(B), 402(k) or 457(b) of the federal internal
599-revenue code. For limitation years beginning after December 30, 2000, SENATE BILL No. 64—page 11
600-compensation shall also include any elective amounts that are not
601-includable in the gross income of the employee by reason of section
602-132(f)(4) of the federal internal revenue code.
6031136 (ii) The definition of compensation shall exclude employee
6041137 contributions picked up under section 414(h)(2) of the federal internal
6051138 revenue code.
6061139 (iii) For limitation years beginning on and after January 1, 2007,
607-compensation for the limitation year will also include compensation
608-paid by the later of two and a half months after an employee's
609-severance from employment or the end of the limitation year that
610-includes the date of the employee's severance from employment if:
1140+compensation for the limitation year will also include compensation paid
1141+by the later of two and a half months after an employee's severance from
1142+employment or the end of the limitation year that includes the date of the
1143+employee's severance from employment if:
6111144 (a) The payment is regular compensation for services during the
612-employee's regular working hours or compensation for services outside
613-the employee's regular working hours, such as overtime or shift
614-differential, commissions, bonuses or other similar payments, and
615-absent a severance from employment, the payments would have been
616-paid to the employee while the employee continues in employment
617-with the employer;
1145+employee's regular working hours or compensation for services outside the
1146+employee's regular working hours, such as overtime or shift differential,
1147+commissions, bonuses or other similar payments, and absent a severance
1148+from employment, the payments would have been paid to the employee
1149+while the employee continues in employment with the employer;
6181150 (b) the payment is for unused accrued bona fide sick, vacation or
619-other leave that the employee would have been able to use if
620-employment had continued; or
1151+other leave that the employee would have been able to use if employment
1152+had continued; or
6211153 (c) for limitation years beginning on and after January 1, 2012, the
6221154 payment is made pursuant to a nonqualified unfunded deferred
623-compensation plan, but only if the payment would have been paid to
624-the member at the same time if the member had continued employment
625-with the employer and only to the extent that the payment is includable
626-in the member's gross income.
1155+compensation plan, but only if the payment would have been paid to the
1156+member at the same time if the member had continued employment with
1157+the employer and only to the extent that the payment is includable in the
1158+member's gross income.
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6271202 (iv) Any payments not described in clause (iii) are not considered
6281203 compensation if paid after severance from employment, even if they are
629-paid within two and a half months following severance from
630-employment, except for payments to the individual who does not
631-currently perform services for the employer by reason of qualified
632-military service, within the meaning of section 414(u)(1) of the federal
633-internal revenue code, to the extent these payments do not exceed the
634-amounts the individual would have received if the individual had
635-continued to perform services for the employer rather than entering
1204+paid within two and a half months following severance from employment,
1205+except for payments to the individual who does not currently perform
1206+services for the employer by reason of qualified military service, within
1207+the meaning of section 414(u)(1) of the federal internal revenue code, to
1208+the extent these payments do not exceed the amounts the individual would
1209+have received if the individual had continued to perform services for the
1210+employer rather than entering qualified military service.
1211+(v) An employee who is in qualified military service, within the
1212+meaning of section 414(u)(1) of the federal internal revenue code, shall be
1213+treated as receiving compensation from the employer during such period
1214+of qualified military service equal to: (a) The compensation the employee
1215+would have received during such period if the employee were not in
1216+qualified military service, determined based on the rate of pay the
1217+employee would have received from the employer but for the absence
1218+during the period of qualified military service; or (b) if the compensation
1219+the employee would have received during such period was not reasonably
1220+certain, the employee's average compensation from the employer during
1221+the 12-month period immediately preceding the qualified military service,
1222+or if shorter, the period of employment immediately preceding the
6361223 qualified military service.
637-(v) An employee who is in qualified military service, within the
638-meaning of section 414(u)(1) of the federal internal revenue code, shall
639-be treated as receiving compensation from the employer during such
640-period of qualified military service equal to: (a) The compensation the
641-employee would have received during such period if the employee
642-were not in qualified military service, determined based on the rate of
643-pay the employee would have received from the employer but for the
644-absence during the period of qualified military service; or (b) if the
645-compensation the employee would have received during such period
646-was not reasonably certain, the employee's average compensation from
647-the employer during the 12-month period immediately preceding the
648-qualified military service, or if shorter, the period of employment
649-immediately preceding the qualified military service.
