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AN ACT relating to consumer protection of financial interests. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 371 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section, "notarized" means the signature is accompanied by an 5
acknowledgement, as defined in KRS 423.300, and executed by a notary public 6
authorized to perform notarial acts, as defined in KRS 423.110 or 423.300, in this 7
state or for use in this state in accordance with KRS Chapter 423. 8
(2) Notwithstanding any other provision of law: 9
(a) A person shall not be liable on a loan secured by a deed of trust or mortgage 10
unless the: 11
1. Loan is in writing and signed by the person; and 12
2. Person's signature on the loan is notarized; and 13
(b) A deed of trust or mortgage shall not be enforceable against a spouse of any 14
mortgagor or person liable on the underlying loan in any manner, 15
including enforcement against any assets owned or co-owned by the spouse 16
or any other asset in which the spouse has a dower, curtesy, or other 17
interest, unless, prior to the underlying loan transaction: 18
1. The creditor provides the spouse notice of the loan transaction; and 19
2. The notice referenced in subparagraph 1. of this paragraph is: 20
(a) In writing and signed by the spouse; and 21
(b) The spouse's signature on the notice is notarized. 22
Section 2. KRS 65.154 is amended to read as follows: 23
(1) KRS 344.030 notwithstanding, for the purposes of this section:[,] 24
(a) "Nongovernmental plan employer" means[shall mean] the sponsor of [and 25
"employee" shall mean a member of ]a pension plan governed by the federal 26
"Employee Retirement Income Security Act of 1974[,]"; 27 UNOFFICIAL COPY 23 RS BR 199
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(b) "Employee" means a: 1
1. Member of a pension plan sponsored by a nongovernmental plan 2
employer as defined in paragraph (a) of this subsection; 3
2. Member, retired member, or annuitant of a state-administered 4
retirement system as defined in KRS 6.350; or 5
3. Member of[and any member of a state pension plan or] a pension plan 6
of any unit of a local government that is not a state-administered 7
retirement system; and 8
(c) "Joint and survivor annuity" means an annuitized monthly benefit payable 9
for the life of the employee and upon the employee's death, for the life of the 10
designated beneficiary. 11
(2) For any employee who elects not to take a joint and survivor annuity or who selects 12
a beneficiary other than the spouse if living:[,] 13
(a) The nongovernmental plan employer shall provide forms which provide for 14
the spouse of the employee to acknowledge by signature such action; and 15
(b) The state-administered retirement systems or pension plan of a local 16
government shall require acknowledgement by the employee's spouse on all 17
beneficiary designation forms or forms where the employee selects a 18
payment option that may include a joint and survivor annuity as an option 19
to the retiring employee. The systems or plan shall provide space on the 20
forms for acknowledgement of the action by signature of the spouse. 21
Section 3. KRS 21.540 is amended to read as follows: 22
(1) (a) Except as provided in KRS 21.550, 21.560, and subsections (3) and (7) of this 23
section, the board of trustees of the Judicial Form Retirement System shall be 24
charged with the administration of KRS 6.500 to 6.577 and 21.350 to 21.510. 25
(b) The Judicial Form Retirement System shall have all powers necessary to 26
administer KRS 6.500 to 6.577 and 21.350 to 21.510 including the power to 27 UNOFFICIAL COPY 23 RS BR 199
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promulgate all reasonable administrative regulations, pass upon questions of 1
eligibility and disability, make employments for services, to contract for 2
fiduciary liability insurance, investment counseling, and actuarial, auditing, 3
and other professional services subject to the limitations of KRS Chapters 45, 4
45A, 56, and 57. 5
(c) 1. The administrative expenses shall be paid out of an administrative 6
account which shall be funded by transfers of the necessary money, in 7
appropriate ratio, from the funds provided for in KRS 21.550 and 8
21.560. 9
2. Authorization for all administrative expenses relating to the operations 10
of the Judicial Form Retirement System shall be contained in the 11
biennial budget unit request, branch budget recommendations, and the 12
financial plan adopted by the General Assembly pursuant to KRS 13
Chapter 48. 14
3. The request from the Judicial Form Retirement System shall include any 15
specific administrative expenses requested by the board of trustees that 16
are not otherwise specified by this subsection. 17
(2) (a) A qualified domestic relations order issued by a court or administrative 18
agency shall be honored by the Judicial Form Retirement System if the order 19
is in compliance with the requirements established by the retirement system. 20
(b) Except in cases involving child support payments, the Judicial Form 21
Retirement System may charge reasonable and necessary fees and expenses to 22
the participant and the alternate payee of a qualified domestic relations order 23
