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AN ACT relating to the Teachers' Retirement System and declaring an emergency. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 161.155 (Effective January 1, 2022) is amended to read as 3
follows: 4
(1) As used in this section: 5
(a) "Teacher" shall mean any person for whom certification is required as a basis 6
of employment in the common schools of the state; 7
(b) "Employee" shall mean any person, other than a teacher, employed in the 8
public schools, whether on a full or part-time basis; 9
(c) "Immediate family" shall mean the teacher's or employee's spouse, children 10
including stepchildren and foster children, grandchildren, daughters-in-law 11
and sons-in law, brothers and sisters, parents and spouse's parents, and 12
grandparents and spouse's grandparents, without reference to the location or 13
residence of said relative, and any other blood relative who resides in the 14
teacher's or employee's home; 15
(d) "Sick leave bank" shall mean an aggregation of sick leave days contributed by 16
teachers or employees for use by teachers or employees who have exhausted 17
all sick leave and other available paid leave days; and 18
(e) "Assault" shall mean an act that intentionally causes injury so significant that 19
the victim is determined to be, by certification of a physician or surgeon duly 20
qualified under KRS Chapter 342, incapable of performing the duties of his or 21
her job. 22
(2) Each district board of education shall allow to each teacher and full-time employee 23
in its common school system not less than ten (10) days of sick leave during each 24
school year, without deduction of salary. Sick leave shall be granted to a teacher or 25
employee if he or she presents a personal affidavit or a certificate of a physician 26
stating that the teacher or employee was ill, that the teacher or employee was absent 27 UNOFFICIAL COPY 22 RS BR 1173
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for the purpose of attending to a member of his or her immediate family who was 1
ill, or for the purpose of mourning a member of his or her immediate family. The 2
ten (10) days of sick leave granted in this subsection may be taken by a teacher or 3
employee on any ten (10) days of the school year and shall be granted in addition to 4
accumulated sick leave days that have been credited to the teacher or employee 5
under the provisions of subsection (4) of this section. 6
(3) A school district shall coordinate among the income and benefits from workers' 7
compensation, temporary disability retirement, and district payroll and benefits so 8
that there is no loss of income or benefits to a teacher or employee for work time 9
lost because of an assault while performing the teacher's or employee's assigned 10
duties for a period of up to one (1) year after the assault. In the event a teacher or 11
employee suffers an assault while performing his or her assigned duties that results 12
in injuries that qualify the teacher or employee for workers' compensation benefits, 13
the district shall provide leave to the teacher or employee for up to one (1) year after 14
the assault with no loss of income or benefits under the following conditions: 15
(a) The district shall pay the salary of the teacher or employee between the time 16
of the assault and the time the teacher's or employee's workers' compensation 17
income benefits take effect, or the time the teacher or employee is certified to 18
return to work by a physician or surgeon duly qualified under KRS Chapter 19
342, whichever is sooner; 20
(b) The district shall pay, for up to one (1) year from the time of the assault, the 21
difference between the salary of the teacher or employee and any workers' 22
compensation income benefits received by the teacher or employee resulting 23
from the assault. Payments by the district shall include payments for 24
intermittent work time missed as a result of the assault during the one (1) year 25
period. If the teacher's or employee's workers' compensation income benefits 26
cease during the one (1) year period after the assault, the district shall also 27 UNOFFICIAL COPY 22 RS BR 1173
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cease to make payments under this paragraph; 1
(c) The Commonwealth, through the Kentucky Department of Education, shall 2
make the employer's health insurance contribution during the period that the 3
district makes payments under paragraphs (a) and (b) of this subsection; 4
(d) The Commonwealth, through the Kentucky Department of Education, shall 5
make the employer's contribution to the retirement system in which the 6
teacher or employee is a member during the period that the district makes 7
payments under paragraphs (a) and (b) of this subsection; and 8
(e) Payments to a teacher or employee under paragraphs (a) and (b) of this 9
subsection shall be coordinated with workers' compensation benefits under 10
KRS Chapter 342, disability retirement benefits for teachers under KRS 11
161.661 to 161.663, and disability retirement benefits for employees under 12
KRS 61.600 to 61.621 and 78.5522, 78.5524, 78.5526, 78.5528, and 78.5530 13
so that the teacher or employee receives income equivalent to his or her full 14
contracted salary, but in no event shall the combined payments exceed one 15
hundred percent (100%) of the teacher's or employee's full contracted salary. 16
(4) Days of sick leave not taken by an employee or a teacher during any school year 17
shall accumulate without limitation and be credited to that employee or teacher. 18
Accumulated sick leave may be taken in any school year. Any district board of 19
education may, in its discretion, allow employees or teachers in its common school 20
system sick leave in excess of the number of days prescribed in this section and may 21
allow school district employees and teachers to use up to three (3) days' sick leave 22
per school year for emergency leave pursuant to KRS 161.152(3). Any accumulated 23
sick leave days credited to an employee or a teacher shall remain so credited in the 24
event he or she transfers his or her place of employment from one (1) school district 25
to another within the state or to the Kentucky Department of Education or transfers 26
from the Department of Education to a school district. 27 UNOFFICIAL COPY 22 RS BR 1173
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(5) Accumulated days of sick leave shall be granted to a teacher or employee if, prior to 1
the opening day of the school year, an affidavit or a certificate of a physician is 2
presented to the district board of education, stating that the teacher or employee is 3
unable to commence his or her duties on the opening day of the school year, but will 4
be able to assume his or her duties within a period of time that the board determines 5
to be reasonable. 6
(6) Any school teacher or employee may repurchase previously used sick leave days 7
with the concurrence of the local school board by paying to the district an amount 8
equal to the total of all costs associated with the used sick leave. 9
(7) A district board of education may adopt a plan for a sick leave bank. The plan may 10
include limitations upon the number of days a teacher or employee may annually 11
contribute to the bank and limitations upon the number of days a teacher or 12
employee may annually draw from the bank. Only those teachers or employees who 13
contribute to the bank may draw upon the bank. Days contributed will be deducted 14
from the days available to the contributing teacher or employee. The sick leave bank 15
shall be administered in accordance with a policy adopted by the board of 16
education. 17
(8) (a) A district board of education shall establish a sick leave donation program to 18
permit teachers or employees to voluntarily contribute sick leave to teachers 19
or employees in the same school district who are in need of an extended 20
absence from school. A teacher or employee who has accrued more than 21
fifteen (15) days' sick leave may request the board of education to transfer a 22
designated amount of sick leave to another teacher or employee who is 23
authorized to receive the sick leave donated. A teacher or employee may not 24
request an amount of sick leave be donated that reduces his or her sick leave 25
balance to less than fifteen (15) days. 26
(b) A teacher or employee may receive donations of sick leave if: 27 UNOFFICIAL COPY 22 RS BR 1173
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1. a. The teacher or employee or a member of his or her immediate 1
family suffers from a medically certified illness, injury, 2
impairment, or physical or mental condition that has caused or is 3
likely to cause the teacher or employee to be absent for at least ten 4
(10) days; or 5
b. The teacher or employee suffers from a catastrophic loss to his or 6
her personal or real property, due to either a natural disaster or fire, 7
that either has caused or will likely cause the employee to be 8
absent for at least ten (10) consecutive working days; 9
2. The teacher's or employee's need for the absence and use of leave are 10
certified by a licensed physician for leave requested under subparagraph 11
1.a. of this subsection; 12
3. The teacher or employee has exhausted his or her accumulated sick 13
leave, personal leave, and any other leave granted by the school district; 14
and 15
4. The teacher or employee has complied with the school district's policies 16
governing the use of sick leave. 17
(c) While a teacher or employee is on sick leave provided by this section, he or 18
she shall be considered a school district employee, and his or her salary, 19
wages, and other employee benefits shall not be affected. 20
(d) Any sick leave that remains unused, is not needed by a teacher or employee, 21
and will not be needed in the future shall be returned to the teacher or 22
employee donating the sick leave. 23
(e) The board of education shall adopt policies and procedures necessary to 24
implement the sick leave donation program. 25
(9) A teacher or employee may use up to thirty (30) days of sick leave following the 26
birth or adoption of a child or children. Additional days may be used when the need 27 UNOFFICIAL COPY 22 RS BR 1173
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is verified by a physician's statement. 1
(10) (a) After July 1, 1982, a district board of education may compensate, at the time 2
of retirement or upon the death of a member in active contributing status at the 3
time of death who was eligible to retire by reason of service, an employee or a 4
teacher, or the estate of an employee or teacher, for each unused sick leave 5
day. The rate of compensation for each unused sick leave day shall be based 6
on a percentage of the daily salary rate calculated from the employee's or 7
teacher's last annual salary, not to exceed thirty percent (30%). 8
(b) [Except as provided in paragraph (c) of this subsection, ]Payment for unused 9
sick leave days under this subsection shall be incorporated into the annual 10
salary of the final year of service for inclusion in the calculation of the 11
employee's or teacher's retirement allowance only at the time of his or her 12
initial retirement, provided that the member makes the regular retirement 13
contribution for members on the sick leave payment. The accumulation of 14
these days includes unused sick leave days held by the employee or teacher at 15
the time of implementation of the program. 16
(c) [For a teacher or employee who becomes a nonuniversity member of the 17
Teachers' Retirement System on or after January 1, 2022, as provided by KRS 18
161.220, payment for unused sick leave days under this subsection shall not 19
be incorporated into the annual compensation used to calculate the teacher's or 20
employee's retirement allowance in the foundational benefit component as 21
described by KRS 161.633 but may be deposited into the nonuniversity 22
member's supplemental benefit component as provided by KRS 161.635. 23
(d)] For a teacher or employee who begins employment with a local school district 24
on or after July 1, 2008, the maximum amount of unused sick leave days a 25
district board of education may recognize in calculating the payment of 26
compensation to the teacher or employee under this subsection shall not 27 UNOFFICIAL COPY 22 RS BR 1173
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exceed three hundred (300) days. 1
(11) Any statute to the contrary notwithstanding, employees and teachers who 2
transferred from the Department of Education to a school district, from a school 3
district to the Department of Education, or from one (1) school district to another 4
school district after July 15, 1981, shall receive credit for any unused sick leave to 5
which the employee or teacher was entitled on the date of transfer. This credit shall 6
be for the purposes set forth in subsection (10) of this section. 7
(12) The death benefit provided in subsection (10) of this section may be cited as the 8
Baughn Benefit. 9
Section 2. KRS 161.220 (Effective January 1, 2022) is amended to read as 10
follows: 11
As used in KRS 161.220 to 161.716 and 161.990: 12
(1) "Retirement system" means the arrangement provided for in KRS 161.220 to 13
161.716 and 161.990 for payment of allowances to members; 14
(2) "Retirement allowance" means the amount annually payable during the course of his 15
or her natural life to a member who has been retired by reason of service; 16
(3) "Disability allowance" means the amount annually payable to a member retired by 17
reason of disability; 18
(4) "Member" means the commissioner of education, deputy commissioners, associate 19
commissioners, and all division directors in the State Department of Education, 20
employees participating in the system pursuant to KRS 196.167(3)(b)1., and any 21
full-time teacher or professional occupying a position requiring certification or 22
graduation from a four (4) year college or university, as a condition of employment, 23
and who is employed by public boards, institutions, or agencies as follows: 24
(a) Local boards of education; 25
(b) Eastern Kentucky University, Kentucky State University, Morehead State 26
University, Murray State University, Western Kentucky University, and any 27 UNOFFICIAL COPY 22 RS BR 1173
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community colleges established under the control of these universities; 1
(c) State-operated secondary area vocational education or area technology centers, 2
Kentucky School for the Blind, and Kentucky School for the Deaf; 3
(d) Other public education agencies as created by the General Assembly and those 4
members of the administrative staff of the Teachers' Retirement System of the 5
State of Kentucky whom the board of trustees may designate by administrative 6
regulation; 7
(e) Regional cooperative organizations formed by local boards of education or 8
other public educational institutions listed in this subsection, for the purpose 9
of providing educational services to the participating organizations; 10
(f) All full-time members of the staffs of the Kentucky Association of School 11
Administrators, Kentucky Education Association, Kentucky Vocational 12
Association, Kentucky High School Athletic Association, Kentucky Academic 13
Association, and the Kentucky School Boards Association who were members 14
of the Kentucky Teachers' Retirement System or were qualified for a position 15
covered by the system at the time of employment by the association in the 16
event that the board of directors of the respective association petitions to be 17
included. The board of trustees of the Kentucky Teachers' Retirement System 18
may designate by resolution whether part-time employees of the petitioning 19
association are to be included. The state shall make no contributions on 20
account of these employees, either full-time or part-time. The association shall 21
make the employer's contributions, including any contribution that is specified 22
under KRS 161.550. The provisions of this paragraph shall be applicable to 23
persons in the employ of the associations on or subsequent to July 1, 1972; 24
(g) Employees of the Council on Postsecondary Education who were employees 25
of the Department for Adult Education and Literacy and who were members 26
of the Kentucky Teachers' Retirement System at the time the department was 27 UNOFFICIAL COPY 22 RS BR 1173
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transferred to the council pursuant to Executive Order 2003-600; 1
(h) The Office of Career and Technical Education; 2
(i) The Office of Vocational Rehabilitation; 3
(j) The Kentucky Educational Collaborative for State Agency Children; 4
(k) The Governor's Scholars Program; 5
(l) Any person who is retired for service from the retirement system and is 6
reemployed by an employer identified in this subsection in a position that the 7
board of trustees deems to be a member[, except that any person who becomes 8
a member on or after January 1, 2022, and subsequently draws a monthly 9
lifetime retirement allowance, shall upon reemployment after retirement not 10
earn a second retirement account]; 11
(m) Employees of the former Cabinet for Workforce Development who are 12
transferred to the Kentucky Community and Technical College System and 13
who occupy positions covered by the Kentucky Teachers' Retirement System 14
shall remain in the Teachers' Retirement System. New employees occupying 15
these positions, as well as newly created positions qualifying for Teachers' 16
Retirement System coverage that would have previously been included in the 17
former Cabinet for Workforce Development, shall be members of the 18
Teachers' Retirement System; 19
(n) Effective January 1, 1998, employees of state community colleges who are 20
transferred to the Kentucky Community and Technical College System shall 21
continue to participate in federal old age, survivors, disability, and hospital 22
insurance, and a retirement plan other than the Kentucky Teachers' Retirement 23
System offered by Kentucky Community and Technical College System. New 24
employees occupying positions in the Kentucky Community and Technical 25
College System as referenced in KRS 164.5807(5) that would not have 26
previously been included in the former Cabinet for Workforce Development, 27 UNOFFICIAL COPY 22 RS BR 1173
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shall participate in federal old age, survivors, disability, and hospital insurance 1
and have a choice at the time of employment of participating in a retirement 2
plan provided by the Kentucky Community and Technical College System, 3
including participation in the Kentucky Teachers' Retirement System, on the 4
same basis as faculty of the state universities as provided in KRS 161.540 and 5
161.620; 6
(o) Employees of the Office of General Counsel, the Office of Budget and 7
Administrative Services, and the Office of Quality and Human Resources 8
within the Office of the Secretary of the former Cabinet for Workforce 9
Development and the commissioners of the former Department for Adult 10
Education and Literacy and the former Department for Technical Education 11
who were contributing to the Kentucky Teachers' Retirement System as of 12
July 15, 2000; 13
(p) Employees of the Kentucky Department of Education only who are graduates 14
of a four (4) year college or university, notwithstanding a substitution clause 15
within a job classification, and who are serving in a professional job 16
classification as defined by the department; 17
(q) The Governor's School for Entrepreneurs Program; 18
(r) Employees of the Office of Adult Education within the Department of 19
Workforce Investment in the Education and Workforce Development Cabinet 20
who were employees of the Council on Postsecondary Education, Kentucky 21
Adult Education Program and who were members of the Kentucky Teachers' 22
Retirement System at the time the Program was transferred to the cabinet 23
pursuant to Executive Orders 2019-0026 and 2019-0027; and 24
(s) Employees of the Education Professional Standards Board who were members 25
of the Kentucky Teachers' Retirement System at the time the employees were 26
transferred to the Kentucky Department of Education pursuant to Executive 27 UNOFFICIAL COPY 22 RS BR 1173