6501224 (vi) Back pay, within the meaning of treasury regulation section
651-1.415(c)-2(g)(8), shall be treated as compensation for the limitation
652-year to which the back pay relates to the extent the back pay represents
653-wages and compensation that would otherwise be included under this
654-definition.
655-(7) On and after January 1, 2009, for purposes of applying the
656-limits under section 415(b) of the federal internal revenue code, the
657-following shall apply:
658-(A) A member's applicable limit shall be applied to the member's SENATE BILL No. 64—page 12
659-annual benefit in the first limitation year without regard to any
660-automatic cost-of-living increases;
661-(B) to the extent the member's annual benefit equals or exceeds
662-such limit, the member shall no longer be eligible for cost-of-living
663-increases until such time as the benefit plus the accumulated increases
664-are less than such limit;
665-(C) thereafter, in any subsequent limitation year, the member's
666-annual benefit including any automatic cost-of-living increase
667-applicable shall be tested under the then applicable benefit limit
668-including any adjustment to the dollar limit under section 415(b)(1)(A)
669-or 415(d) of the federal internal revenue code and the regulations
670-thereunder; and
1225+1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to
1226+which the back pay relates to the extent the back pay represents wages and
1227+compensation that would otherwise be included under this definition.
1228+(7) On and after January 1, 2009, for purposes of applying the limits
1229+under section 415(b) of the federal internal revenue code, the following
1230+shall apply:
1231+(A) A member's applicable limit shall be applied to the member's
1232+annual benefit in the first limitation year without regard to any automatic
1233+cost-of-living increases;
1234+(B) to the extent the member's annual benefit equals or exceeds such
1235+limit, the member shall no longer be eligible for cost-of-living increases
1236+until such time as the benefit plus the accumulated increases are less than
1237+such limit;
1238+(C) thereafter, in any subsequent limitation year, the member's annual
1239+benefit including any automatic cost-of-living increase applicable shall be
1240+tested under the then applicable benefit limit including any adjustment to
1241+the dollar limit under section 415(b)(1)(A) or 415(d) of the federal internal
1242+revenue code and the regulations thereunder; and
6711243 (D) in no event shall a member's annual benefit payable from a
672-retirement plan in any limitation year be greater than the limit
673-applicable at the annuity starting date, as increased in subsequent years
674-pursuant to section 415(d) of the federal internal revenue code and the
675-regulations thereunder. If the form of benefit without regard to the
676-automatic benefit increase feature is not a straight life annuity, then the
677-preceding sentence is applied by reducing the limit under section
678-415(b) of the federal internal revenue code applicable at the annuity
679-starting date to an actuarially equivalent amount determined using the
680-assumptions specified in treasury regulation section 1.415(b)-1(c)(2)(ii)
681-that take into account the death benefits under the form of benefit. This
682-subsection applies to distributions made on and after January 1, 1993. A
683-distributee may elect to have any portion of an eligible rollover
684-distribution paid directly to an eligible retirement plan specified by the
685-distributee in a transfer made from the retirement system.
1244+retirement plan in any limitation year be greater than the limit applicable at
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1288+the annuity starting date, as increased in subsequent years pursuant to
1289+section 415(d) of the federal internal revenue code and the regulations
1290+thereunder. If the form of benefit without regard to the automatic benefit
1291+increase feature is not a straight life annuity, then the preceding sentence is
1292+applied by reducing the limit under section 415(b) of the federal internal
1293+revenue code applicable at the annuity starting date to an actuarially
1294+equivalent amount determined using the assumptions specified in treasury
1295+regulation section 1.415(b)-1(c)(2)(ii) that take into account the death
1296+benefits under the form of benefit. This subsection applies to distributions
1297+made on and after January 1, 1993. A distributee may elect to have any
1298+portion of an eligible rollover distribution paid directly to an eligible
1299+retirement plan specified by the distributee in a transfer made from the
1300+retirement system.