for the administration of the qualified domestic relations order by the 24
retirement system. All fees and expenses shall be established by 25
administrative regulations promulgated by the board of trustees of the 26
retirement system. The qualified domestic relations order shall specify 27 UNOFFICIAL COPY 23 RS BR 199
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whether the fees and expenses provided by this subsection shall be paid: 1
1. Solely by the participant; 2
2. Solely by the alternate payee; or 3
3. Equally shared by the participant and alternate payee. 4
(c) For purposes of this subsection, a "qualified domestic relations order" shall 5
mean any judgment, decree, or order, including approval of a property 6
settlement agreement, that: 7
1. Is issued by a court or administrative agency; and 8
2. Relates to the provision of child support, alimony payments, or marital 9
property rights to a spouse, former spouse, child, or other dependent of a 10
member. 11
(3) Notwithstanding any other evidence of legislative intent, it is hereby declared to be 12
the controlling legislative intent that the provisions of KRS 21.345 to 21.580 and 13
6.500 to 6.577 shall conform with federal statutes or regulations and meet the 14
qualification requirements under 26 U.S.C. sec. 401(a), applicable federal 15
regulations, and other published guidance, and the board shall have the authority to 16
promulgate administrative regulations, with retroactive effect if required under 17
federal law, to conform the Legislators' Retirement Plan and the Judicial Retirement 18
Plan with federal statutes and regulations and to meet the qualification requirements 19
under 26 U.S.C. sec. 401(a). 20
(4) In order to improve public transparency regarding the administration of the 21
Legislators' Retirement Plan and the Judicial Retirement Plan, the board of trustees 22
of the Judicial Form Retirement System shall adopt a best-practices model by 23
posting the following information to the system's Web site and shall make it 24
available to the public: 25
(a) Meeting notices and agendas for all meetings of the board. Notices and 26
agendas shall be posted to the system's Web site at least seventy-two (72) 27 UNOFFICIAL COPY 23 RS BR 199
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hours in advance of the board or committee meetings, except in the case of 1
special or emergency meetings as provided by KRS 61.823; 2
(b) A list of the members of the board of trustees and membership on each 3
committee established by the board, including any investment committees; 4
(c) A list of system staff and each staff's salary; 5
(d) A list of the fund's professional consultants and their respective fees and 6
commissions paid by the system; 7
(e) A list of the system's expenditures; 8
(f) The annual financial audit of the system, which shall include but not be 9
limited to a statement of plan net assets, a statement of changes in plan net 10
assets, an actuarial value of assets, a schedule of investments, a statement of 11
funded status and funding progress, and other supporting data; 12
(g) All external audits; 13
(h) The annual actuarial valuation report of pension and retiree health benefits of 14
each retirement plan administered by the system, which shall include a 15
general statistical section and information on contributions, benefit payouts, 16
and retirement plan demographic data; 17
(i) All board minutes or other materials that require adoption or ratification by 18
the board of trustees or committees of the board. The items listed in this 19
paragraph shall be posted within seventy-two (72) hours of adoption or 20
ratification by the board or committees; 21
(j) All bylaws, policies, or procedures adopted or ratified by the board of trustees 22
or by committees of the board; 23
(k) The summary plan description for each plan administered by the system; 24
(l) A document or a link to documents containing an unofficial copy of the 25
statutes governing the plans administered by the Judicial Form Retirement 26
System; 27 UNOFFICIAL COPY 23 RS BR 199
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(m) Investment information, including all investment holdings in aggregate, fees, 1
and commissions for each fund administered by the board, which shall be 2
updated on a quarterly basis for fiscal years beginning on or after July 1, 3
2017. The system shall request from all managers, partnerships, and any other 4
available sources all information regarding fees and commissions and shall, 5
based on the requested information received: 6
1. Disclose the dollar value of fees and commissions paid to each 7
individual manager or partnership; 8
2. Disclose the dollar value of any profit sharing, carried interest, or any 9
other partnership incentive arrangements, partnership agreements, or 10
any other partnership expenses received by or paid to each manager or 11
partnership; and 12
3. As applicable, report each fee or commission by manager or partnership 13
consistent with standards established by the Institutional Limited 14
Partners Association (ILPA). 15
In addition to the requirements of this paragraph, the system shall also 16
disclose the name and address of all individual underlying managers or 17