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Order 2020-590; 1
(5) "Present teacher" means any teacher who was a teacher on or before July 1, 1940, 2
and became a member of the retirement system created by 1938 (1st Extra. Sess.) 3
Ky. Acts ch. 1, on the date of the inauguration of the system or within one (1) year 4
after that date, and any teacher who was a member of a local teacher retirement 5
system in the public elementary or secondary schools of the state on or before July 6
1, 1940, and continued to be a member of the system until he or she, with the 7
membership of the local retirement system, became a member of the state Teachers' 8
Retirement System or who becomes a member under the provisions of KRS 9
161.470(4); 10
(6) "New teacher" means any member not a present teacher; 11
(7) "Prior service" means the number of years during which the member was a teacher 12
in Kentucky prior to July 1, 1941, except that not more than thirty (30) years' prior 13
service shall be allowed or credited to any teacher; 14
(8) "Subsequent service" means the number of years during which the teacher is a 15
member of the Teachers' Retirement System after July 1, 1941; 16
(9) "Final average salary" means the average of the five (5) highest annual salaries 17
which the member has received for service in a covered position and on which the 18
member has made contributions, or on which the public board, institution, or 19
agency has picked-up member contributions pursuant to KRS 161.540(2), or the 20
average of the five (5) years of highest salaries as defined in KRS 61.680(2)(a), 21
which shall include picked-up member contributions. Additionally, the board of 22
trustees may approve a final average salary based upon the average of the three (3) 23
highest salaries for[ individuals who become] members[ prior to January 1, 2022,] 24
who are at least fifty-five (55) years of age and have a minimum of twenty-seven 25
(27) years of Kentucky service credit. However, if any of the five (5) or three (3) 26
highest annual salaries used to calculate the final average salary was paid within the 27 UNOFFICIAL COPY 22 RS BR 1173
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three (3) years immediately prior to the date of the member's retirement[ for 1
individuals who become members prior to January 1, 2022, or within the five (5) 2
years immediately prior to the date of the member's retirement for individuals who 3
become members on or after January 1, 2022], the amount of salary to be included 4
for each of those three (3) years [or five (5) years, as applicable, ]for the purpose of 5
calculating the final average salary shall be limited to the lesser of: 6
(a) The member's actual salary; or 7
(b) The member's annual salary that was used for retirement purposes during each 8
of the prior three (3) years [or five (5) years, as applicable, ]plus a percentage 9
increase equal to the percentage increase received by all other members 10
employed by the public board, institution, or agency, or for members of school 11
districts, the highest percentage increase received by members on any one (1) 12
rank and step of the salary schedule of the school district. The increase shall 13
be computed on the salary that was used for retirement purposes. The board of 14
trustees may promulgate an administrative regulation in accordance with KRS 15
Chapter 13A to establish a methodology for measuring the limitation so that 16
the combined increases in salary for each of the last three (3) full years of 17
salary prior to retirement shall not exceed the total permissible percentage 18
increase received by other members of the employer for the same three (3) 19
year period. 20
For individuals who became members of the retirement system prior to July 1, 21
2021, this limitation shall not apply if the member receives an increase in salary in a 22
percentage exceeding that received by the other members, and this increase was 23
accompanied by a corresponding change in position or in length of employment. 24
The board of trustees may promulgate an administrative regulation in accordance 25
with KRS Chapter 13A to provide definitions for a corresponding change in 26
position or in length of employment. This limitation shall also not apply to the 27 UNOFFICIAL COPY 22 RS BR 1173
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payment to a member for accrued annual leave if the individual becomes a member 1
before July 1, 2008, or accrued sick leave which is authorized by statute and which 2
shall[, for individuals subject to KRS 161.155(10) who became nonuniversity 3
members of the system prior to January 1, 2022,] be included as part of a retiring 4
member's annual compensation for the member's last year of active service as 5
provided by Section 1 of this Act; 6
(10) "Annual compensation" means the total salary received by a member as 7
compensation for all services performed in employment covered by the retirement 8
system during a fiscal year. Annual compensation shall not include payment for any 9
benefit or salary adjustments made by the public board, institution, or agency to the 10
member or on behalf of the member which is not available as a benefit or salary 11
adjustment to other members employed by that public board, institution, or agency. 12
Annual compensation shall not include the salary supplement received by a member 13
under KRS 157.197(2)(c), 158.6455, or 158.782 on or after July 1, 1996. Under no 14
circumstances shall annual compensation include compensation that is earned by a 15
member while on assignment to an organization or agency that is not a public board, 16
institution, or agency listed in subsection (4) of this section. In the event that federal 17
law requires that a member continue membership in the retirement system even 18
though the member is on assignment to an organization or agency that is not a 19
public board, institution, or agency listed in subsection (4) of this section, the 20
member's annual compensation for retirement purposes shall be deemed to be the 21
annual compensation, as limited by subsection (9) of this section, last earned by the 22
member while still employed solely by and providing services directly to a public 23
board, institution, or agency listed in subsection (4) of this section. The board of 24
trustees shall determine if any benefit or salary adjustment qualifies as annual 25
compensation. For an individual who becomes a member on or after July 1, 2008, 26
annual compensation shall not include lump-sum payments upon termination of 27 UNOFFICIAL COPY 22 RS BR 1173
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employment for accumulated annual or compensatory leave; 1
(11) "Age of member" means the age attained on the first day of the month immediately 2
following the birthdate of the member. This definition is limited to retirement 3
eligibility and does not apply to tenure of members; 4
(12) "Employ," and derivatives thereof, means relationships under which an individual 5
provides services to an employer as an employee, as an independent contractor, as 6
an employee of a third party, or under any other arrangement as long as the services 7
provided to the employer are provided in a position that would otherwise be covered 8
by the Kentucky Teachers' Retirement System and as long as the services are being 9
provided to a public board, institution, or agency listed in subsection (4) of this 10
section; 11
(13) "Regular interest" means: 12
(a) For an individual who becomes a member prior to July 1, 2008, interest at 13
three percent (3%) per annum; and[:] 14
(b) For an individual who becomes a member on or after July 1, 2008[, but prior 15
to January 1, 2022], interest at two and one-half percent (2.5%) per annum for 16
purposes of crediting interest to the teacher savings account or any other 17
contributions made by the employee that are refundable to the employee upon 18
termination of employment[; and 19
(c) For an individual who becomes a member on or after January 1, 2022, the 20
rolling five (5) year yield on a thirty (30) year United States Treasury bond as 21
of the end of May prior to the most recently completed fiscal year, except that: 22
1. Once the member has at least sixty (60) months of service in the system 23
it shall mean interest at two and one-half percent (2.5%) per annum for 24
purposes of crediting interest to employee contributions in the 25
foundational benefit component or any other contributions made by the 26
employee to the foundational benefit component that are refundable to 27 UNOFFICIAL COPY 22 RS BR 1173
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the employee upon termination of employment; and 1
2. The board shall have the authority to adjust the regular interest rate for 2
individuals who become members on or after January 1, 2022, in 3
accordance with KRS 161.633 and 161.634]; 4
(14) "Accumulated contributions" means the contributions of a member to the teachers' 5
savings fund, including picked-up member contributions as described in KRS 6
161.540(2), plus accrued regular interest; 7
(15) "Annuitant" means a person who receives a retirement allowance or a disability 8
allowance; 9
(16) "Local retirement system" means any teacher retirement or annuity system created 10
in any public school district in Kentucky in accordance with the laws of Kentucky; 11
(17) "Fiscal year" means the twelve (12) month period from July 1 to June 30. The 12
retirement plan year is concurrent with this fiscal year. A contract for a member 13
employed by a local board of education may not exceed two hundred sixty-one 14
(261) days in the fiscal year; 15
(18) "Public schools" means the schools and other institutions mentioned in subsection 16
(4) of this section; 17
(19) "Dependent" as used in KRS 161.520 and 161.525 means a person who was 18
receiving, at the time of death of the member, at least one-half (1/2) of the support 19
from the member for maintenance, including board, lodging, medical care, and 20
related costs; 21
(20) "Active contributing member" means a member currently making contributions to 22
the Teachers' Retirement System, who made contributions in the next preceding 23
fiscal year, for whom picked-up member contributions are currently being made, or 24
for whom these contributions were made in the next preceding fiscal year; 25
(21) "Full-time" means employment in a position that requires services on a continuing 26
basis equal to at least seven-tenths (7/10) of normal full-time service on a fiscal year 27 UNOFFICIAL COPY 22 RS BR 1173
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basis; 1
(22) "Full actuarial cost," when used to determine the payment that a member must pay 2
for service credit means the actuarial value of all costs associated with the 3
enhancement of a member's benefits or eligibility for benefit enhancements, 4
including health insurance supplement payments made by the retirement system. 5
The actuary for the retirement system shall determine the full actuarial value costs 6
and actuarial cost factor tables as provided in KRS 161.400; 7
(23) "Last annual compensation" means the annual compensation, as defined by 8
subsection (10) of this section and as limited by subsection (9) of this section, 9
earned by the member during the most recent period of contributing service, either 10
consecutive or nonconsecutive, that is sufficient to provide the member with one (1) 11
full year of service credit in the Kentucky Teachers' Retirement System, and which 12
compensation is used in calculating the member's initial retirement allowance, 13
excluding bonuses, retirement incentives, payments for accumulated sick leave, 14
annual, personal, and compensatory leave, and any other lump-sum payment. For an 15
individual who becomes a member on or after July 1, 2008, payments for annual or 16
compensatory leave shall not be included in determining the member's last annual 17
compensation; 18
(24) "Participant" means a member, as defined by subsection (4) of this section, or an 19
annuitant, as defined by subsection (15) of this section; 20
(25) "Qualified domestic relations order" means any judgment, decree, or order, 21
including approval of a property settlement agreement, that: 22
(a) Is issued by a court or administrative agency; and 23
(b) Relates to the provision of child support, alimony payments, or marital 24
property rights to an alternate payee; 25
(26) "Alternate payee" means a spouse, former spouse, child, or other dependent of a 26
participant, who is designated to be paid retirement benefits in a qualified domestic 27 UNOFFICIAL COPY 22 RS BR 1173
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relations order; 1
(27) "University member" means an individual who becomes a member through 2
employment with an employer specified in subsection (4)(b) and (n) of this section; 3
(28) "Nonuniversity member" means an individual who becomes a member through 4
employment with an employer specified under subsection (4) of this section, except 5
for those members employed by an employer specified in subsection (4)(b) and (n) 6
of this section; and[ ] 7
(29) ["Accumulated employer contribution" means the employer contribution deposited 8
to a member's account through the supplemental benefit component and regular 9
interest credited on such amounts as provided by KRS 161.635 for nonuniversity 10
members and KRS 161.636 for university members; 11
(30) ]"Accumulated account balance" means[: 12
(a) For members who began participating in the system prior to January 1, 2022,] 13
the member's accumulated contributions[; or 14
(b) For members who began participating in the system on or after January 1, 15
2022, the combined sum of the member's accumulated contributions and the 16
member's accumulated employer contributions]; 17
[(31) "Foundational benefit component" means the benefits provided by KRS 161.220 to 18
161.716 to individuals who become members on or after January 1, 2022, except for 19
the supplemental benefit component and retiree health benefits set forth in KRS 20
161.675; and 21
(32) "Supplemental benefit component" means: 22
(a) The benefit established pursuant to KRS 161.635 for individuals who become 23
nonuniversity members on or after January 1, 2022; or 24
(b) The benefit established pursuant to KRS 161.636 for individuals who become 25
university members on or after January 1, 2022.] 26
Section 3. KRS 161.540 (Effective January 1, 2022) is amended to read as 27 UNOFFICIAL COPY 22 RS BR 1173
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follows: 1
(1) (a) Each individual who is[becomes] a contributing nonuniversity member [prior 2
to January 1, 2022, ]shall contribute to the retirement system twelve and eight 3
hundred fifty-five thousandths percent (12.855%) of annual compensation, of 4
which: 5
1. Nine and one hundred five thousandths percent (9.105%) of annual 6
compensation shall be used to fund pension benefits; and 7
2. Three and three-quarters percent (3.75%) of annual compensation shall 8
be used to fund retiree health benefits. 9
(b) Each individual who is[becomes] a contributing university member [prior to 10
January 1, 2022, ]shall contribute to the retirement system ten and four-tenths 11
percent (10.4%) of annual compensation, of which: 12
1. Seven and six hundred twenty-five thousandths percent (7.625%) of 13
annual compensation shall be used to fund pension benefits; and 14
2. Two and seven hundred seventy-five thousandths percent (2.775%) of 15
annual compensation shall be used to fund retiree health benefits. 16
[(c) Each individual who becomes a contributing nonuniversity member on or 17
after January 1, 2022, shall contribute to the retirement system fourteen and 18
three-quarters percent (14.75%) of annual compensation, of which: 19
1. Nine percent (9%) of annual compensation shall be used to fund pension 20
benefits in the foundational benefit component as described by KRS 21
161.633. The contribution provided by this subparagraph shall not be 22
used to fund the supplemental benefit account as provided by KRS 23
161.635; 24
2. Two percent (2%) of annual compensation shall fund the required 25
employee contribution in the supplemental benefit component in KRS 26
161.635, except that the board may direct these contributions on a 27 UNOFFICIAL COPY 22 RS BR 1173
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prospective basis into the pension and life insurance funds to contain 1
costs of the foundational benefit component within the provisions of 2
KRS 161.633; and 3
3. Three and three-quarters percent (3.75%) of annual compensation shall 4
be used to fund retiree health benefits. 5
(d) Each individual who becomes a contributing university member on or after 6
January 1, 2022, shall contribute to the retirement system nine and seven 7
hundred seventy-five thousandths percent (9.775%) of annual compensation, 8
of which: 9
1. Five percent (5%) of annual compensation shall be used to fund pension 10
benefits in the foundational benefit component as described by KRS 11
161.634. The contribution provided by this subparagraph shall not be 12
used to fund the supplemental benefit account as provided by KRS 13
161.636; 14
2. Two percent (2%) of annual compensation shall fund the required 15
employee contribution in the supplemental benefit component in KRS 16
161.636, except that the board may direct these contributions on a 17
prospective basis into the pension and life insurance funds to contain 18
costs of the foundational benefit component within the provisions of 19
KRS 161.634; and 20
3. Two and seven hundred and seventy-five thousandths percent (2.775%) 21
of annual compensation shall be used to fund retiree health benefits.] 22
(c)[(e)] When the medical insurance fund established under KRS 161.420(5) 23
achieves a sufficient prefunded status as determined by the retirement system's 24
actuary, the board of trustees shall recommend to the General Assembly that 25
the contributions required under paragraph (a)2. or[,] (b)2.[, (c)3., or (d)3.] of 26
this subsection shall, in an actuarially accountable manner, be either 27 UNOFFICIAL COPY 22 RS BR 1173
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decreased, suspended, or eliminated. 1
(d)[(f)] Payments authorized by statute that are made to retiring members, who 2
became members of the system before July 1, 2008, for not more than sixty 3
(60) days of unused accrued annual leave shall, subject to KRS 161.220(10), 4
be considered as part of the member's annual compensation, and shall be used 5
only for the member's final year of active service. Notwithstanding the 6
provisions of this subsection or any other statute to the contrary, for retirement 7
calculation purposes, members may only be credited for payment of annual 8
leave under the following conditions: 9
1. Payment by an employer for annual leave shall be equally available to all 10
members serving under contracts requiring the same number of worked 11
days and greater; and 12
2. At least two (2) members of the employer shall receive payment for 13
annual leave. 14
(e)[(g)] The contribution of members shall not exceed the applicable percentages 15
on annual compensation as set forth in this section or as where otherwise 16
limited by statute. When a member retires, if it is determined that he or she 17
has made contributions on a salary in excess of the amount to be included for 18
the purpose of calculating his or her final average salary, any excess 19
contribution shall be refunded in a lump sum to the member's employer for 20
distribution to the member. 21
(2) Each public board, institution, or agency listed in KRS 161.220(4) shall, solely for 22
the purpose of compliance with Section 414(h) of the United States Internal 23
Revenue Code, pick up the member contributions required by this section for all 24
compensation earned after August 1, 1982, and the contributions so picked up shall 25
be treated as employer contributions in determining tax treatment under the United 26
States Internal Revenue Code and KRS 141.010. The picked-up member 27 UNOFFICIAL COPY 22 RS BR 1173
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contribution shall satisfy all obligations to the retirement system satisfied prior to 1
August 1, 1982, by the member contribution, and the picked-up member 2