6861301 (i) An eligible rollover distribution is any distribution of all or any
6871302 portion of the balance to the credit of the distributee, except that an
688-eligible rollover distribution does not include: (a) Any distribution that
689-is one of a series of substantially equal periodic payments, not less
690-frequently than annually, made for the life or the life expectancy of the
691-distributee or the joint lives or joint life expectancies of the distributee
692-and the distributee's designated beneficiary or for a specified period of
693-10 years or more; (b) any distribution to the extent such distribution is
694-required under section 401(a)(9) of the federal internal revenue code;
695-(c) the portion of any distribution that is not includable in gross
696-income; and (d) any other distribution that is reasonably expected to
697-total less than $200 during the year. Effective January 1, 2002, a
698-portion of a distribution shall not fail to be an eligible rollover
699-distribution merely because the portion consists of after-tax employee
700-contributions that are not includable in gross income. However, such
701-portion may be transferred only to an individual retirement account or
702-annuity described in section 408(a) or (b) of the federal internal
1303+eligible rollover distribution does not include: (a) Any distribution that is
1304+one of a series of substantially equal periodic payments, not less frequently
1305+than annually, made for the life or the life expectancy of the distributee or
1306+the joint lives or joint life expectancies of the distributee and the
1307+distributee's designated beneficiary or for a specified period of 10 years or
1308+more; (b) any distribution to the extent such distribution is required under
1309+section 401(a)(9) of the federal internal revenue code; (c) the portion of
1310+any distribution that is not includable in gross income; and (d) any other
1311+distribution that is reasonably expected to total less than $200 during the
1312+year. Effective January 1, 2002, a portion of a distribution shall not fail to
1313+be an eligible rollover distribution merely because the portion consists of
1314+after-tax employee contributions that are not includable in gross income.
1315+However, such portion may be transferred only to an individual retirement
1316+account or annuity described in section 408(a) or (b) of the federal internal
7031317 revenue code, or to a qualified defined contribution plan described in
7041318 section 401(a) of the federal internal revenue code or to a qualified plan
705-described in section 403(a) of the federal internal revenue code, that
706-agrees to separately account for amounts so transferred and earnings on
707-such amounts, including separately accounting for the portion of the
708-distribution that is includable in gross income and the portion of the
709-distribution that is not so includable, or on or after January 1, 2007, to a
710-qualified defined benefit plan described in section 401(a) of the federal
711-internal revenue code or to an annuity contract described in section
712-403(b) of the federal internal revenue code, that agrees to separately
713-account for amounts so transferred and earnings thereon, including
714-separately accounting for the portion of the distribution that is
715-includable in gross income and the portion of the distribution that is not
716-so includable.
717-(ii) An eligible retirement plan is any of the following that accepts SENATE BILL No. 64—page 13
718-the distributee's eligible rollover distribution:
1319+described in section 403(a) of the federal internal revenue code, that agrees
1320+to separately account for amounts so transferred and earnings on such
1321+amounts, including separately accounting for the portion of the distribution
1322+that is includable in gross income and the portion of the distribution that is
1323+not so includable, or on or after January 1, 2007, to a qualified defined
1324+benefit plan described in section 401(a) of the federal internal revenue
1325+code or to an annuity contract described in section 403(b) of the federal
1326+internal revenue code, that agrees to separately account for amounts so
1327+transferred and earnings thereon, including separately accounting for the
1328+portion of the distribution that is includable in gross income and the
1329+portion of the distribution that is not so includable.
1330+(ii) An eligible retirement plan is any of the following that accepts the
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1374+distributee's eligible rollover distribution:
7191375 (a) An individual retirement account described in section 408(a) of
7201376 the federal internal revenue code;
721-(b) an individual retirement annuity described in section 408(b) of
722-the federal internal revenue code;
723-(c) an annuity plan described in section 403(a) of the federal
724-internal revenue code;
725-(d) a qualified trust described in section 401(a) of the federal
726-internal revenue code;
727-(e) effective January 1, 2002, an annuity contract described in
728-section 403(b) of the federal internal revenue code;
729-(f) effective January 1, 2002, a plan eligible under section 457(b)
730-of the federal internal revenue code that is maintained by a state,
731-political subdivision of a state or any agency or instrumentality of a
732-state or a political subdivision of a state that agrees to separately
733-account for amounts transferred into the plan from a retirement plan; or
734-(g) effective January 1, 2008, a roth IRA described in section
735-408(A) of the federal internal revenue code; or
736-(h) effective January 1, 2016, a SIMPLE IRA, as described in
737-section 408(p) of the federal internal revenue code, provided that the
738-rollover contribution is made after the two-year period described in
739-section 72(t)(6) of the federal internal revenue code.