partners in any fund of funds in which system assets are invested; 18
(n) An update of net investment returns, asset allocations, and the performance of 19
the funds against benchmarks adopted by the board for each fund, for each 20
asset class administered by the board, and for each manager over a historical 21
period. The update shall be posted on a quarterly basis for fiscal years 22
beginning on or after July 1, 2017; 23
(o) All contracts or offering documents for services, goods, or property purchased 24
or utilized by the system. Notwithstanding KRS 61.878, all contracts, 25
including investment contracts, shall be subject to review by the board, the 26
Auditor of Public Accounts, and the Government Contract Review Committee 27 UNOFFICIAL COPY 23 RS BR 199
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established pursuant to KRS 45A.705. If any public record contains material 1
which is not excepted under KRS 61.878, the system shall separate the 2
excepted material by removal, segregation, or redaction, and make the 3
nonexcepted material available for examination; and 4
(p) Information regarding the system's financial and actuarial condition that is 5
easily understood by the members, retired members, and the public. 6
Nothing in this subsection shall require or compel the Judicial Form Retirement 7
System to disclose information specific to the account of an individual member of 8
the Legislators' Retirement Plan or the Judicial Retirement Plan. 9
(5) No trustee or employee of the board shall: 10
(a) Have any interest, direct or indirect, in the gains or profits of any investment 11
or transaction made by the board, provided that the provisions of this 12
paragraph shall not prohibit a member or retiree of one (1) of the retirement 13
plans administered by the system from serving as a trustee; 14
(b) Directly or indirectly, for himself or herself or as an agent, use the assets of 15
the system, except to make current and necessary payments authorized by the 16
board; 17
(c) Become an endorser, surety, or obligor for moneys loaned by or borrowed 18
from the board; 19
(d) Have a contract or agreement with the retirement system, individually or 20
through a business owned by the trustee or the employee; 21
(e) Use his or her official position with the retirement system to obtain a financial 22
gain or benefit or advantage for himself or herself or a family member; 23
(f) Use confidential information acquired during his or her tenure with the 24
systems to further his or her own economic interests or that of another person; 25
or 26
(g) Hold outside employment with, or accept compensation from, any person or 27 UNOFFICIAL COPY 23 RS BR 199
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business with which he or she has involvement as part of his or her official 1
position with the system. The provisions of this paragraph shall not prohibit: 2
1. A trustee from serving as a judge or member of the General Assembly; 3
or 4
2. A trustee from serving on the board if the compensation is de minimus 5
and incidental to the trustee's outside employment. If the compensation 6
is more than de minimus, the trustee shall disclose the amount of the 7
compensation to the other trustees and recuse himself or herself from 8
any matters involving hiring or retaining a person or a business from 9
whom more than de minimus amounts are received by the trustee. For 10
purposes of this section, "de minimus" means an insignificant amount 11
that does not raise a reasonable question as to the trustee's objectivity. 12
(6) Notwithstanding any other provision of KRS 6.500 to 6.577 and 21.345 to 21.580 13
to the contrary, no funds of the Legislators' Retirement Plan or the Judicial 14
Retirement Plan, including fees and commissions paid to an investment manager, 15
private fund, or company issuing securities, who manages systems assets, shall be 16
used to pay fees and commissions to placement agents. For purposes of this 17
subsection, "placement agent" means a third-party individual, who is not an 18
employee, or firm, wholly or partially owned by the entity being hired, who solicits 19
investments on behalf of an investment manager, private fund, or company issuing 20
securities. 21
(7) All contracts for the investment or management of assets of the system shall not be 22
subject to KRS Chapters 45, 45A, 56, and 57. Instead, the board shall conduct the 23
following process to develop and adopt an investment procurement policy with 24
which all prospective contracts for the investment or management of assets of the 25
system shall comply: 26
(a) On or before July 1, 2017, the board shall consult with the secretary of the 27 UNOFFICIAL COPY 23 RS BR 199
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Finance and Administration Cabinet or his or her designee to develop an 1
investment procurement policy, which shall be written to meet best practices 2
in investment management procurement; 3
(b) Thirty (30) days prior to adoption, the board shall tender the preliminary 4
investment procurement policy to the secretary of the Finance and 5
Administration Cabinet or his or her designee for review and comment; 6
(c) Upon receipt of comments from the secretary of the Finance and 7