contribution shall be in lieu of a member contribution. Each employer shall pay 3
these picked-up member contributions from the same source of funds which is used 4
to pay earnings to the member. The member shall have no option to receive the 5
contributed amounts directly instead of having them paid by the employer to the 6
system. Member contributions picked-up after August 1, 1982, shall be treated for 7
all purposes of KRS 161.220 to 161.714 in the same manner and to the same extent 8
as member contributions made prior to August 1, 1982. 9
Section 4. KRS 161.550 (Effective January 1, 2022) is amended to read as 10
follows: 11
(1) Each employer, except as provided under KRS 161.555, shall contribute annually to 12
the Teachers' Retirement System a permanent employer contribution rate on behalf 13
of each employee it employs equal to: 14
(a) Thirteen and one hundred five thousandths percent (13.105%) of the total 15
annual compensation of nonuniversity members who become members prior 16
to July 1, 2008. Of this permanent employer contribution rate: 17
1. Twelve and three hundred fifty-five thousandths percent (12.355%) of 18
the total annual compensation shall be used to fund pension and life 19
insurance benefits; and 20
2. Three-quarters of a percent (0.75%) of annual compensation shall be 21
used to provide funding to the medical insurance fund as provided under 22
KRS 161.420(5). If the board of trustees establishes a trust fund under 23
26 U.S.C. sec. 115, the board may deposit the employer contribution 24
provided in this subparagraph in that trust fund; 25
(b) Fourteen and one hundred five thousandths percent (14.105%) of the total 26
annual compensation of nonuniversity members who become members on or 27 UNOFFICIAL COPY 22 RS BR 1173
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after July 1, 2008[, but prior to January 1, 2022]. Of this permanent employer 1
contribution rate: 2
1. Thirteen and three hundred fifty-five thousandths percent (13.355%) of 3
the total annual compensation shall be used to fund pension and life 4
insurance benefits; and 5
2. Three-quarters of a percent (0.75%) of annual compensation shall be 6
used to provide funding to the medical insurance fund as provided under 7
KRS 161.420(5). If the board of trustees establishes a trust fund under 8
26 U.S.C. sec. 115, the board may deposit the employer contribution 9
provided in this subparagraph in that trust fund; 10
(c) Thirteen and sixty-five hundredths percent (13.65%) of the total annual 11
compensation of university members[ who become members prior to January 12
1, 2022]. Of this permanent employer contribution rate: 13
1. Ten and eight hundred seventy-five thousandths percent (10.875%) of 14
the total annual compensation shall be used to fund pension and life 15
insurance benefits; and 16
2. Two and seven hundred seventy-five thousandths percent (2.775%) of 17
annual compensation shall be used to provide funding to the medical 18
insurance fund as provided under KRS 161.420(5). If the board of 19
trustees establishes a trust fund under 26 U.S.C. sec. 115, the board may 20
deposit the employer contribution provided in this subparagraph in that 21
trust fund[; 22
(d) Ten and three-quarters percent (10.75%) of the total annual 23
compensation of nonuniversity members who become members on or 24
after January 1, 2022. Of this permanent employer contribution rate: 25
1. Eight percent (8%) of the total annual compensation shall be used to 26
fund pension and life insurance benefits. The contribution provided by 27 UNOFFICIAL COPY 22 RS BR 1173
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this subparagraph shall not be used to fund the supplemental benefit 1
account as provided by KRS 161.635; 2
2. Two percent (2%) of the total annual compensation shall be used to fund 3
the mandatory employer contribution of the supplemental benefit 4
component, except that the board may direct these contributions on a 5
prospective basis into the pension and life insurance funds to contain 6
costs within the provisions of KRS 161.633; and 7
3. Three-quarters of one percent (0.75%) of annual compensation shall be 8
used to provide funding to the medical insurance fund as provided under 9
KRS 161.420(5). If the board of trustees establishes a trust fund under 10
26 U.S.C. sec. 115, the board may deposit the employer contribution 11
provided in this subdivision in that trust fund; and 12
(e) Nine and seven hundred seventy-five thousandths percent (9.775%) of 13
total annual compensation of university members who become members 14
on or after January 1, 2022. Of this permanent employer contribution 15
rate: 16
1. Five and seven hundred seventy-five thousandths percent (5.775%) of 17
the total annual compensation shall be used to fund pension and life 18
insurance benefits. The contribution provided by this subparagraph shall 19
not be used to fund the supplemental benefit account as provided by 20
KRS 161.636; 21
2. Two percent (2%) of the total annual compensation shall be used to fund 22
the mandatory employer contribution of the supplemental benefit 23
component, except that the board may direct these contributions on a 24
prospective basis into the pension and life insurance funds to contain 25
costs within the provisions of KRS 161.634; and 26
3. Two percent (2%) of annual compensation shall be used to provide 27 UNOFFICIAL COPY 22 RS BR 1173
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funding to the medical insurance fund as provided under KRS 1
161.420(5). If the board of trustees establishes a trust fund under 26 2
U.S.C. sec. 115, the board may deposit the employer contribution 3
provided in this subparagraph in that trust fund]. 4
(2) In addition to the required contributions in subsection (1) of this section, the state 5
shall contribute annually to the Teachers' Retirement System a percentage of the 6
total salaries of the state-funded and federally funded members it employs to pay the 7
cost of health insurance coverage for retirees who are not eligible for Medicare and 8
who retire on or after July 1, 2010, less the amounts that are otherwise required to 9
be paid by the retirees under KRS 161.675. The board shall deposit funds in the 10
medical insurance fund unless the board of trustees has established a trust fund 11
under 26 U.S.C. sec. 115 for this purpose. In this case, the board may deposit the 12
employer contribution in that trust fund. This contribution shall be known as the 13
state medical insurance fund stabilization contribution. The percentage to be 14
contributed by the state under this subsection: 15
(a) Shall be determined by the retirement system's actuary for each biennial 16
budget period; 17
(b) May be suspended or adjusted by the General Assembly if in its judgment the 18
welfare of the Commonwealth so demands; and 19
(c) Shall not exceed the lesser of the actual benefit cost for retirees not eligible for 20
Medicare who retire on or after July 1, 2010, or the amount contributed by 21
employers under subsection (3) of this section. 22
(3) All employers who employ nonuniversity members shall make a contribution for 23
each payroll on behalf of their active employees who participate in the Teachers' 24
Retirement System in an amount equal to three percent (3%) of payroll of those 25
active employees. The contribution specified by this subsection shall be used to 26
fund retiree health benefits. 27 UNOFFICIAL COPY 22 RS BR 1173
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(4) When the medical insurance fund established under KRS 161.420(5) achieves a 1
sufficient prefunded status as determined by the Teachers' Retirement System's 2
actuary, the board of trustees shall recommend to the General Assembly that the 3
contributions required under subsections (1)(c)2. [and (e)3. ]and (3) of this section 4
shall, in an actuarially accountable manner, be either decreased, suspended, or 5
eliminated. The decrease, suspension, or elimination in contributions required 6
under subsection (1)(c)2. of this section shall not exceed two and twenty-five 7
thousandths percent (2.025%) of annual compensation. [ The decrease, suspension, 8
or elimination in contributions required under subsection (1)(e)3. of this section 9
shall not exceed one and twenty-five hundredths percent (1.25%) of annual 10
compensation.] 11
(5) Each employer shall remit the required employer contributions to the retirement 12
system under the terms and conditions specified for member contributions under 13
KRS 161.560. The state shall provide annual appropriations based upon estimated 14
funds needed to meet the requirements of KRS 161.155, 161.168, 161.507(4), 15
161.515, 161.545, 161.553, 161.605, 161.612, and 161.620(1), (3), (5), (6), and (7). 16
In the event an annual appropriation is less than the amount of these requirements, 17
the state shall make up the deficit in the next biennium budget appropriation to the 18
retirement system. Employer contributions to the retirement system are for the 19
exclusive purpose of providing benefits to members and annuitants and these 20
contributions shall be considered deferred compensation to the members. This 21
subsection shall not apply to costs applicable to individuals who become members 22
on or after January 1, 2022. 23
Section 5. KRS 161.600 (Effective January 1, 2022) is amended to read as 24
follows: 25
(1) [An individual who becomes ]A member of the retirement system[ prior to January 26
1, 2022,] may qualify for service retirement by meeting one (1) of the following 27 UNOFFICIAL COPY 22 RS BR 1173
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requirements: 1
(a) Attainment of age sixty (60) years and completion of five (5) years of 2
Kentucky service; 3
(b) 1. For an individual who becomes a member before July 1, 2008, 4
attainment of age fifty-five (55) years and completion of a minimum of 5
five (5) years of Kentucky service with an actuarial reduction of the 6
basic allowance of five percent (5%) for each year the member's age is 7
less than sixty (60) years or for each year the member's years of 8
Kentucky service credit is less than twenty-seven (27), whichever is the 9
lesser number; and 10
2. For an individual who becomes a member on or after July 1, 2008, 11
attainment of age fifty-five (55) years and completion of a minimum of 12
ten (10) years of Kentucky service with an actuarial reduction of the 13
basic retirement allowance of six percent (6%) for each year the 14
member's age is less than sixty (60) years or for each year the member's 15
years of Kentucky service credit is less than twenty-seven (27), 16
whichever is the lesser number; 17
(c) Completion of twenty-seven (27) years of Kentucky service. Out-of-state 18
service earned in accordance with the provisions of KRS 161.515(2) may be 19
used to meet this requirement; or 20
(d) Completion of the necessary years of service under provisions of KRS 21
61.559(2)(c) if the member is retiring under the reciprocity provisions of KRS 22
61.680. A member retiring under this paragraph who has not attained age 23
fifty-five (55) shall incur an actuarial reduction of the basic allowance 24
determined by the system's actuary for each year the member's service credit is 25
less than twenty-seven (27). 26
(2) [An individual who becomes a member of the retirement system on or after January 27 UNOFFICIAL COPY 22 RS BR 1173
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1, 2022, shall, except as adjusted by the board pursuant to KRS 161.633 or 161.634, 1
as applicable, be eligible to retire upon attainment of: 2
(a) Age sixty-five (65) and completion of a minimum of five (5) years of 3
Kentucky service; 4
(b) Age sixty (60) and completion of a minimum of ten (10) years of Kentucky 5
service; 6
(c) Age fifty-seven (57) and completion of a minimum of thirty (30) years of 7
Kentucky service; or 8
(d) Age fifty-seven (57) and completion of a minimum of ten (10) years of 9
Kentucky service with an actuarial reduction of the basic retirement allowance 10
of six percent (6%) for each year the member's age is less than sixty (60) years 11
or for each year the member's years of Kentucky service credit is less than 12
thirty (30), whichever is the lesser number. 13
(3)] Any person who has been a member in Kentucky for twenty-seven (27) years or 14
more and who withdraws from covered employment may continue to pay into the 15
fund each year until the end of the fiscal year in which he or she reaches the age of 16
sixty-five (65) years, the current contribution rate based on the annual compensation 17
received during the member's last full year in covered employment, less any 18
payment received for accrued sick leave or accrued leave from an employer. The 19
member shall be entitled to receive a retirement allowance as provided in KRS 20
161.620 at any time after withdrawing from covered employment and payment of 21
contributions under this subsection. No member shall make contributions as 22
provided for in this subsection if the member is at the same time making 23
contributions to another retirement system in Kentucky supported wholly or in part 24
by public funds. 25
(3)[(4)] Service credit in the Kentucky Employees Retirement System, the State Police 26
Retirement System, the Legislators' Retirement Plan, the County Employees 27 UNOFFICIAL COPY 22 RS BR 1173
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Retirement System, or the Judicial Retirement System may be used in meeting the 1
service requirements of subsection[subsections] (1)(a) to (c)[ and (2)] of this 2
section, provided the service is subsequent to July 1, 1956. 3
(4)[(5)] Upon death, disability, or service retirement, a member's accounts under all 4
state supported retirement systems shall be consolidated, as provided by this section 5
and by KRS 61.680, for the purpose of determining eligibility and amount of 6
benefits, which shall include medical benefits. Upon determination of benefits, each 7
system shall pay the applicable percentage of total benefits. The effective date of 8
retirement under this subsection shall be determined by each retirement system for 9
the portion of the payments that will be made. 10
(5)[(6)] No retirement annuity shall be effective until written application and option 11
election forms are filed with the retirement office in accordance with administrative 12
regulations of the board of trustees. A member may withdraw his or her retirement 13
application, postpone his or her effective retirement date, or change his or her 14
retirement option if these elections are made no later than the fifteenth day of the 15
month in which the member has made application for retirement. 16
(6)[(7)] The surviving spouse of an active contributing member, if named as 17
beneficiary of the member's account, may purchase retirement credit that the 18
member was eligible to purchase prior to the member's death. 19
Section 6. KRS 161.620 (Effective January 1, 2022) is amended to read as 20
follows: 21
(1) The retirement allowance, in the form of a life annuity with refundable balance, of a 22
member retiring for service shall be calculated as follows: 23
(a) For retirements effective July 1, 1998, and thereafter, except as otherwise 24
provided by this section, the annual allowance for each year of service shall be 25
two percent (2%) of the final average salary for service performed prior to 26
July 1, 1983, and two and one-half percent (2.5%) of the final average salary 27 UNOFFICIAL COPY 22 RS BR 1173
Page 29 of 79
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for service performed after July 1, 1983, for all nonuniversity members. 1
Except as otherwise provided by this section, the annual retirement allowance 2
for each year of service performed by members of the Teachers' Retirement 3
System who are university members shall be two percent (2%) of the final 4
average salary. Actuarial discounts due to age or service credit at retirement 5
may be applied as provided in this section; 6
(b) For individuals who become nonuniversity members of the Teachers' 7
Retirement System on or after July 1, 2002, and before July 1, 2008, who 8
upon retirement have earned less than ten (10) full years of service credit, the 9
retirement allowance shall be two percent (2%) of the member's final average 10
salary for each year of service. For individuals who become nonuniversity 11
members of the Teachers' Retirement System on or after July 1, 2002, and 12
before July 1, 2008, and who upon retirement have earned at least ten (10) full 13
years of service credit, the annual allowance for each year of service shall be 14
two and one-half percent (2.5%) of the member's final average salary; 15
(c) The board of trustees may approve for members who initially retire on or after 16
July 1, 2004, and who become nonuniversity members before July 1, 2008, a 17
retirement allowance of three percent (3%) of the member's final average 18
salary for each year or partial year of service credit earned in excess of thirty 19
(30) years. This three percent (3%) factor shall be in lieu of the two and one-20
half percent (2.5%) factor provided for in paragraph (b) of this subsection for 21
every year or fraction of a year of service in excess of thirty (30) years. Upon 22
approval of this three percent (3%) retirement factor, the board of trustees may 23
establish conditions of eligibility regarding the type of service credit that will 24
qualify for meeting the requirements of this subsection. This subsection is 25
optional with the board of trustees and shall not be subject to KRS 161.714; 26
(d) For individuals who become nonuniversity members of the Teachers' 27 UNOFFICIAL COPY 22 RS BR 1173
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Retirement System on or after July 1, 2008[, but prior to January 1, 2022], the 1
retirement allowance shall be: 2
1. a. One and seven-tenths percent (1.7%) of the member's final average 3
salary for each year of service if the member has earned ten (10) or 4
less years of service at retirement; 5
b. Two percent (2%) of the member's final average salary for each 6
year of service if the member has earned greater than ten (10) but 7
no more than twenty (20) years of service at retirement; 8
c. Two and three-tenths percent (2.3%) of the member's final average 9
salary for each year of service if the member has earned greater 10
than twenty (20) but no more than twenty-six (26) years of service 11
at retirement; or 12
d. Two and one-half percent (2.5%) of the member's final average 13
salary for each year of service if the member has earned greater 14
than twenty-six (26) but no more than thirty (30) years of service at 15
retirement; and 16
2. Three percent (3%) of the member's final average salary for each year or 17
partial year of service earned in excess of thirty (30) years of service at 18
retirement subject to the same terms and conditions as set forth in 19
paragraph (c) of this subsection; 20
(e) For individuals who become university members of the Teachers' Retirement 21
System on or after July 1, 2008[, but prior to January 1, 2022], the retirement 22
allowance shall be: 23
1. One and one-half percent (1.5%) of the member's final average salary for 24
each year of service if the member has earned ten (10) or less years of 25
service at retirement; 26
2. One and seven-tenths percent (1.7%) of the member's final average 27 UNOFFICIAL COPY 22 RS BR 1173
Page 31 of 79
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salary for each year of service if the member has earned greater than ten 1
(10) but no more than twenty (20) years of service at retirement; 2
3. One and eighty-five hundredths percent (1.85%) of the member's final 3
average salary for each year of service if the member has earned greater 4
than twenty (20) but less than twenty-seven (27) years of service at 5
retirement; or 6
4. Two percent (2%) of the member's final average salary for each year of 7
service if the member has earned twenty-seven (27) or more years of 8
service at retirement; 9
(f) [For individuals who become nonuniversity members of the Teachers' 10
Retirement System on or after January 1, 2022, the retirement allowance shall, 11
except as adjusted by the board pursuant to KRS 161.633, be the following 12