1377+(b) an individual retirement annuity described in section 408(b) of the
1378+federal internal revenue code;
1379+(c) an annuity plan described in section 403(a) of the federal internal
1380+revenue code;
1381+(d) a qualified trust described in section 401(a) of the federal internal
1382+revenue code;
1383+(e) effective January 1, 2002, an annuity contract described in section
1384+403(b) of the federal internal revenue code;
1385+(f) effective January 1, 2002, a plan eligible under section 457(b) of
1386+the federal internal revenue code that is maintained by a state, political
1387+subdivision of a state or any agency or instrumentality of a state or a
1388+political subdivision of a state that agrees to separately account for
1389+amounts transferred into the plan from a retirement plan; or
1390+(g) effective January 1, 2008, a roth IRA described in section 408(A)
1391+of the federal internal revenue code; or
1392+(h) effective January 1, 2016, a SIMPLE IRA, as described in section
1393+408(p) of the federal internal revenue code, provided that the rollover
1394+contribution is made after the two-year period described in section 72(t)
1395+(6) of the federal internal revenue code.
7401396 (iii) Effective January 1, 2002, the definition of eligible rollover
7411397 distribution also includes a distribution to a surviving spouse, or to a
7421398 spouse or former spouse who is an alternate payee under a domestic
743-relations order, as defined in section 414(p) of the federal internal
744-revenue code.
745-(iv) A distributee includes an employee or former employee. It
746-also includes the employee's or former employee's surviving spouse
747-and the employee's or former employee's spouse or former spouse who
748-is the alternate payee under a qualified domestic relations order, as
749-defined in section 414(p) of the federal internal revenue code. Effective
750-July 1, 2007, a distributee further includes a nonspouse beneficiary who
751-is a designated beneficiary as defined by section 401(a)(9)(E) of the
752-federal internal revenue code. However, a nonspouse beneficiary may
753-rollover the distribution only to an individual retirement account or
754-individual retirement annuity established for the purpose of receiving
755-the distribution and the account or annuity will be treated as an
756-"inherited" individual retirement account or annuity.
1399+relations order, as defined in section 414(p) of the federal internal revenue
1400+code.
1401+(iv) A distributee includes an employee or former employee. It also
1402+includes the employee's or former employee's surviving spouse and the
1403+employee's or former employee's spouse or former spouse who is the
1404+alternate payee under a qualified domestic relations order, as defined in
1405+section 414(p) of the federal internal revenue code. Effective July 1, 2007,
1406+a distributee further includes a nonspouse beneficiary who is a designated
1407+beneficiary as defined by section 401(a)(9)(E) of the federal internal
1408+revenue code. However, a nonspouse beneficiary may rollover the
1409+distribution only to an individual retirement account or individual
1410+retirement annuity established for the purpose of receiving the distribution
1411+and the account or annuity will be treated as an "inherited" individual
1412+retirement account or annuity.
7571413 (v) A direct rollover is a payment by the retirement system to the
7581414 eligible retirement plan specified by the distributee.
759-(8) Notwithstanding any law to the contrary, the board may accept
760-a direct or indirect eligible rollover distributions for the purpose of the
1415+(8) Notwithstanding any law to the contrary, the board may accept a
1416+direct or indirect eligible rollover distributions for the purpose of the
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7611460 purchase of service credit. In addition, the board may accept a direct
762-trustee to trustee transfer from a deferred compensation plan under
763-section 457(b) of the federal internal revenue code or a tax sheltered
764-annuity under section 403(b) of the federal internal revenue code for:
765-(A) The purchase of permissive service credit, as defined under section
766-415(n)(3)(A) of the federal internal revenue code; or (B) a repayment to
767-which section 415 of the federal internal revenue code does not apply
768-pursuant to section 415(k)(3) of the federal internal revenue code. Any
769-such transfer shall be allowed as provided in this subsection to the
770-extent permitted by law, subject to any conditions, proofs or acceptance
771-established or required by the board or the board's designee.
1461+trustee to trustee transfer from a deferred compensation plan under section
1462+457(b) of the federal internal revenue code or a tax sheltered annuity under
1463+section 403(b) of the federal internal revenue code for: (A) The purchase
1464+of permissive service credit, as defined under section 415(n)(3)(A) of the
1465+federal internal revenue code; or (B) a repayment to which section 415 of
1466+the federal internal revenue code does not apply pursuant to section 415(k)
1467+(3) of the federal internal revenue code. Any such transfer shall be allowed
1468+as provided in this subsection to the extent permitted by law, subject to any
1469+conditions, proofs or acceptance established or required by the board or
1470+the board's designee.