Administration Cabinet or his or her designee, the board shall choose to adopt 8
or not adopt any recommended changes; 9
(d) Upon adoption, the board shall tender the final investment procurement policy 10
to the secretary of the Finance and Administration Cabinet or his or her 11
designee; 12
(e) No later than thirty (30) days after receipt of the investment procurement 13
policy, the secretary or his or her designee shall certify whether the board's 14
investment procurement policy meets or does not meet best practices for 15
investment management procurement; and 16
(f) Any amendments to the investment procurement policy shall adhere to the 17
requirements set forth by paragraphs (b) to (e) of this subsection. 18
(8) (a) 1. Upon request by any person, the Judicial Form Retirement System shall 19
release the following information from the accounts of any member or 20
retiree of the Legislators' Retirement Plan or the Judicial Retirement 21
Plan, if the member or retiree is a current or former officeholder in the 22
Kentucky General Assembly: 23
a. The first and last name of the member or retiree; 24
b. The plan or plans in which the member has an account or from 25
which the retiree is receiving a monthly retirement allowance; 26
c. The status of the member or retiree, including but not limited to 27 UNOFFICIAL COPY 23 RS BR 199
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whether he or she is a contributing to the plans but has not retired, 1
or a retiree drawing a monthly retirement allowance; 2
d. If the individual is a retiree, the monthly retirement allowance that 3
he or she was receiving at the end of the most recently completed 4
fiscal year; and 5
e. If the individual is a member who has not yet retired, the estimated 6
monthly retirement allowance that he or she is eligible to receive 7
on the first date he or she would be eligible for an unreduced 8
retirement allowance, using his or her service credit, final 9
compensation, and accumulated account balance at the end of the 10
most recently completed fiscal year. 11
2. No information shall be disclosed under this paragraph from an account 12
that is paying benefits to a beneficiary due to the death of a member or 13
retiree. 14
(b) The release of information under paragraph (a) of this subsection shall not 15
constitute a violation of the Open Records Act, KRS 61.870 to 61.884. 16
(9) Payment option selections and beneficiary designations established or modified 17
by a member or retired member under KRS 6.500 to 6.577 or 21.345 to 21.580 18
shall be subject to acknowledgement by the spouse of the member or retired 19
member in accordance with Section 2 of this Act. 20
Section 4. KRS 61.542 is amended to read as follows: 21
(1) Prior to the first day of the month in which the member receives his or her first 22
retirement allowance and prior to the member filing a notification of retirement or a 23
request for refund: 24
(a) Each member may designate on the form prescribed by the Authority a 25
principal beneficiary and contingent beneficiary for his or her account or 26
accounts. The principal beneficiary or contingent beneficiary designated by 27 UNOFFICIAL COPY 23 RS BR 199
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the member shall be: 1
1. One (1) or more persons; or 2
2. The member's estate; or 3
3. A trust; 4
(b) If multiple persons are designated as provided by paragraph (a)1. of this 5
subsection, the member shall indicate the percentage of total benefits each 6
person is to receive. 7
1. If percentages are not indicated, payments will be disbursed equally to 8
the named beneficiaries. 9
2. If the percentages indicated do not total one hundred percent (100%), 10
each beneficiary shall receive an increased or decreased percentage 11
which is proportional to the percentage allotted him or her by the 12
member. 13
3. If any of the multiple beneficiaries die prior to the member's death, the 14
remaining beneficiaries shall be entitled to the deceased beneficiary's 15
percentage of the total benefits, and each shall receive a percentage of 16
the deceased's share which is equal to the percentage allotted them by 17
the member; 18
(c) The principal and contingent beneficiary designation established by the 19
member pursuant to paragraph (a) of this subsection shall remain in full force 20
and effect until changed by the member, except: 21
1. A final divorce decree terminates an ex-spouse's status as beneficiary, 22
unless the member has on file in the retirement office a beneficiary 23
designation that redesignates the ex-spouse as beneficiary subsequent to 24
the issuance of the divorce decree; 25
2. If a beneficiary or beneficiaries are convicted of any crime which 26
prohibits that person or persons from receiving the benefits under KRS 27 UNOFFICIAL COPY 23 RS BR 199
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381.280, the beneficiary or beneficiaries shall not be eligible for any of 1
the benefits and the remaining beneficiary or beneficiaries or, if none, 2
the member's estate, shall become the beneficiary; and 3
3. When a notification of retirement has been filed at the retirement office, 4
the designation of beneficiary on the notification of retirement, which 5