percentage of the member's final average salary for each year of service: 13
1. One and seven-tenths percent (1.7%), which shall be increased 14
incrementally each month the member's age at retirement is greater than 15
sixty (60) so that the incremental increase is four one-hundredths of one 16
percent (0.04%) for each complete additional year of age at retirement in 17
excess of sixty (60), not to exceed a value of one and nine-tenths percent 18
(1.9%) at age sixty-five (65) or greater; plus 19
2. a. One-quarter of one percent (0.25%), if the member has earned at 20
least twenty (20) but less than thirty (30) years of service at 21
retirement; or 22
b. One-half of one percent (0.50%), if the member has earned thirty 23
(30) or more years of service at retirement; 24
(g) For individuals who become university members of the Teachers' Retirement 25
System on or after January 1, 2022, the retirement allowance shall, except as 26
adjusted by the board pursuant to KRS 161.634, be the following percentage 27 UNOFFICIAL COPY 22 RS BR 1173
Page 32 of 79
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of the member's final average salary for each year of service: 1
1. Seven-tenths of one percent (0.7%), which shall be increased 2
incrementally each month the member's age at retirement is greater than 3
sixty (60) so that the incremental increase is four one-hundredths of one 4
percent (0.04%) for each complete additional year of age in excess of 5
sixty (60), not to exceed a value of nine-tenths of one percent (0.9%) at 6
age sixty-five (65) or greater; plus 7
2. a. One-quarter of one percent (0.25%), if the member has earned at 8
least twenty (20) but less than thirty (30) years of service at 9
retirement; or 10
b. One-half of one percent (0.50%), if the member has earned thirty 11
(30) or more years of service at retirement; and 12
(h)] The retirement allowance of a member at retirement, as measured on a life 13
annuity, shall not exceed the member's last yearly salary or the member's final 14
average salary, whichever is the greater amount. For purposes of this section, 15
"yearly salary" means the compensation earned by a member during the most 16
recent period of contributing service, either consecutive or nonconsecutive, 17
preceding the member's effective retirement date and shall be subject to the 18
provisions of KRS 161.220(9) and (10)[. This paragraph shall not apply to the 19
supplemental benefit component]. 20
(2) Effective July 1, 2002, and annually on July 1 thereafter, the retirement allowance 21
of each retired member and of each beneficiary of a retirement option shall be 22
increased in the amount of one and one-half percent (1.5%), provided the retired 23
member had been retired for at least the full twelve (12) months immediately 24
preceding the date that the increase is effective. In the event that the retired member 25
had been retired for less than the full twelve (12) months immediately preceding the 26
date that the increase is effective, then the increase shall be reduced on a pro rata 27 UNOFFICIAL COPY 22 RS BR 1173
Page 33 of 79
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basis by each month that the retired member had not been retired for the full twelve 1
(12) months immediately preceding the effective date of the increase[. This 2
subsection shall not apply to benefits from the supplemental benefit component, and 3
the board may adjust this value for individuals who become members on or after 4
January 1, 2022, as provided by KRS 161.633 or 161.634, as applicable]. 5
(3) Any member qualifying for retirement under a life annuity with refundable balance 6
shall be entitled to receive an annual allowance amounting to not less than four 7
hundred dollars ($400) effective July 1, 2002, and not less than four hundred forty 8
dollars ($440) effective July 1, 2003, multiplied by the service credit years of the 9
member. These minimums shall apply to the retired members receiving annuity 10
payments and to those members retiring on or subsequent to the effective dates 11
listed in this subsection, except the following: 12
(a) Individuals who become members of the Teachers' Retirement System on or 13
after July 1, 2008; or 14
(b) Members whose retirement allowance payment is reduced below the 15
minimum allowance as a result of its division in a qualified domestic relations 16
order or any other provision permitted under KRS 161.700. 17
(4) The minimum retirement allowance provided in this section shall apply in the case 18
of members retired or retiring under an option other than a life annuity with 19
refundable balance in the same proportion to the benefits of the member and his or 20
her beneficiary or beneficiaries as provided in the duly-adopted option tables at the 21
time of the member's retirement. 22
(5) Effective July 1, 2008, the monthly allowance of each retired member and each 23
recipient of a retirement option of the retired member may be increased in an 24
amount not to exceed three and one-half percent (3.5%) of the monthly allowance in 25
effect the previous month, provided the retired member had been retired for at least 26
the full twelve (12) months immediately preceding the date that the increase is 27 UNOFFICIAL COPY 22 RS BR 1173
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effective. In the event that the retired member had been retired for less than the full 1
twelve (12) months immediately preceding the date that the increase is effective, 2
then the increase shall be reduced on a pro rata basis by each month that the retired 3
member had not been retired for the full twelve (12) months immediately preceding 4
the effective date of the increase. The level of increase provided for in this 5
subsection shall be determined by the funding provided in the 2008-2010 biennium 6
budget appropriation. 7
(6) Effective July 1, 2009, the monthly allowance of each retired member and each 8
recipient of a retirement option of the retired member may be increased in an 9
amount not to exceed seven-tenths of one percent (0.7%) of the monthly allowance 10
in effect the previous month, provided the retired member had been retired for at 11
least the full twelve (12) months immediately preceding the date that the increase is 12
effective. In the event that the retired member had been retired for less than the full 13
twelve (12) months immediately preceding the date that the increase is effective, 14
then the increase shall be reduced on a pro rata basis by each month that the retired 15
member had not been retired for the full twelve (12) months immediately preceding 16
the effective date of the increase. The level of increase provided for in this 17
subsection shall be determined by the funding provided in the 2008-2010 biennium 18
budget appropriation. 19
(7) Effective July 1, 1990, monthly payments of two hundred dollars ($200) shall be 20
payable for the benefit of an adult child of a member retired for service when the 21
child's mental or physical condition is sufficient to cause dependency on the 22
member at the time of retirement. Eligibility for this payment shall continue for the 23
life of the child or until the time the mental or physical condition creating the 24
dependency no longer exists or the child marries. Benefits under this subsection 25
shall apply to legally adopted survivors provided the proceedings for the adoption 26
were initiated at least one (1) year prior to the death of the member. The board of 27 UNOFFICIAL COPY 22 RS BR 1173
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trustees shall be the sole judge of eligibility or dependency and may require formal 1
application or information relating thereto. 2
(8) Members of the Teachers' Retirement System shall be subject to the annuity income 3
limitations imposed by Section 415 of the Internal Revenue Service Code. 4
(9) Compensation in excess of the limitations imposed by Section 401(a)(17) of the 5
Internal Revenue Code shall not be used in determining a member's retirement 6
annuity. The limitation on compensation for eligible members shall not be less than 7
the amount which was allowed to be taken into account by the retirement system in 8
effect on July 1, 1993. For this purpose, an eligible member is an individual who 9
was a member of the retirement system before the first plan year beginning after 10
December 31, 1995. 11
Section 7. KRS 161.655 (Effective January 1, 2022) is amended to read as 12
follows: 13
(1) Effective July 1, 2000, the Teachers' Retirement System shall: 14
(a) Provide a life insurance benefit in a minimum amount of five thousand dollars 15
($5,000) for its members who are retired for service or disability[, except that 16
the minimum amount for an individual who becomes a member on or after 17
January 1, 2022, and retires for service or disability shall be ten thousand 18
dollars ($10,000)]. This life insurance benefit shall be payable upon the death 19
of a member retired for service or disability to the member's estate or to a 20
party designated by the member on a form prescribed by the retirement 21
system; and 22
(b) Provide a life insurance benefit in a minimum amount of two thousand dollars 23
($2,000) for its active contributing members[, except that the minimum 24
amount for an individual who becomes a member on or after January 1, 2022, 25
and is an active contributing member shall be five thousand dollars ($5,000)]. 26
This life insurance benefit shall be payable upon the death of an active 27 UNOFFICIAL COPY 22 RS BR 1173
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contributing member to the member's estate or to a party designated by the 1
member on a form prescribed by the retirement system. 2
(2) (a) The member may name one (1) primary and one (1) contingent beneficiary for 3
receipt of the life insurance benefit. To the extent permitted by the Internal 4
Revenue Code, a trust may be designated as beneficiary for receipt of the life 5
insurance benefit. 6
(b) Members may designate as beneficiaries only presently identifiable and 7
existing individuals, or trusts where otherwise permitted, without contingency 8
instructions, on forms prescribed by the retirement system. 9
(c) In the event that a member fails to designate a beneficiary, or all designated 10
beneficiaries predecease the member, the member's estate shall be deemed to 11
be the beneficiary, unless the member is married at the time of his or her 12
death, in which case the spouse shall be deemed the beneficiary. 13
(d) 1. Any beneficiary designation made by the member, including the estate 14
should the estate become the beneficiary by default, shall remain in 15
effect until changed by the member on forms prescribed by the 16
retirement system, except in the event of subsequent marriage or 17
divorce. 18
2. A valid marriage license shall terminate any previously designated 19
beneficiary, even that of a trust, and establish the spouse as beneficiary 20
unless, subsequent proof of the marriage, the member or retired member 21
redesignates someone other than the new spouse as the beneficiary. 22
3. An individual who is married prior to becoming an active member or a 23
retired member of the retirement system and remains married at the time 24
of becoming an active or retired member of the retirement system shall 25
have his or her spouse considered the primary beneficiary, unless the 26
member designates another beneficiary. 27 UNOFFICIAL COPY 22 RS BR 1173
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4. A final divorce decree shall terminate the beneficiary status of an ex-1
spouse unless, subsequent to divorce, the member redesignates the 2
former spouse as a beneficiary. A final divorce decree shall not 3
terminate the designation of a trust as beneficiary regardless of who is 4
designated as beneficiary of the trust. 5
(e) The Teachers' Retirement System shall not acknowledge a beneficiary 6
designation unless the life insurance beneficiary form is received by the 7
Teachers' Retirement System prior to the member's death, or the life insurance 8
beneficiary form has been deposited in the mail with a postmark date no later 9
than the date of the member's death. 10
(3) Application for payment of life insurance proceeds shall be made to the Teachers' 11
Retirement System together with acceptable evidence of death and eligibility. The 12
reciprocal provisions of KRS 61.680(2)(a) shall not apply to the coverage and 13
payment of proceeds by the life insurance benefit under this section. 14
(4) Suit or civil action shall not be required for the collection of the proceeds of the life 15
insurance benefit provided for by this section, but nothing in this section shall 16
prevent the maintenance of suit or civil action against the beneficiary or legal 17
representative receiving the proceeds of the life insurance benefit. 18
(5) Upon the death of a member of the Teachers' Retirement System, the life insurance 19
provided pursuant to subsection (1) of this section may be assigned by the 20
designated beneficiary to a bank or licensed funeral home. 21
Section 8. KRS 161.400 (Effective January 1, 2022) is amended to read as 22
follows: 23
(1) (a) The board of trustees shall designate as actuary a competent person who shall 24
be a fellow of the Conference of Consulting Actuaries or a member of the 25
American Academy of Actuaries. He or she shall be the technical adviser of 26
the board on matters regarding the operation of the funds of the system and 27 UNOFFICIAL COPY 22 RS BR 1173
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shall perform such other duties as are required in connection therewith. 1
(b) At least once in each five (5) year period, the actuary shall make an actuarial 2
investigation into the actuarial assumptions and funding methods used, 3
including but not limited to mortality, investment rate of return, and service 4
and compensation of the members and beneficiaries of the retirement system, 5
relative to the actuarial assumptions and funding methods previously adopted 6
by the board. The actuarial investigation shall include at a minimum a 7
summary of the changes in actuarial assumptions and funding methods 8
recommended in the investigation and the projected impact of the 9
recommended changes on funding levels, unfunded liabilities, and actuarially 10
recommended contribution rates for employers over a thirty (30) year period. 11
(c) At least annually the actuary shall make an actuarial valuation of the 12
retirement system. The valuation shall include: 13
1. A description of the actuarial assumptions used, and the assumptions 14
shall be reasonably related to the experience of the system and represent 15
the actuary's best estimate of anticipated experience; 16
2. A description of any funding methods utilized or required by state law in 17
the development of the actuarial valuation results; 18
3. A description of any changes in actuarial assumptions and methods from 19
the previous year's actuarial valuation; 20
4. The actuarially recommended contribution rate for employers for the 21
upcoming budget periods; 22
5. A thirty (30) year projection of the funding levels, unfunded liabilities, 23
and actuarially recommended contribution rates for employers based 24
upon the actuarial assumptions, funding methods, and experience of the 25
system as of the valuation date; and 26
6. A sensitivity analysis that evaluates the impact of changes in system 27 UNOFFICIAL COPY 22 RS BR 1173
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assumptions, including but not limited to the investment return 1
assumption, payroll growth assumption, and medical inflation rates, on 2
employer contribution rates, funding levels, and unfunded liabilities. 3
(d) On the basis of the results of the valuations, the board of trustees shall make 4
necessary changes in the retirement system within the provisions of law and 5
shall establish the contributions payable by employers and the state specified 6
in KRS 161.550[, including changes prescribed by KRS 161.633, 161.634, 7
161.635, and 161.636, as applicable]. 8
(e) For any change in actuarial assumptions, funding methods, retiree health 9
insurance premiums and subsidies, or any other decisions made by the board 10
that impact system liabilities and actuarially recommended contribution rates 11
for employers and that are not made in conjunction with the actuarial 12
investigation required by paragraph (b) of this subsection, an actuarial analysis 13
shall be completed showing the projected impact of the changes on funding 14
levels, unfunded liabilities, and actuarially recommended contribution rates 15
for employers over a thirty (30) year period. 16
(2) Actuarial factors and actuarial cost factor tables in use by the retirement system for 17
all purposes shall be determined by the actuary of the retirement system and 18
approved by the board of trustees by resolution and implemented without the 19
necessity of an administrative regulation. 20
(3) A copy of each five (5) year actuarial investigation, actuarial analysis, and valuation 21
required by subsection (1) of this section shall be forwarded electronically to the 22
Legislative Research Commission no later than ten (10) days after receipt by the 23
board, and the Legislative Research Commission shall distribute the information 24
received to the committee staff and co-chairs of any committee that has jurisdiction 25
over the Teachers' Retirement System. The actuarial valuation required by 26
subsection (1)(c) of this section shall be submitted no later than November 15 27 UNOFFICIAL COPY 22 RS BR 1173
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following the close of the fiscal year. 1
Section 9. KRS 161.420 (Effective January 1, 2022) is amended to read as 2
follows: 3
All of the assets of the retirement system are for the exclusive purpose of providing 4
benefits to members and annuitants and defraying reasonable expenses of administering 5
the system. The board of trustees shall be the trustee of all funds of the system and shall 6
have full power and responsibility for administering the funds. All the assets of the 7
retirement system shall be credited according to the purpose for which they are held to 8
one (1) of the following funds: 9
(1) The expense fund shall consist of the funds set aside from year to year by the board 10
of trustees to defray the expenses of the administration of the retirement system. 11
Each fiscal year an amount not greater than four percent (4%) of the dividends and 12
interest income earned from investments during the immediate past fiscal year shall 13
be set aside into the expense fund or expended for the administration of the 14
retirement system; 15
(2) (a) The teachers' savings fund shall consist of [: 16
1. ]the contributions paid by members of the retirement system into this 17
fund and regular interest assigned by the board of trustees from the 18
guarantee fund[; and 19
2. For individuals who become members of the Teachers' Retirement 20
System on or after January 1, 2022, who are participating in the 21
supplemental benefit component, the employer contributions paid into 22
the supplemental benefit component and regular interest on those 23
contributions as provided by KRS 161.635 and 161.636 that is assigned 24
by the board of trustees from the guarantee fund. 25
For individuals who become members on or after January 1, 2022, the system 26
shall account for funds in the teachers' savings fund attributable to the 27 UNOFFICIAL COPY 22 RS BR 1173
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nonuniversity members foundational benefit component, nonuniversity 1
members supplemental benefit component, university members foundational 2
benefit component, and university members supplemental benefit component]. 3
(b) A member may not borrow any amount of his or her accumulated account 4
balance in the teachers' savings fund, or any regular interest earned thereon. 5
(c) The accumulated contributions or accumulated account balance of a member 6
which are returned to him or her upon his or her withdrawal or paid to his or 7
her estate or designated beneficiary in the event of his or her death shall be 8
paid from the teachers' savings fund. 9
(d) Any accumulated account balance in the teachers' savings fund forfeited by a 10
failure of a teacher or his or her estate to claim these contributions shall be 11