7721471 (9) Where required by the act, an employer shall pick up and pay
773-contributions that would otherwise be payable by members of a
774-retirement plan in accordance with section 414(h)(2) of the federal
775-internal revenue code as follows:
776-(A) The contributions, although designated as employee SENATE BILL No. 64—page 14
777-contributions, are being paid by the employer in lieu of contributions
778-by the employee;
1472+contributions that would otherwise be payable by members of a retirement
1473+plan in accordance with section 414(h)(2) of the federal internal revenue
1474+code as follows:
1475+(A) The contributions, although designated as employee
1476+contributions, are being paid by the employer in lieu of contributions by
1477+the employee;
7791478 (B) the employee must not have been given the option of receiving
7801479 the amounts directly instead of having them paid to the retirement plan;
7811480 and
7821481 (C) the pickup shall apply to amounts that a member elects to
783-contribute to receive credit for prior or participating service if the
784-election is irrevocable and applies to amounts contributed before
785-retirement.
786-(10) (A) Notwithstanding any provision of this plan to the
787-contrary, contributions, benefits and service credit with respect to
788-qualified military service will be provided in accordance with section
789-414(u) of the federal internal revenue code and the uniformed services
790-employment and reemployment rights act of 1994.
791-(B) Effective with respect to deaths occurring on or after January
792-1, 2007, while a member is performing qualified military service, as
793-defined in chapter 43 of title 38, United States code, to the extent
794-required by section 401(a)(37) of the federal internal revenue code,
795-survivors of a member in the system, are entitled to any additional
796-benefits that the system would provide if the member had resumed
797-employment and then died, such as accelerated vesting or survivor
798-benefits that are contingent on the member's death while employed. A
799-deceased member's period of qualified military service must be counted
800-for vesting purposes.
801-(C) Effective with respect to deaths or disabilities, or both,
802-occurring on or after January 1, 2007, while a member is performing
803-qualified military service, as defined in chapter 43 of title 38, United
804-States code, to the extent permitted by section 414(u)(9) of the federal
805-internal revenue code, for the benefit accrual purposes and in the case
806-of death, for vesting purposes, the member will be treated as having
807-earned years of service for the period of qualified military service,
808-having returned to employment on the day before the death or
809-disability, or both, and then having terminated on the date of death or
810-disability. This provision shall be applied to all similarly situated
811-individuals in a reasonably equivalent manner.
1482+contribute to receive credit for prior or participating service if the election
1483+is irrevocable and applies to amounts contributed before retirement.
1484+(10) (A) Notwithstanding any provision of this plan to the contrary,
1485+contributions, benefits and service credit with respect to qualified military
1486+service will be provided in accordance with section 414(u) of the federal
1487+internal revenue code and the uniformed services employment and
1488+reemployment rights act of 1994.
1489+(B) Effective with respect to deaths occurring on or after January 1,
1490+2007, while a member is performing qualified military service, as defined
1491+in chapter 43 of title 38, United States code, to the extent required by
1492+section 401(a)(37) of the federal internal revenue code, survivors of a
1493+member in the system, are entitled to any additional benefits that the
1494+system would provide if the member had resumed employment and then
1495+died, such as accelerated vesting or survivor benefits that are contingent on
1496+the member's death while employed. A deceased member's period of
1497+qualified military service must be counted for vesting purposes.
1498+(C) Effective with respect to deaths or disabilities, or both, occurring
1499+on or after January 1, 2007, while a member is performing qualified
1500+military service, as defined in chapter 43 of title 38, United States code, to
1501+the extent permitted by section 414(u)(9) of the federal internal revenue
1502+code, for the benefit accrual purposes and in the case of death, for vesting
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1546+purposes, the member will be treated as having earned years of service for
1547+the period of qualified military service, having returned to employment on
1548+the day before the death or disability, or both, and then having terminated
1549+on the date of death or disability. This provision shall be applied to all
1550+similarly situated individuals in a reasonably equivalent manner.