transferred from this fund to the guarantee fund. 12
(e) [Except as provided by paragraph (f) of this subsection, ]The accumulated 13
account balance of a member in the teachers' savings fund shall be transferred 14
from this fund to the allowance reserve fund in the event of retirement by 15
reason of service or disability[. 16
(f) For an individual who becomes a member of the Teachers' Retirement System 17
on or after January 1, 2022, who is participating in the supplemental benefit 18
component who elects to annuitize his or her accumulated account balance in 19
the supplemental benefit component as prescribed by KRS 161.635(5)(a) or 20
(b) or 161.636(5)(a) or (b), the member's accumulated account balance in the 21
supplemental benefit component shall be transferred from this fund to the 22
allowance reserve fund]; 23
(3) The state accumulation fund shall consist of funds paid by employers and 24
appropriated by the state for the purpose of providing annuities and survivor 25
benefits, including any sums appropriated for meeting unfunded liabilities, together 26
with regular interest assigned by the board of trustees from the guarantee fund. At 27 UNOFFICIAL COPY 22 RS BR 1173
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the time of retirement or death of a member there shall be transferred from the state 1
accumulation fund to the allowance reserve fund an amount which together with the 2
sum transferred from the teachers' savings fund will be sufficient to provide the 3
member a retirement allowance and provide for benefits under KRS 161.520 and 4
161.525.[ There shall also be transferred from the state accumulation fund to the 5
teachers' savings fund, the amount needed to fund the mandatory employer 6
contributions required by KRS 161.635 and 161.636]; 7
(4) The allowance reserve fund shall be the fund from which shall be paid all retirement 8
allowances and benefits provided under KRS 161.520 and 161.525. In addition, 9
whenever a change in the status of a member results in an obligation on this fund, 10
there shall be transferred to this fund from the teachers' savings fund and the state 11
accumulation fund, the amounts as may be held in those funds for the account or 12
benefit of the member; 13
(5) (a) The medical insurance fund, which is an account established according to 26 14
U.S.C. sec. 401(h), shall consist of amounts accumulated for the purpose of 15
providing benefits as provided in KRS 161.675, including: 16
1. The member contributions required by KRS 161.540(1)(a)2. 17
and[,](b)2.[, (c)3., and (d)3.]; 18
2. The employer contribution required by KRS 161.550(1)(a)2., (b)2., 19
(c)2., [(d)3., and (e)3. ]and (3); 20
3. State appropriations as set forth in KRS 161.550(2), unless the 21
contributions are made to a trust fund under 26 U.S.C. sec. 115 22
established by the board for this purpose; and 23
4. Interest income from the investments of the fund from contributions 24
received by the fund under subparagraphs 1. to 3. of this paragraph, and 25
from income earned on those investments. 26
(b) All claims for benefits under KRS 161.675 shall be paid from this fund or 27 UNOFFICIAL COPY 22 RS BR 1173
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from any trust fund under 26 U.S.C. sec. 115 as established by the board for 1
this purpose. Any amounts deposited to the fund that are not required to meet 2
current costs shall be maintained as a reserve in the fund for these benefits. 3
The board shall take the necessary and appropriate steps, including 4
promulgating administrative regulations and procedures to maintain the status 5
of the medical insurance fund as an account subject to 26 U.S.C. sec. 401(h); 6
(6) The guarantee fund shall be maintained to facilitate the crediting of uniform interest 7
on the amounts of the other funds, except the expense fund, to finance operating 8
expenses directly related to investment management services, and to provide a 9
contingent fund out of which special requirements of any of the other funds may be 10
covered. All income, interest, and dividends derived from the authorized deposits 11
and investments shall be paid into the guarantee fund. Any funds received from 12
gifts and bequests, which the board is hereby authorized to accept and expend 13
without limitation in a manner either expressed by the donor or deemed to be in the 14
best interest of the membership, shall be credited to the guarantee fund. Any funds 15
transferred from the teachers' savings fund by reason of lack of claimant or because 16
of a surplus in any fund and any other moneys whose disposition is not otherwise 17
provided for, shall also be credited to the guarantee fund. The interest allowed by 18
the board of trustees to each of the other funds shall be paid to these funds from the 19
guarantee fund. Any deficit occurring in any fund that would not be automatically 20
covered shall be met by the payments from the guarantee fund to that fund; 21
(7) The school employee annuity fund shall consist of those funds voluntarily 22
contributed under the provisions of Section 403(b) of the Internal Revenue Code by 23
a member of the Teachers' Retirement System with accounts that existed on or after 24
July 1, 1996. The contributions shall not be picked up as provided in KRS 25
161.540(2). Separate member accounts shall be maintained for each member. The 26
board of trustees may promulgate administrative regulations pursuant to KRS 27 UNOFFICIAL COPY 22 RS BR 1173
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Chapter 13A to manage this program; 1
(8) The supplemental retirement benefit fund shall consist of those funds contributed by 2
the employer for the purpose of constituting a qualified government excess benefit 3
plan as described in Section 415 of the Internal Revenue Code for accounts that 4
existed on or after July 1, 1996. The board of trustees shall promulgate 5
administrative regulations pursuant to KRS Chapter 13A to administer this 6
program; and 7
(9) The life insurance benefit fund shall consist of amounts accumulated for the 8
purpose of providing benefits provided under KRS 161.655. The board of trustees 9
may allocate to this fund a percentage of the employer and state contributions as 10
provided under KRS 161.550. The allocation to this fund will be in an amount that 11
the actuary determines necessary to fund the obligation of providing the benefits 12
provided under KRS 161.655[; and 13
(10) The stabilization reserve account shall consist of amounts in two (2) separate 14
accounts: 15
(a) One (1) that includes employer contributions as provided by KRS 161.550(1)(d)1. 16
and 2. that exceeds the combined actuarially required employer contribution for the 17
foundational benefit component and the mandatory employer contribution to the 18
supplemental benefit component as provided by KRS 161.633 and 161.635 for 19
those individuals who become nonuniversity members on or after January 1, 2022; 20
and 21
(b) One (1) that includes employer contributions as provided by KRS 161.550(1)(e)1. 22
and 2. that exceeds the combined actuarially required employer contribution for the 23
foundational benefit component and the mandatory employer contribution to the 24
supplemental benefit component as provided by KRS 161.634 and 161.636 for 25
those individuals who become university members on or after January 1, 2022. 26
Notwithstanding any other statute to the contrary, funds in these accounts shall only 27 UNOFFICIAL COPY 22 RS BR 1173
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be used to pay off the unfunded liability of the pension and life insurance funds]. 1
Section 10. KRS 161.470 (Effective January 1, 2022) is amended to read as 2
follows: 3
(1) The membership of the retirement system shall consist of all new members, all 4
present teachers, and all persons participating under the retirement system as of 5
June 30, 1986, except as provided in Acts 1938 (1st Ex. Sess.), Ch. 1, paragraph 29. 6
The board of trustees of the Teachers' Retirement System shall be responsible for 7
final determination of membership eligibility and may direct employers to take 8
whatever action that may be necessary to correct any error relating to membership. 9
(2) Service credit shall be forfeited upon withdrawal. If a member again enters service 10
it shall be as a new member, except that any teacher who withdraws by claiming his 11
or her deposits may repay the system the amount withdrawn plus interest and 12
reestablish his or her service credit as provided in subsection (3) of this section. 13
(3) Effective July 1, 1988, and thereafter, an active contributing member of the 14
retirement system with contributing service equal to one (1) year may regain service 15
credit by depositing in the teachers' savings fund the amount withdrawn with 16
interest at the rate to be set by the board of trustees, and computed from the first of 17
the month of withdrawal and including the month of redeposit. 18
(4) Effective July 1, 1974, any active contributing member with at least two (2) years of 19
contributing service credit who declined membership as provided in Acts 1938 (1st 20
Ex. Sess.), Ch. 1, paragraph 29, may secure service credit for prior service, and for 21
any subsequent service prior to date of membership, by depositing in the teachers' 22
savings fund contributions for each year of subsequent service prior to date of 23
membership, with interest at the rate of eight percent (8%) compounded annually to 24
the date of deposit. 25
(5) Membership in the retirement system shall be terminated: 26
(a) By retirement for service; 27 UNOFFICIAL COPY 22 RS BR 1173
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(b) By death; 1
(c) By withdrawal of the member's accumulated account balance; 2
(d) When a member, having less than five (5) years of Kentucky service is absent 3
from service for more than three (3) consecutive years; or 4
(e) For persons whose membership begins on or after August 1, 2000, when a 5
member is convicted, in any state or federal court of competent jurisdiction, of 6
a felony related to his or her employment as provided in subparagraphs 1. and 7
2. of this paragraph. 8
1. Notwithstanding any provision of law to the contrary, a person whose 9
membership begins on or after August 1, 2000, who is convicted, in any 10
state or federal court of competent jurisdiction, of a felony related to his 11
or her employment shall forfeit rights and benefits earned under the 12
retirement system, except for the return of his or her accumulated 13
contributions and interest credited on those contributions. 14
2. The payment of retirement benefits ordered forfeited shall be stayed 15
pending any appeal of the conviction. If the conviction is reversed on 16
final judgment, no retirement benefits shall be forfeited. 17
Except for paragraph (e) of this subsection, upon termination of member accounts 18
under this subsection, funds in the account shall be transferred to the guarantee 19
fund. Inactive members may apply for refunds of these funds at any time. The 20
terminated service shall be reinstated, if not withdrawn by the member, in the event 21
that the member returns to active contributing service. 22
(6) In case of withdrawal from service prior to eligibility for retirement, the board of 23
trustees shall on request of the member return all of his or her accumulated account 24
balance, including any payments made by the member to the state accumulation 25
fund, but the member shall have no claim on any contributions made by the state or 26
employer with a view to his or her retirement[, except as provided by KRS 161.635 27 UNOFFICIAL COPY 22 RS BR 1173
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and 161.636,] or to contributions made to the medical insurance fund. A member 1
who is withdrawing from service prior to retirement eligibility shall be entitled to a 2
refund following sixty (60) days after his or her last day of employment. If the 3
member is eligible for an immediate service retirement allowance as provided in 4
KRS 161.600, no withdrawal and refund shall be permitted, unless the allowance 5
would prohibit the member from qualifying for Social Security benefits or the 6
member elects to withdraw part or all of his or her service for the purpose of 7
obtaining service credit in another retirement plan. Requests for refund of 8
contributions by the member must be filed on forms prescribed by the Teachers' 9
Retirement System and the employer shall be financially responsible for all 10
information that is certified on the prescribed form. A member may not withdraw 11
any part of his or her accumulated account balance in the retirement system except 12
as provided by this subsection. 13
(7) Except as provided in KRS 161.520 and 161.525, in case of death prior to 14
retirement, the board of trustees shall pay to the estate of the deceased member, 15
unless a beneficiary was otherwise applicably designated by the deceased member, 16
then to the beneficiary, all of his or her accumulated account balance, including any 17
payments made by the member to the state accumulation fund, but the estate or 18
beneficiary shall have no claim on any contributions made by the state or employer 19
with a view to the retirement of the member[, except as provided by KRS 161.635 20
and 161.636,] or to contributions made to the medical insurance fund. 21
(8) Any active contributing member of the Kentucky Employees Retirement System, 22
the County Employees Retirement System, the State Police Retirement System, or 23
the Judicial Retirement System may use service, under that retirement system for 24
the purpose of meeting the service requirement of subsections (3) and (4) of this 25
section. 26
Section 11. KRS 161.507 (Effective January 1, 2022) is amended to read as 27 UNOFFICIAL COPY 22 RS BR 1173
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follows: 1
(1) An active contributing member of the Teachers' Retirement System may receive 2
service credit for active service rendered in the uniformed services of the Armed 3
Forces of the United States, including the commissioned corps of the Public Health 4
Service, subject to the provisions of the Uniformed Services Employment and 5
Reemployment Rights Act of 1994 and the administrative regulations promulgated 6
by the board of trustees. Military service includes service in the uniformed services 7
that occurs before the employment of a member in a position covered by the 8
retirement system or where a member leaves covered employment without giving 9
advance written or verbal notice of performing duty in the uniformed services. 10
Service in the uniformed services also includes uniformed service that occurs after 11
employment in a position covered by the retirement system where the member has 12
given advance written or verbal notice of performing duty in the uniformed services 13
and the member returns directly from uniformed services to covered employment. 14
Military service may be credited only if discharge was honorable or was not 15
terminated upon the occurrence of any of the events listed in 38 U.S.C. sec. 4304. 16
Service shall be considered as Kentucky teaching service, except that service may 17
not be used for meeting the service requirements set forth in KRS 161.600(1)(a)[ or 18
(2)] or 161.661(1) unless the service occurred after the member gave written or 19
verbal notice of performing duty in the uniformed services and the member returned 20
directly from uniformed services to covered employment. A maximum of six (6) 21
years of military service may be credited, but in no case a greater number of years 22
than the actual years of contributing service in Kentucky. 23
(2) No credit shall be granted for military service which has been or will be used in 24
qualifying for annuity benefit payments from another retirement system financed 25
wholly or in part by public funds. 26
(3) A member having twenty (20) years or more of active duty in the military service, 27 UNOFFICIAL COPY 22 RS BR 1173
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and who is qualified for regular federal retirement benefits based on this military 1
service, may not receive credit for any military service in the Teachers' Retirement 2
System. This subsection shall apply to service presented for credit on July 1, 1975, 3
and after this date. 4
(4) (a) A member receiving retirement credit for active duty in the armed services of 5
the United States prior to employment in a position covered by the retirement 6
system or where the member leaves covered employment without giving 7
advance written or verbal notice of performing duty in the uniformed services 8
shall pay to the retirement system the full actuarial cost of the service credit 9
purchased as provided under KRS 161.220(22). These contributions shall not 10
be picked up, as described in KRS 161.540(2). In purchasing retirement credit 11
for active duty in the armed services, the latest years of service shall be 12
considered first in allowing credit toward retirement. The board of trustees 13
shall adopt a table of actuarial factors to be used in calculating the amount of 14
contribution required for crediting this service. 15
(b) If military service occurred after the member gave written or verbal notice of 16
performing duty in the uniformed services and the member returns directly 17
from uniformed services to covered employment, the member shall contribute 18
the regular member contribution required by KRS 161.540. The member may 19
make the payment of delayed contributions in a lump sum payment or in 20
installments not to exceed five (5) years beginning with the member's date of 21
reemployment. Interest at the rate of eight percent (8%) per annum shall be 22
charged for delayed contributions beginning with the member's date of 23
reemployment until paid[. Members participating in the supplemental benefit 24
component who make the regular member contribution required by this 25
paragraph, shall also receive the mandatory employer contributions in the 26
supplemental benefit component for the period of service purchased]. 27 UNOFFICIAL COPY 22 RS BR 1173
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(5) An active contributing member of the Teachers' Retirement System may receive 1
service credit for service in the military reserves of the United States or the National 2
Guard. The member may purchase one (1) month of service for each six (6) months 3
of service in the reserves or the National Guard. Notwithstanding any other statute, 4
regulation, or policy to the contrary, the system shall provide a member, upon 5
request, the estimated actuarial cost of the National Guard or military reserves 6
service purchase based upon the information available at the time of the request. 7
The member shall be entitled to enter into a contract with the system at the time of 8
the request to purchase the National Guard or military reserve service by paying to 9
the system the estimated actuarial cost, either by installments or in lump sum. The 10
member shall pay the full actuarial cost of this service in the military reserves or the 11
National Guard as provided in KRS 161.220(22). Service in the military reserves or 12
the National Guard shall be treated as service earned prior to participation in the 13
system and shall not be used for meeting the service requirements set forth in KRS 14
161.600(1)(a)[ or (2)] or 161.661(1). The payment shall not be picked up by the 15
employer, as described in KRS 161.540(2). 16
Section 12. KRS 161.520 (Effective January 1, 2022) is amended to read as 17
follows: 18
Upon the death of an active contributing member or upon the death of a member retired 19
for disability, except as provided in KRS 161.661(6), the survivors of the deceased 20
member in the following named order, may elect to receive a survivor's benefit payable as 21
follows: 22
(1) Where there is a surviving widow or widower who is named as the primary 23
beneficiary of the member's retirement account, the benefit shall be: 24
(a) One hundred eighty dollars ($180) per month with no restriction on other 25
income; 26
(b) Two hundred forty dollars ($240) per month when the surviving widow or 27 UNOFFICIAL COPY 22 RS BR 1173
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widower's total income from all sources does not exceed six thousand six 1
hundred dollars ($6,600) per year or five hundred fifty dollars ($550) per 2
month; or 3
(c) If the deceased member has a minimum of ten (10) years of service credit with 4
the Teachers' Retirement System, the surviving widow or widower may apply 5
for an annuity actuarially equivalent to the annuity that would have been paid 6
to the deceased member when eligibility conditions were met. Eligibility for 7
payments would begin at the time the age of the deceased member would have 8
met the requirements of KRS 161.600(1)[ or (2), as applicable]. In exercising 9
this right, the surviving widow or widower shall be entitled to receive an 10
annuity for life. This subsection applies to surviving spouses of members who 11
die on or after July 1, 1978. A surviving widow or widower of a member who 12
dies after July 1, 1978, shall be eligible for benefit payments provided under 13
paragraphs (a) and (b) of this subsection until they begin receiving payments 14
under this provision; 15
(2) (a) Where there are surviving unmarried children under age eighteen (18) or 16
under age nineteen (19) if a full-time student in high school, the benefit shall 17
be two hundred dollars ($200) per month in the case of one (1) child, three 18
hundred forty dollars ($340) per month in the case of two (2) children, four 19
hundred dollars ($400) per month in the case of three (3) children, and four 20
hundred forty dollars ($440) per month in the case of four (4) or more 21
children. Benefits under this subsection shall apply in addition to benefits 22
which may be payable under subsections (1) and (3) of this section. 23
(b) Notwithstanding any provision of law to the contrary, the surviving spouse 24
may elect to receive a lump-sum refund of the member's accumulated account 25
balance in lieu of the survivorship benefits payable under this subsection and 26
subsection (1) of this section only if the surviving spouse is designated as the 27 UNOFFICIAL COPY 22 RS BR 1173
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primary beneficiary and: 1
1. Is a biological or adoptive parent of all children eligible for a benefit 2
under this subsection and has not had his or her parental rights 3
terminated; or 4
2. Has been appointed as legal guardian of all of the children eligible under 5
paragraph (a) of this subsection. 6
(c) To elect a lump-sum refund of the member's accumulated account balance 7
under paragraph (b) of this subsection, the surviving spouse who is designated 8
as the primary beneficiary must sign a waiver on forms prescribed by the 9
retirement system of his or her rights and the member's children's rights to the 10
survivorship benefits payable under this subsection and subsection (1) of this 11
section. The surviving spouse shall not waive the survivorship benefits 12
available under this subsection or subsections (1) and (6) of this section if any 13
of the member's children have attained age eighteen (18) or older unless all of 14
those children consent in writing on forms prescribed by the retirement system 15
to waive their survivorship benefits available under this subsection; 16
(3) (a) Where the survivor is a child age eighteen (18) or older whose mental or 17
physical condition is sufficient to cause his or her dependency on the deceased 18
member at the time of the member's death, the benefit shall be two hundred 19
dollars ($200) per month, payable for the life of the child or until the time as 20
the mental or physical condition creating the dependency no longer exists or 21
the child marries. The mental or physical condition of the adult child shall be 22
revealed by a competent examination by a licensed physician and shall be 23
approved by a majority of a medical review committee as defined in KRS 24
161.661(14). Benefits under this subsection shall apply in addition to benefits 25
which may be payable under subsections (1) and (2) of this section. 26
(b) Notwithstanding any provision of law to the contrary, the surviving spouse 27 UNOFFICIAL COPY 22 RS BR 1173
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shall not elect to receive a lump-sum refund of the member's accumulated 1
account balance in lieu of the survivorship benefits payable under this 2
subsection and subsection (1) of this section unless: 3
1. The surviving spouse is designated as the primary beneficiary; 4
2. The surviving spouse has been appointed by the court as guardian, 5
conservator, or other fiduciary with sufficient general or specific 6
authority to waive the survivorship benefits available under this 7
subsection for any child or children age eighteen (18) or older who have 8
been adjudicated incompetent to make decisions on their own behalf by 9
a court of law; and 10
3. Any child or children age eighteen (18) or older who are mentally 11
competent to make decisions on their own behalf consent in writing on 12
forms prescribed by the retirement system to waive their survivorship 13
benefits available under this subsection. 14
(c) If eligible to elect a lump-sum refund of the member's accumulated account 15
balance, the surviving spouse shall sign a waiver on forms prescribed by the 16
retirement system of his or her rights and the member's children's rights to the 17
survivorship benefits payable under this subsection and subsections (1) and 18
(2) of this section; 19
(4) Where the sole eligible survivors are dependent parents aged sixty-five (65) or over, 20
the benefit shall be two hundred dollars ($200) per month for one (1) parent or two 21
hundred ninety dollars ($290) per month for two (2) parents. Dependency of a 22
parent shall be established as of the date of the death of the member; 23
(5) Where the sole eligible survivor is a dependent brother or sister, the benefit shall be 24
one hundred sixty five dollars ($165) per month. In order to qualify, the brother or 25
sister must have been a resident of the deceased member's household for at least one 26
(1) full year prior to the member's death or must have been receiving care in a 27 UNOFFICIAL COPY 22 RS BR 1173
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hospital, nursing home, or other institution at the member's expense for same 1
period; 2
(6) The benefit to a child as defined in subsection (2) of this section shall terminate 3
upon the attainment of age eighteen (18) or upon reaching age nineteen (19), if a 4
full-time student in high school, or upon marriage, except that benefits shall 5
continue until the attainment of age twenty-three (23) for an unmarried child who is 6
a full-time student in a recognized educational program beyond the high school 7
level. The benefit to a dependent parent or dependent brother or sister or dependent 8
child age eighteen (18) or older shall terminate upon marriage, or upon termination 9
of the condition creating the dependency; 10
(7) The board of trustees shall be the sole judge of eligibility or dependency of any 11
beneficiary, and may require formal application or information relating to eligibility 12
or dependency, including proof of annual income satisfactory to the board. The 13
board of trustees may subpoena records and individuals whenever it deems this 14
action necessary; 15
(8) No payment of benefits shall be made unless the board of trustees authorizes the 16
payment. The board shall promulgate administrative regulations for the 17
administration of the provisions in this section and in every case the decision of the 18
board of trustees shall be final as to eligibility, dependency, or disability, and the 19
amount of benefits payable; 20
(9) In the event that there are no eligible survivors as defined in subsections (1) to (5) 21
of this section, or in the event that the surviving spouse elects not to receive 22
survivorship benefits on his or her own behalf or on behalf of any of the member's 23
children as permitted under subsections (2) and (3) of this section, the board of 24
trustees shall pay to the estate or the designated beneficiaries of the deceased 25
member a refund of his or her accumulated account balance as provided in KRS 26
161.470(7). If the benefits paid or payable under subsections (1) to (5) of this 27 UNOFFICIAL COPY 22 RS BR 1173
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section and KRS 161.661 shall amount to a sum less than the member's 1
accumulated account balance at the time of death, the board of trustees shall pay to 2
the estate or designated beneficiaries of the deceased member the balance of the 3
accumulated account balance; 4
(10) Any person who is receiving benefits and becomes disqualified from receiving 5
those benefits under this section shall immediately notify the Teachers' Retirement 6
System of this disqualification in writing and shall return all benefits paid after the 7
date of disqualification. Failure to comply with these provisions shall create an 8
indebtedness of that person to the Teachers' Retirement System. Interest at the rate 9
of eight percent (8%) per annum shall be charged if the debt is not repaid within 10
sixty (60) days after the date of disqualification. Failure to repay this debt creates a 11
lien in favor of the Teachers' Retirement System upon all property of the person 12
who improperly receives benefits and does not repay those benefits; and 13
(11) Benefits under subsections (2) and (3) of this section shall apply to a child who is a 14
legally adopted survivor at the time of the death of the member. This provision shall 15
be retroactive to include a child who was born after January 1, 1990, and is a legally 16
adopted survivor of a member whose death occurred prior to July 15, 2008. 17
Section 13. KRS 161.548 (Effective January 1, 2022) is amended to read as 18
follows: 19
A member of the Teachers' Retirement System who is in an active contributing status 20
with the system, and who was formerly employed in a regional community service 21
program for mental health and individuals with an intellectual disability, organized and 22
operated under the provisions of KRS 210.370 to 210.480, which does not participate in a 23
state-administered retirement system, may obtain credit for the period of his or her service 24
in the regional community program for mental health and individuals with an intellectual 25
disability by paying to the Teachers' Retirement System the full actuarial cost of the 26
service credit purchased, as provided in KRS 161.220(22). The service credit purchased 27 UNOFFICIAL COPY 22 RS BR 1173
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may not be used for meeting the service requirements set forth in KRS 161.600(1)(a)[ or 1
(2)] or 161.661(1). The payment shall not be picked up, as described in KRS 161.540(2), 2
and the entire payment shall be placed in the teachers' savings fund. 3
Section 14. KRS 161.549 (Effective January 1, 2022) is amended to read as 4
follows: 5
A member of the Teachers' Retirement System who is in an active contributing status 6
with the system, and who was formerly employed by a Federal Head Start agency, 7
operated under 42 U.S.C. secs. 9831 et seq., which does not participate in a state-8
administered retirement system, may obtain credit for the period of the member's service 9
in the Head Start program by purchasing this service credit under the same conditions that 10
out-of-state service credit may be purchased under KRS 161.515. The service credit 11
purchased may not be used for meeting the service requirements set forth in KRS 12
161.600(1)(a)[ or (2)] or 161.661(1). Payment for the service credit purchased may be 13
made in installments in lieu of a lump-sum payment. The payment shall not be picked up, 14
as described in KRS 161.540(2), and the entire payment shall be placed in the teachers' 15
savings fund. 16
Section 15. KRS 161.605 (Effective January 1, 2022) is amended to read as 17
follows: 18
Any member retired by reason of service may return to work in a position covered by the 19
Kentucky Teachers' Retirement System and continue to receive his or her retirement 20
allowance under the following conditions: 21
(1) Any member who is retired with thirty (30) or more years of service may return to 22
work in a full-time or a part-time position, or in a position providing substitute 23
teaching service, covered by the Teachers' Retirement System and earn up to a 24
maximum of seventy-five percent (75%) of the member's last annual compensation 25
measured on a daily rate to be determined by the board of trustees. For purposes of 26
determining whether the salary of a member returning to work is seventy-five 27 UNOFFICIAL COPY 22 RS BR 1173
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percent (75%) or less of the member's last annual compensation, all remuneration 1
paid and benefits provided to the member, on an actual dollar or fair market value 2
basis as determined by the retirement system, excluding employer-provided medical 3
insurance required under subsection (5) of this section, shall be considered. 4
Members who were retired on or before June 30, 2002, shall be entitled to return to 5
work under the provisions of this section as if they had retired with thirty (30) years 6
of service. Nonqualified service credit purchased under the provisions of KRS 7
161.5465 or elsewhere with any state-administered retirement system shall not be 8
used to meet the thirty (30) year requirement set forth in this subsection. Out-of 9
state teaching service provided in public schools for kindergarten through grade 10
twelve (12) may count toward the thirty (30) year requirement set forth in this 11
subsection even if it is not purchased as service credit, if the member obtains from 12
his or her out-of-state employer certification of this service on forms prescribed by 13
the retirement system; 14
(2) Any member who is retired with less than thirty (30) years of service after June 30, 15
2002, may return to work in a full-time or part-time position, or in a position 16
providing substitute teaching service, covered by the Teachers' Retirement System 17
and earn up to a maximum of sixty-five percent (65%) of the member's last annual 18
compensation measured on a daily rate to be determined by the board of trustees. 19
For purposes of determining whether the salary of a member returning to work is 20
sixty-five percent (65%) or less of the member's last annual compensation, all 21
remuneration paid and benefits provided to the member, on an actual dollar or fair 22
market value basis as determined by the retirement system, excluding employer-23
provided medical insurance required under subsection (5) of this section, shall be 24
considered; 25
(3) Reemployment of a retired member under subsection (1) or (2) of this section in a 26
full-time teaching or nonteaching position in a local school district shall be 27 UNOFFICIAL COPY 22 RS BR 1173
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permitted only if the employer certifies to the Kentucky Teachers' Retirement 1
System that there are no other qualified applicants available to fill the teaching or 2
nonteaching position. The employer may use any source considered reliable, 3
including but not limited to data provided by the Education Professional Standards 4
Board and the Department of Education, to determine whether other qualified 5
applicants are available to fill the teaching or nonteaching position. The Kentucky 6
Board of Education shall promulgate administrative regulations to establish 7
procedures to determine whether other qualified applicants are available to fill a 8
teaching or nonteaching position and, if not, for filling the position with a retired 9
member who will then be permitted to return to work in that position under 10
subsection (1) or (2) of this section. The administrative regulations shall ensure that 11
a retired member shall not be hired in a teaching or nonteaching position by a local 12
school district until the superintendent of the school district assures the Kentucky 13
Teachers' Retirement System that every reasonable effort has been made to recruit 14
other qualified applicants for the position on an annual basis; 15
(4) Under this section, an employer may employ full-time a number of retired members 16
not to exceed three percent (3%) of the membership actively employed full-time by 17
that employer. The board of trustees may reduce this three percent (3%) cap upon 18
recommendation of the retirement system's actuary if a reduction is necessary to 19
maintain the actuarial soundness of the retirement system. The board of trustees 20
may increase the three percent (3%) cap upon a determination that an increase is 21
warranted to help address a shortage in the number of available teachers and upon 22
the determination of the retirement system's actuary that the proposed cap increase 23
allows the actuarial soundness of the retirement system to be maintained. For 24
purposes of this subsection, "full-time" means the same as defined by KRS 25
161.220(21). A local school district may exceed the quota established by this 26
subsection by making an annual written request to the Kentucky Department of 27 UNOFFICIAL COPY 22 RS BR 1173
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Education which the department may approve on a year-by-year basis if the 1
statewide quota has not been met. A district's written request to exceed its quota 2
shall be submitted no sooner than two (2) weeks after the start of the school year; 3
(5) (a) Except as provided by subsection (10) of this section, a member returning to 4
work in a full-time or part-time position, or in a position providing substitute 5
teaching service, under subsection (1) or (2) of this section shall contribute to 6
an account with the retirement system that shall be administered 7
independently from and with no reciprocal impact with the member's original 8
retirement account, or any other account from which the member is eligible to 9
draw a retirement allowance. 10
(b) Except as provided by subsection (10) of this section, a member returning to 11
work under subsection (1) or (2) of this section shall make contributions to the 12
retirement system at the rate provided under KRS 161.540. The new account 13
shall independently meet all vesting requirements as well as all other 14
conditions set forth in KRS 161.600(1)[ or (2), as applicable,] before any 15
retirement allowance is payable from this account. The retirement allowance 16
accruing under this new account shall be calculated pursuant to KRS 161.620. 17
This new account shall not entitle the member to a duplication of the benefits 18
offered under KRS 161.620(7) or 161.675, nor shall this new account provide 19
the benefits offered by KRS 161.520, 161.525, 161.620(3), 161.655, 161.661, 20
or 161.663. 21
(c) A member returning to work under subsection (1) or (2) of this section shall 22
waive his or her medical insurance with the Teachers' Retirement System 23
during the period of reemployment and shall receive the medical insurance 24
coverage that is generally provided by the member's active employer to the 25
other members of the retirement system that the active employer employs. If 26
medical insurance coverage is not available from the employer, the Kentucky 27 UNOFFICIAL COPY 22 RS BR 1173
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Teachers' Retirement System may provide coverage for the member. 1
(d) A member returning to work under subsection (1) or (2) of this section shall 2
not be eligible to purchase service credit for any service provided after the 3
member's effective date of retirement but prior to the date that the member 4
returns to work. A member returning to work under subsection (1) or (2) of 5
this section shall not be eligible to purchase service credit that the member 6
would have otherwise been eligible to purchase prior to the member's initial 7
retirement. 8
(e) A member who returns to work under subsection (1) or (2) of this section, or 9
in the event of the death of the member, the member's estate or applicably 10
designated beneficiary, shall be entitled, within ninety (90) days of the posting 11
of the annual report submitted by the employer, to a refund of contributions as 12
permitted and limited by KRS 161.470; 13
(6) The board of trustees may annually, on July 1, adjust the current daily rate of a 14