8121551 (D) Beginning January 1, 2009, to the extent required by section
8131552 414(u)(12) of the federal internal revenue code, an individual receiving
8141553 differential wage payments, as defined under section 3401(h)(2) of the
8151554 federal internal revenue code, from an employer shall be treated as
8161555 employed by that employer, and the differential wage payment shall be
8171556 treated as compensation for purposes of applying the limits on annual
818-additions under section 415(c) of the federal internal revenue code.
819-This provision shall be applied to all similarly situated individuals in a
1557+additions under section 415(c) of the federal internal revenue code. This
1558+provision shall be applied to all similarly situated individuals in a
8201559 reasonably equivalent manner.
8211560 (11) Upon the complete or partial termination of a retirement plan,
822-the rights of members to benefits accrued to the date of termination, to
823-the extent funded, or to the amounts in their accounts are
824-nonforfeitable, and amounts in their accounts may be distributed to
825-them.
1561+the rights of members to benefits accrued to the date of termination, to the
1562+extent funded, or to the amounts in their accounts are nonforfeitable, and
1563+amounts in their accounts may be distributed to them.
8261564 (d) The plan year for the retirement plan begins on July 1.
8271565 (e) The limitation year for purposes of section 415 of the federal
8281566 internal revenue code is the calendar year.
829-(f) The board may not engage in a transaction prohibited by
830-section 503(b) of the federal internal revenue code.
831-(g) (1) For purposes of determining an "actuarial equivalent" or of
832-an "actuarial computation" for members hired prior to July 1, 2009, the
833-board shall use the following:
1567+(f) The board may not engage in a transaction prohibited by section
1568+503(b) of the federal internal revenue code.
1569+(g) (1) For purposes of determining an "actuarial equivalent" or of an
1570+"actuarial computation" for members hired prior to July 1, 2009, the board
1571+shall use the following:
8341572 (A) The applicable mortality table is specified in revenue ruling
835-2001-62 or revenue ruling 2007-67, as applicable; and SENATE BILL No. 64—page 15
1573+2001-62 or revenue ruling 2007-67, as applicable; and
8361574 (B) the applicable interest factor is the actuarially assumed rate of
8371575 return established by the board.
8381576 (2) For purposes of determining an "actuarial equivalent" or an
8391577 "actuarial computation" for members hired on or after July 1, 2009, the
8401578 board shall use the following:
8411579 (A) The applicable mortality table is the
8421580 50
843-/50 male/female blend of
844-the RP 2000 health annuitant mortality table, projected to 2025; and
1581+/50 male/female blend of the
1582+RP 2000 health annuitant mortality table, projected to 2025; and
8451583 (B) the applicable interest factor is the actuarially assumed rate of
8461584 return established by the board.
8471585 (3) For converting amounts payable under the partial lump sum
8481586 option, the board shall use the following:
8491587 (A) The applicable mortality table is a
8501588 50
851-/50 male/female blend of
852-the 1983 group annuity mortality table; and
1589+/50 male/female blend of the
1590+1983 group annuity mortality table; and
8531591 (B) the applicable interest factor is the actuarially assumed rate of
8541592 return established by the board.
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8551636 (4) For benefit testing under section 415(b) of the federal internal
8561637 revenue code, the factors required by treasury regulations shall be used.
857-The applicable mortality table is specified in revenue ruling 2001-62
858-for years prior to January 1, 2009, and notice 2008-85 for years after
1638+The applicable mortality table is specified in revenue ruling 2001-62 for
1639+years prior to January 1, 2009, and notice 2008-85 for years after
8591640 December 31, 2008.
8601641 Sec. 4. K.S.A. 74-4902 and 74-4904 and K.S.A. 2024 Supp. 74-
8611642 49,123 are hereby repealed.
8621643 Sec. 5. This act shall take effect and be in force from and after its
8631644 publication in the statute book.
864-I hereby certify that the above BILL originated in the
865-SENATE, and passed that body
866-__________________________
867-SENATE adopted
868- Conference Committee Report ________________
869-_________________________
870-President of the Senate.
871-_________________________
872-Secretary of the Senate.
873-
874-Passed the HOUSE
875- as amended _________________________
876-HOUSE adopted
877- Conference Committee Report ________________
878-_________________________
879-Speaker of the House.
880-_________________________
881-Chief Clerk of the House.
882-APPROVED _____________________________
883-_________________________
884-Governor.
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