member's last annual compensation, for each full twelve (12) month period that has 15
elapsed subsequent to the member earning his or her last annual compensation, by 16
the percentage increase in the annual average of the consumer price index for all 17
urban consumers for the calendar year preceding the adjustment as published by the 18
Federal Bureau of Labor Statistics, not to exceed five percent (5%) annually. Each 19
annual adjustment shall become part of the member's daily rate base. Failure to 20
comply with the salary limitations set forth in subsections (1) and (2) of this section 21
as may be adjusted by this subsection shall result in a reduction of the member's 22
retirement allowance or any other benefit to which the member would otherwise be 23
entitled on a dollar-for-dollar basis for each dollar that the member exceeds these 24
salary limitations, and the member shall be refunded his or her retirement 25
contributions made on the compensation that exceeds these salary limitations. 26
Notwithstanding any other provision of law to the contrary, a member retiring from 27 UNOFFICIAL COPY 22 RS BR 1173
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a local school district who returns to work for a local school district under 1
subsection (1) or (2) of this section shall be entitled, without any reduction to his or 2
her retirement allowance or any other retirement benefit, to earn a minimum amount 3
equal to one hundred seventy dollars ($170) per day; 4
(7) (a) A retired member returning to work under subsection (1) or (2) of this section 5
shall have separated from service for a period of at least one (1) year if 6
returning to work for the same employer on a full-time basis, and at least three 7
(3) months if returning to work for a different employer on a full-time basis. A 8
retired member returning to work under subsection (1) or (2) of this section on 9
a part-time basis shall have separated from service for a period of at least three 10
(3) months before returning to work for any employer. 11
(b) As an alternative to the separation-from-service requirements in paragraph (a) 12
of this subsection, a retired member who is returning to work for the same 13
employer in a full-time position under subsections (1) and (2) of this section 14
may elect a separation-from-service of not less than two (2) months followed 15
by a forfeiture of the retired member's retirement allowance on a month-to-16
month basis for each month that the member has separated from service for 17
less than twelve (12) full months. A retired member returning to work for the 18
same employer in a part-time position, or for a different employer in a full-19
time position, may elect an alternative separation-from-service requirement of 20
at least two (2) months followed by a forfeiture of the member's retirement 21
allowance for one (1) month. During the period that the member forfeits his or 22
her retirement allowance and thereafter, member and employer contributions 23
shall be made to the retirement system as a result of employment in any 24
position subject to membership in the retirement system. The member shall 25
contribute to an account with the retirement system subject to the conditions 26
set forth in subsection (5) of this section. 27 UNOFFICIAL COPY 22 RS BR 1173
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(c) A retired member who is returning to work for an employer that has 1
employees who participate in the Teachers' Retirement System shall comply 2
with the separation-from-service requirements in this subsection before 3
performing any service for the employer, regardless of whether the retired 4
member is providing service in a position covered by the Teachers' Retirement 5
System. 6
(d) The starting date for any separation from service required under this 7
subsection shall be the effective date of the member's retirement. 8
(e) The separation-from-service requirements of this subsection are not met if 9
there is a prearranged agreement between the member and an employer that 10
has employees who participate in the Teachers' Retirement System prior to 11
retirement for the member to work for the employer after retirement. 12
(f) The Teachers' Retirement System may require the member and the employer 13
for which the member is returning to work to certify in writing on a form 14
prescribed by the Teachers' Retirement System that no prearranged agreement 15
was or will be entered into between the member and employer prior to 16
retirement for the member to work for the employer after retirement. 17
(g) Failure to comply with the separation-from-service requirements in this 18
subsection voids a member's retirement and the member shall be required to 19
return all the retirement benefits he or she received, with interest, for the 20
period of time that the member returned to work without a sufficient 21
separation from service; 22
(8) (a) Effective July 1, 2004, local school districts may employ retired members in 23
full-time or part-time teaching or administrative positions without limitation 24
on the compensation of the retired members that is otherwise required by 25
subsections (1) and (2) of this section. Under provisions of this subsection, a 26
local school district may only employ retired members to fill critical shortage 27 UNOFFICIAL COPY 22 RS BR 1173
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positions for which there are no other qualified applicants as determined by 1
the local superintendent. The number of retired members that a local school 2
district may employ under this subsection shall be no more than two (2) 3
members per local school district or one percent (1%) of the total active 4
members employed by the local school district on a full-time basis as defined 5
under KRS 161.220(21), whichever number is greater. Retired members 6
returning to work under this subsection shall be subject to the separation-7
from-service requirements set forth in subsection (7) of this section. Retired 8
members returning to work under this subsection shall waive their medical 9
insurance coverage with the retirement system during their period of 10
reemployment and receive medical insurance coverage that is offered to other 11
full-time members employed by the local school district. Retired members 12
returning to work under this subsection shall contribute to an account subject 13
to the conditions set forth in subsection (5) of this section. Retired members 14
returning to work under this subsection shall make contributions to the 15
retirement system at the rate provided under KRS 161.540. The employer 16
shall make contributions at the rate provided under KRS 161.550. Local 17
school districts shall make annual payments to the retirement system on the 18
compensation paid to the reemployed retirees at the rates determined by the 19
retirement system's actuary that reflect any accrued liability resulting from the 20
reemployment of these members. 21
(b) The Department of Education may employ retired members in full-time or 22
part-time teaching or nonteaching positions without the limitations on 23
compensation otherwise required by subsections (1) and (2) of this section to 24
fill critical shortage areas in the schools it operates, including the Kentucky 25
School for the Blind, the Kentucky School for the Deaf, and the Kentucky 26
Virtual High School, and to serve on audit teams. The department shall be 27 UNOFFICIAL COPY 22 RS BR 1173
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subject to the same requirements as local school districts as provided in 1
paragraph (a) of this subsection, except the Teachers' Retirement System shall 2
determine the maximum number of employees that may be employed under 3
this paragraph; 4
(9) The return-to-work limitations set forth in this section shall apply to retired 5
members who are returning to work in the same position from which they retired, or 6
a position substantially similar to the one from which they retired, or a position 7
described in KRS 161.046 or any position listed in KRS 161.220(4) which requires 8
membership in the retirement system. Positions which generally require certification 9
or graduation from a four (4) year college or university as a condition of 10
employment which are created, or changed to remove the position from coverage 11
under KRS 161.220(4) are also subject to the return to work limitations set forth in 12
this section. The board of trustees shall determine whether employment in a 13
nonteaching position is subject to this subsection; 14
(10) [(a) Notwithstanding the provisions of this section, individuals who become 15
members on or after January 1, 2022, who subsequently retire and begin 16
drawing a monthly lifetime retirement allowance from the Teachers' 17
Retirement System, who following retirement are reemployed with an 18
employer participating in the Teachers' Retirement System, shall not be 19
eligible to contribute to or earn benefits in a second retirement account in the 20
Teachers' Retirement System during the period of reemployment. 21
(b) ]The provisions of subsections (1) to (8) of this section are not subject to KRS 22
161.714; 23
(11) Any member retired by reason of service may waive his or her annuity and return to 24
full-time employment in a position covered by the Teachers' Retirement System 25
under the following conditions: 26
(a) The member shall receive no annuity payments while employed in a covered 27 UNOFFICIAL COPY 22 RS BR 1173
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position, shall waive his or her medical insurance coverage with the Teachers' 1
Retirement System during the period of reemployment, and shall receive the 2
medical insurance coverage that is generally offered by the member's active 3
employer to the other members of the retirement system employed by the 4
active employer. The member's estate or, if there is a beneficiary applicably 5
designated by the member, then the beneficiary, shall continue to be eligible 6
for life insurance benefits as provided in KRS 161.655. Service subsequent to 7
retirement shall not be used to improve an annuity, except as provided in 8
paragraphs (b) and (c) of this subsection; 9
(b) Any member who waives regular annuity benefits and returns to teaching or 10
covered employment shall be entitled to make contributions on the salaries 11
received for this service and have his or her retirement annuity recalculated as 12
provided in the regular retirement formula in KRS 161.620(1), less any 13
applicable actuarial discount applied to the original retirement allowance due 14
to the election of a joint and last survivor option. Retirement option and 15
beneficiary designation on original retirement shall not be altered by 16
postretirement employment, and dependents and spouses of the members shall 17
not become eligible for benefits under KRS 161.520, 161.525, or 161.661 18
because of postretirement employment; 19
(c) When a member returns to full-time teaching or covered employment as 20
provided in subsection (b) of this section, the employer is required to withhold 21
and remit regular retirement contributions. The member must be employed 22
full-time for at least one (1) consecutive contract year to be eligible to 23
improve an annuity. The member shall be returned to the annuity rolls on July 24
1 following completion of the contract year or on the first day of the month 25
following the month of termination of service if full-time employment 26
exceeds one (1) consecutive contract year. A member shall not be returned to 27 UNOFFICIAL COPY 22 RS BR 1173
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the annuity rolls until after he or she has filed a retirement application in 1
compliance with KRS 161.600(5)[(6)]. Any discounts applied at the time of 2
the original retirement due to service or age may be reduced or eliminated due 3
to additional employment if full-time employment is for one (1) consecutive 4
contract year or longer; and 5
(d) A member retired by reason of service who has been employed the equivalent 6
of twenty-five (25) days or more during a school year under KRS 161.605 7
may waive the member's retirement annuity and return to regular employment 8
covered by the Teachers' Retirement System during that school year a 9
maximum of one (1) time during any five (5) year period, beginning with that 10
school year; 11
(12) Retired members may be employed in a part-time teaching capacity by an agency 12
described in KRS 161.220(4)(b) or (n), not to exceed the equivalent of twelve (12) 13
teaching hours in any one (1) fiscal year. Retired members may be employed for a 14
period not to exceed the equivalent of one hundred (100) days in any one (1) fiscal 15
year in a part-time administrative or nonteaching capacity by an agency described in 16
KRS 161.220(4)(b) or (n) in a position that would otherwise be covered by the 17
retirement system. Except as otherwise provided by this subsection, the return to 18
work provisions set forth in subsections (1) to (8) of this section shall not apply to 19
retired members who return to work solely for an agency described in KRS 20
161.220(4)(b) or (n). Calculation of the number of days and teaching hours for part-21
time teaching, substitute teaching, or part-time employment in a nonteaching 22
capacity under this section shall not exceed the ratio between a school year and the 23
actual months of retirement for the member during that school year. The board of 24
trustees by administrative regulation may establish fractional equivalents of a day of 25
teaching service. Any member who exceeds the twelve (12) hour or one hundred 26
(100) day limitations of this subsection shall be subject to having his or her 27 UNOFFICIAL COPY 22 RS BR 1173
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retirement voided and be required to return all retirement allowances and other 1
benefits paid to the member or on the member's behalf since the effective date of 2
retirement. In lieu of voiding a member's retirement, the system may reduce the 3
member's retirement allowance or any other benefit to which the member would 4
otherwise be entitled on a dollar-for-dollar basis for each dollar of compensation 5
that the member earns in employment exceeding twelve (12) hours, one hundred 6
(100) days, or any apportionment of the two (2) combined. Retired members 7
returning to work for an employer described in KRS 161.220(4)(b) or (n) shall 8
comply with the separation-from-service requirements of subsection (7) of this 9
section; 10
(13) When a retired member returns to employment in a part-time teaching capacity or in 11
a nonteaching capacity as provided in subsection (12) of this section, the employer 12
shall contribute annually to the retirement system on the compensation paid to the 13
retired member at rates determined by the retirement system actuary that reflect 14
accrued liability for retired members who return to work under subsection (12) of 15
this section; and 16
(14) For retired members who return to work during any one (1) fiscal year in both a 17
position described in KRS 161.220(4)(b) or (n) and in a position described under 18
another provision under KRS 161.220(4), and for retired members who return to 19
work in a position described under KRS 161.220(4)(b) or (n) in both a teaching and 20
an administrative or nonteaching capacity, the board of trustees shall adopt a 21
methodology for a pro rata apportionment of days and hours that the retired member 22
may work in each position. 23
Section 16. KRS 161.612 (Effective January 1, 2022) is amended to read as 24
follows: 25
Effective July 1, 2002, any individual occupying a position on a part-time basis that 26
requires certification or graduation from a four (4) year college or university as a 27 UNOFFICIAL COPY 22 RS BR 1173
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condition of employment and any individual providing part-time or substitute teaching 1
services that are the same or similar to those teaching services provided by certified, full-2
time teachers shall be a member of the Teachers' Retirement System, according to the 3
conditions and only to the extent set forth in this section, if the individual is employed by 4
one (1) of the public boards, institutions, or agencies set forth in KRS 161.220, excluding 5
those public boards, institutions, and agencies described in KRS 161.220(4)(b) and (n). 6
Members providing part-time and substitute services shall participate in the retirement 7
system as follows: 8
(1) Members providing part-time and substitute services shall accrue service credit as 9
provided under KRS 161.500 and be entitled to a retirement allowance upon 10
meeting the service retirement conditions of KRS 161.600. The board of trustees 11
shall adopt a methodology for accrediting service credit to these members on a pro 12
rata basis. The methodology adopted by the board of trustees may be amended as 13
necessary to ensure its actuarial soundness. The retirement allowance for members 14
providing part-time and substitute services shall be calculated pursuant to KRS 15
161.620[ and 161.635 or 161.636, as applicable], except that the provisions of KRS 16
161.620(3) shall not apply. Members providing part-time and substitute services 17
who meet the service retirement conditions of KRS 161.600 may also be eligible to 18
participate as approved by the board of trustees in the medical insurance program 19
provided by the retirement system under KRS 161.675. Members providing part-20
time and substitute services shall make contributions to the Teachers' Retirement 21
System at the rate provided under KRS 161.540. A member who provides part-time 22
or substitute services, or in the event of the death of the member, the member's 23
estate or applicably designated beneficiary, will be entitled, within ninety (90) days 24
of the posting of the annual report submitted by the member's employer, to a refund 25
of contributions as permitted and limited by KRS 161.470; 26
(2) (a) 1. The board of trustees shall adopt eligibility conditions under which 27 UNOFFICIAL COPY 22 RS BR 1173
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members providing part-time and substitute services may participate in 1
the benefits provided under KRS 161.520, 161.655, 161.661, and 2
161.663. 3
2. For all disability retirement applications filed with the Teachers' 4
Retirement System on or after July 1, 2021, disability retirement 5
payments and any other recurring payments payable by any other state-6
administered retirement system to members providing part-time or 7
substitute services shall be applied to reduce, on a dollar-for-dollar 8
basis, the minimum monthly disability retirement allowance of five 9
hundred dollars ($500) provided for under KRS 161.661(6). 10
3. Effective July 1, 2021, members providing part-time or substitute 11
services shall not be eligible to apply for a disability retirement 12
allowance if they are eligible for a service retirement allowance that is 13
not subject to an actuarial reduction required under KRS 161.600(1)(b) 14
or (d). 15
(b) The board of trustees may permit members providing part-time or substitute 16
services to participate in other benefits offered by the retirement system by 17
promulgating administrative regulations that establish eligibility conditions 18
for participation in these benefits. All eligibility conditions adopted by the 19
board of trustees pursuant to this subsection may be amended as necessary to 20
ensure their actuarial soundness; 21
(3) In addition to the pro rata methodology adopted by the board of trustees under 22
subsection (1) of this section, members providing part-time and substitute services 23
shall be subject to all limitations and conditions regarding the accrual, retention, 24
accreditation, and use of service credit that apply to members providing full-time 25
services. In addition to the eligibility conditions set forth by the board of trustees 26
under subsection (2) of this section, members providing part-time and substitute 27 UNOFFICIAL COPY 22 RS BR 1173
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services shall be subject to all limitations and conditions regarding both the 1
eligibility to participate and the extent of participation in any benefit offered under 2
KRS 161.220 to 161.716 that apply to members providing full-time services; 3
(4) Notwithstanding any other provisions of this section to the contrary, instructional 4
assistants who provide teaching services in the local school districts on a full-time 5
basis in positions covered by the County Employees Retirement System who are 6
used as substitute teachers on an emergency basis for five (5) days or less during 7
any one (1) fiscal year shall not be considered members of the Teachers' Retirement 8
System during that period in which they are serving as substitute teachers for five 9
(5) days or less; 10
(5) The board of trustees may adopt a pro rata methodology to determine the annual 11
compensation of members providing part-time and substitute services in order to 12
determine benefits provided under KRS 161.661 and 161.663. Members providing 13
part-time and substitute services who had retirement contributions posted to their 14
accounts during the previous fiscal year and who have not had those contributions 15
refunded to them are eligible to vote for the board of trustees; 16
(6) The board of trustees of the Teachers' Retirement System shall be responsible for 17
final determination of membership eligibility and may direct employers to take 18
whatever action that may be necessary to correct any error relating to membership; 19
and 20
(7) The provisions of this section are not subject to KRS 161.714. 21
Section 17. KRS 161.630 (Effective January 1, 2022) is amended to read as 22
follows: 23
(1) (a) A member, upon retirement, shall receive a retirement allowance in the form 24
of a life annuity, with refundable balance, as provided in KRS 161.620, unless 25
an election is made before the effective date of retirement to receive 26
actuarially equivalent benefits under options which the board of trustees 27 UNOFFICIAL COPY 22 RS BR 1173
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approves. 1
(b) [An individual who is participating in the supplemental benefit component as 2
provided by KRS 161.635 or 161.636 may, before the effective date of 3
retirement, elect to receive his or her accumulated account balance accrued in 4
the supplemental benefit component annuitized into a monthly payment under 5
one (1) of the actuarial equivalent payment options approved by the board of 6
trustees. 7
(c)] No option shall provide for a benefit with an actuarial value at the age of 8
retirement greater than that provided in KRS 161.620[, 161.635(5)(a), or 9
161.636(5)(a), as applicable]. This section does not apply to disability 10
allowances as provided in KRS 161.661(1). 11
(2) The retirement option chosen by a retiree at the time of service retirement shall 12
remain in force unless the retiree elects to make a change under the following 13
conditions: 14
(a) A divorce, annulment, or marriage dissolution following retirement shall, at 15
the election of the retiree, cancel any optional plan selected at retirement that 16
provides indefinitely continuing benefits to a spousal beneficiary and return 17
the retiree to a single lifetime benefit equivalent as determined by the board; 18
or 19
(b) Following marriage or remarriage, or the death of the designated beneficiary, a 20
retiree may elect a new optional plan of payment based on the actuarial 21
equivalent of a single lifetime benefit at the time of the election, as determined 22
by the board. The plan shall become effective the first of the month following 23
receipt of an application on a form approved by the board. 24
(3) Except as otherwise provided in this section, a beneficiary designation shall not be 25
changed after the effective date of retirement except for retirees who elect the life 26
annuity with refundable balance or the predetermined years certain and life 27 UNOFFICIAL COPY 22 RS BR 1173
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thereafter option. A member may remove a beneficiary at any time, but shall not 1
designate a substitute beneficiary. If a member elects to remove a beneficiary, the 2
member's retirement allowance shall not change regardless of the retirement option 3
selected by the member, even if the removed beneficiary predeceases the member. 4
(4) A member who experiences a qualifying event under subsection (2) of this section 5
and who elects a new optional plan of payment shall make that election within sixty 6
(60) days of the qualifying event. 7
Section 18. KRS 161.661 (Effective January 1, 2022) is amended to read as 8
follows: 9
(1) (a) Any member who is accredited by the Teachers' Retirement System for five 10
(5) or more years of service in Kentucky after July 1, 1941, may retire for 11
disability and be granted a disability allowance if found to be eligible as 12
provided in this section. Application for disability benefits shall be made 13
within one (1) year of the last contributing service in Kentucky, and the 14
disability must have occurred during the most recent period of employment in 15
a position covered by the Teachers' Retirement System and subsequent to the 16
accreditation by the Teachers' Retirement System of five (5) years of 17
retirement system service credit in Kentucky. A disability occurring during the 18
regular vacation immediately following the last period of active service in 19
Kentucky or during an official leave for which the member is entitled to make 20
regular contributions to the retirement system, shall be considered as having 21
occurred during a period of active service. 22
(b) The annual disability allowance shall be equal to sixty percent (60%) of the 23
member's final average salary. 24
(c) The following individuals shall not be eligible for disability benefits under 25
this section: 26
1. Members with twenty-seven (27) or more years of service credit; and 27 UNOFFICIAL COPY 22 RS BR 1173
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2. Individuals who become members on or after July 1, 2021, who are 1
eligible for an unreduced benefit under KRS 161.600(1)(b)2. or (d). 2
(2) The provisions of KRS 161.520, 161.525, and subsections (3), (4), and (5) of this 3
section shall not apply to disability retirees whose benefits were calculated on the 4
service retirement formula nor to survivors of these members. 5
(3) Members shall earn one (1) year of entitlement to disability retirement, at sixty 6
percent (60%) of the member's final average salary, for each four (4) years of 7
service in a covered position, but any member meeting the service requirement for 8
disability retirement shall be credited with no less than five (5) years of eligibility. 9
(4) A member retired by reason of disability shall continue to earn service credit at the 10
rate of one (1) year for each year retired for disability. This service shall be credited 11
to the member's account at the expiration of entitlement as defined in subsection (3) 12
of this section, or when the member's eligibility for disability benefits is terminated 13
upon recommendation of a medical review committee, and this service shall be used 14
in calculating benefits as provided in subsection (5) of this section, but under no 15
circumstances shall this service be used to provide the member with more than 16
twenty-seven (27) years of total service credit. The service credit shall be valued at 17
the same level as service earned by active members as provided under KRS 161.600 18
or 161.620. 19
(5) Any member retired by reason of disability and remaining disabled at the expiration 20
of the entitlement period shall have his or her disability benefits recalculated using 21
the service retirement formula with service credit earned as set out in subsection (4) 22
of this section. The retirement allowance shall be calculated as set forth in KRS 23
161.620, except that those persons less than sixty (60) years of age shall be 24
considered as sixty (60) years of age. Members having their disability benefits 25
recalculated under this subsection shall not be entitled to a benefit based upon an 26
average of their three (3) highest salaries as set forth in KRS 161.220(9), unless 27 UNOFFICIAL COPY 22 RS BR 1173
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approved otherwise by the board of trustees. 1
(6) Members who have their disability retirement allowance recalculated at the 2
expiration of the entitlement period shall continue to have coverage under the post-3
retirement medical insurance program. Restrictions on employment shall remain in 4
effect until the member attains age seventy (70) or until the member's eligibility is 5
discontinued. KRS 161.520 and 161.525 shall not apply to survivors of disability 6
retirees whose retirement allowances have been recalculated at the expiration of the 7
entitlement period. Members who have their disability retirement allowance 8
recalculated at the expiration of their entitlement period shall be entitled to a 9
minimum monthly allowance of five hundred dollars ($500) as the basic straight life 10
annuity. The minimum allowance shall be effective July 1, 1992, and shall apply to 11
those members who have had their allowance recalculated prior to that date and to 12
disability retirees who will have their benefit allowance recalculated on or after that 13
date. For individuals who become members on or after July 1, 2021, disability 14
retirement payments and any other recurring payments payable by any other state-15
administered retirement system shall be applied to reduce, on a dollar-for-dollar 16
basis, the minimum monthly disability retirement allowance payable under this 17
subsection. 18
(7) Effective July 1, 1992, members retired for disability prior to July 1, 1964, shall be 19
entitled to a minimum monthly allowance of five hundred dollars ($500) as their 20
basic straight life annuity and their surviving spouse shall be eligible for survivor 21
benefits as provided in KRS 161.520(1)(a) and (b). 22
(8) Any member retired by reason of disability may voluntarily waive disability benefits 23
and return to teaching or any member, who is age sixty (60) years or older, may 24
elect to waive disability benefits and retire for service on the basis of service 25
credited to the member on the effective date of the disability retirement. 26
(9) In order to qualify for retirement by reason of disability a member must suffer from 27 UNOFFICIAL COPY 22 RS BR 1173
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a physical or mental condition presumed to be permanent in duration and of a nature 1
as to render the member incapable of being gainfully employed in a covered 2
position. The incapability must be revealed by a competent examination by a 3
licensed physician or physicians and must be approved by a majority of a medical 4
review committee. 5
(10) A member retired by reason of disability shall be required to undergo periodic 6
examinations at the discretion of the board of trustees to determine whether the 7
disability allowance shall be continued. When examination and recommendation of 8
a medical review committee indicate the disability no longer exists, the allowance 9
shall be discontinued. 10
(11) Eligibility for payment shall begin on the first day of the month following receipt of 11
the application in the Teachers' Retirement System office, or the first of the month 12
next following the last payment of salary or sick leave benefits by the employer, 13
whichever is the later date. 14
(12) No person who receives a disability allowance may be employed in a position that 15
entails duties or qualification requirements similar to positions subject to 16
participation in the retirement system either within or without the State of 17
Kentucky. So doing shall constitute a misdemeanor and shall result in loss of the 18
allowance from the first date of this service. For purposes of this subsection and 19
subsection (13) of this section, "employment" and "occupation," and derivatives 20
thereof, mean any activity engaged in by the member receiving disability allowance 21
from which income is earned. A member who applies for and is approved for 22
disability retirement on or after July 1, 2002, and whose annual disability benefit is 23
less than forty thousand dollars ($40,000) may earn income in any occupation other 24
than covered employment only to the extent that the annual income from the other 25
employment when added to the annual disability benefit does not exceed forty 26
thousand dollars ($40,000). For any member who exceeds this limit as a result of 27 UNOFFICIAL COPY 22 RS BR 1173
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income from other employment, the Kentucky Teachers' Retirement System shall 1
reduce the member's disability benefit on a dollar-for-dollar basis for each dollar 2
that the member's combined annual disability benefit and annual income from other 3
employment exceeds forty thousand dollars ($40,000). The board of trustees may 4
annually increase the forty thousand dollar ($40,000) limit by the percentage 5
increase in the annual average of the consumer price index for all urban consumers 6
for the most recent calendar year as published by the Federal Bureau of Labor 7
Statistics, not to exceed five percent (5%). The retirement system may require 8
income verification from the member, including but not limited to copies of tax 9
returns and federal forms W-2 and W-4P. 10
(13) All members who applied for disability retirement before July 1, 2002, and were 11
approved as a result of that application shall be subject to the income limitations as 12
they existed on June 30, 2002, until July 1, 2006. Effective July 1, 2006, the twenty-13
seven thousand dollar ($27,000) limitation shall be increased to forty thousand 14
dollars ($40,000) and may be adjusted by the board of trustees by the consumer 15
price index in the manner described in subsection (12) of this section. The recipient 16
of a disability allowance who engages in any gainful occupation other than covered 17
employment must make a report of the duties involved, compensation received, and 18
any other pertinent information required by the board of trustees. The retirement 19
system may require income verification from the member, including but not limited 20
to copies of tax returns and federal forms W-2 and W-4P. 21
(14) The board of trustees shall designate medical review committees, each consisting of 22
three (3) licensed physicians. A medical review committee shall pass upon all 23
applications for disability retirement and upon all applicant statements, medical 24
certifications, and examinations submitted in connection with disability 25
applications. The disposition of each case shall be recommended by a medical 26
review committee in writing to the retirement system. Members of a medical review 27 UNOFFICIAL COPY 22 RS BR 1173
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committee shall follow administrative regulations regarding procedures as the board 1
of trustees may enact and shall be paid reasonable fees and expenses as authorized 2
by the board of trustees in compliance with the provisions of KRS 161.330 and 3
161.340. The retirement system may secure additional medical examinations and 4
information as it deems necessary. A member may appeal any final agency decision 5
denying his or her disability retirement application pursuant to the provisions of 6
KRS 161.250(2). 7
(15) A disability may be presumed to be permanent if the condition creating the 8
disability may be reasonably expected to continue for one (1) year or more from the 9
date of application for disability benefits. 10
(16) Any member who has voluntarily waived disability benefits or whose disability 11
benefits have been discontinued on recommendation of a medical review 12
committee, may apply for reinstatement of disability benefits. The application for 13
reinstatement must be made to the retirement system within twelve (12) months of 14
the date disability benefits terminated. If the termination of benefits were voluntary, 15
the reinstatement may be made without medical examination if application is made 16
within three (3) months of the termination date. Other applications for reinstatement 17
will be processed in the same manner as new applications for benefits. 18
(17) No person who is receiving disability benefits under this section may be employed 19
in a position which qualifies the person for membership in a retirement system 20
financed wholly or in part with public funds. Employment in a position prohibited 21
by this subsection shall result in disqualification for those disability benefits from 22
the date of employment in the prohibited position. 23
(18) Any person who is receiving benefits and becomes disqualified from receiving 24
those benefits under this section, or becomes disqualified from receiving a portion 25
of those benefits due to income from other than covered employment, shall 26
immediately notify the Teachers' Retirement System of this disqualification in 27 UNOFFICIAL COPY 22 RS BR 1173
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writing and shall return all benefits paid after the date of disqualification. Failure to 1
comply with these provisions shall create an indebtedness of that person to the 2
Teachers' Retirement System. Interest at the rate of eight percent (8%) per annum 3
shall be charged if the debt is not repaid within sixty (60) days after the date of 4
disqualification. Failure to repay this debt creates a lien in favor of the Teachers' 5
Retirement System upon all property of the person who improperly receives benefits 6
and does not repay those benefits. The Teachers' Retirement System may, in order 7
to collect an outstanding debt, reduce or terminate any benefit that a member is 8
otherwise entitled to receive. 9
[(19) Notwithstanding any other provision of this section to the contrary, individuals who 10
become members on or after January 1, 2022, shall be eligible for an actuarially 11
determined disability benefit as prescribed by the board of trustees via 12
administrative regulations promulgated by the board. The board of trustees shall 13
arrange by appropriate contract or on a self-insured basis a disability plan to provide 14
the disability benefits and may adjust the benefits in accordance with KRS 15
161.633(3) or 161.634(3).] 16
Section 19. The following KRS sections are repealed: 17
161.633 Foundational component for persons who became nonuniversity members on or 18
after January 1, 2022 -- Valuation assessment -- Adjustments to maintain funding 19
level and contain costs -- Construction. (Effective January 1, 2022) 20
161.634 Foundational component for persons who became university members on or 21
after January 1, 2022 -- Valuation assessment -- Adjustments to maintain funding 22
level and contain costs -- Construction. (Effective January 1, 2022) 23
161.635 Supplemental component for persons who became nonuniversity members on 24
or after January 1, 2022 -- Benefit -- Contributions -- Election upon termination of 25
employment and upon retirement -- Plans authorized under Internal Revenue 26
Code. (Effective January 1, 2022) 27 UNOFFICIAL COPY 22 RS BR 1173
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161.636 Supplemental component for persons who became university members on or 1
after January 1, 2022 -- Benefit -- Contributions -- Election upon termination of 2
employment and upon retirement -- Plans authorized under Internal Revenue 3
Code. (Effective January 1, 2022) 4
Section 20. Individuals who become members of the Teachers' Retirement 5
System on or after January 1, 2022, but prior to the effective date of this Act, who would 6
have otherwise been eligible for the benefits and rights provided by 2021 Ky. Acts ch. 7
157, shall be provided to the benefits and rights that were applicable to individuals who 8
became members of the Teachers' Retirement System immediately prior to January 1, 9
2022. 10
Section 21. Whereas recruiting and retaining the best and brightest teachers to 11
educate and inspire future generations of Kentuckians is crucial to the success, health, and 12
financial well-being of all citizens of the Commonwealth, an emergency is declared to 13
exist, and this Act takes effect upon its passage and approval by the Governor or upon its 14
otherwise becoming a law. 15