shall be one (1) person, his or her estate, or a trust, shall supersede the 6
designation of all previous beneficiaries, unless the notification of 7
retirement is withdrawn, invalid, or voided. If the notification of 8
retirement is withdrawn, invalid, or voided, the prior beneficiary 9
designation on file with the system shall remain in full force and effect 10
until changed by the member; and 11
(d) Except as provided by paragraph (c)3. of this subsection, if the member fails 12
to designate a beneficiary for his or her account or if the beneficiary 13
designation is determined to be void by the system, the member's estate shall 14
become the beneficiary. 15
(e) If the member has more than one (1) account in the Kentucky Employees 16
Retirement System, County Employees Retirement System, or State Police 17
Retirement System, the member shall not be eligible to name differing 18
beneficiaries for each system but shall instead complete one (1) beneficiary 19
designation form which shall be applicable to all systems in which the 20
member has an account. 21
(2) If the member dies prior to the first day of the month in which the member would 22
have received his or her first retirement allowance and prior to filing a notification 23
of retirement or a request for refund, any retirement benefits shall be payable to the 24
principal beneficiary, except that: 25
(a) If the death of the principal beneficiary or beneficiaries precedes the death of 26
the member, or if the principal beneficiary is terminated by a divorce decree, 27 UNOFFICIAL COPY 23 RS BR 199
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the contingent beneficiary or beneficiaries become the principal beneficiary or 1
beneficiaries; 2
(b) If the principal beneficiary is one (1) person and is the member's spouse and 3
they are divorced on the date of the member's death, the contingent 4
beneficiary or beneficiaries become the principal beneficiary or beneficiaries; 5
(c) If the member is survived by his or her principal beneficiary or beneficiaries 6
who subsequently die prior to having on file at the retirement office the 7
necessary forms prescribed under authority of KRS 61.590, the contingent 8
beneficiary shall become the principal beneficiary or beneficiaries; 9
(d) If the deaths of all the principal beneficiaries and all of the contingent 10
beneficiaries precede the death of the member, the estate of the member 11
becomes the beneficiary; and 12
(e) If the member dies as a direct result of an act in line of duty as defined in KRS 13
16.505 or 78.510, or dies as a result of a duty-related injury as defined in KRS 14
61.621, the surviving spouse shall supersede all previously designated 15
principal or contingent beneficiaries, unless the deceased member files a valid 16
beneficiary designation form with the retirement office after the date of 17
marriage to the surviving spouse. 18
(3) Prior to the first day of the month in which the member would have received his or 19
her first retirement allowance, a monthly benefit payable for life shall not be offered 20
if the beneficiary designated under subsection (1) of this section is more than one 21
(1) person, the member's estate, or a trust. 22
(4) When a notification of retirement as provided by KRS 61.590 or a form to change 23
beneficiaries as provided by subsection (5)(a) and (b) of this section has been filed 24
at the retirement office: 25
(a) The designation of beneficiary on the notification of retirement or beneficiary 26
change form shall supersede the designation of all previous beneficiaries; 27 UNOFFICIAL COPY 23 RS BR 199
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(b) The beneficiary designated by the member on the member's notification of 1
retirement or beneficiary change form shall be one (1) person, the member's 2
estate, or a trust; and 3
(c) If the death of the beneficiary named on the notification of retirement 4
precedes the first day of the month in which the member receives his or her 5
first retirement allowance, the member may designate another beneficiary on 6
the member's notification of retirement. 7
(5) On or after the first day of the month in which the member receives his or her first 8
retirement allowance, the member shall not have the right to change his or her 9
beneficiary, except that: 10
(a) A retired member receiving the monthly retirement allowance under the basic 11
payment option, a period certain option as provided by KRS 61.635(5) to (7), 12
or the Social Security adjustment option without survivor rights as provided 13
by KRS 61.635(8)(a) may elect to change his or her beneficiary at any time by 14
filing a beneficiary change form as prescribed by the board with the 15
retirement office. This paragraph shall not authorize a retired member to 16
change the payment option he or she selected upon retirement; 17
(b) A retired member receiving a monthly retirement allowance who marries or 18
remarries following retirement may make a one (1) time election within one 19
hundred twenty (120) days of marriage or remarriage to provide monthly 20
survivorship benefits to his or her new spouse by: 21
1. Designating his or her new spouse as beneficiary by filing a beneficiary 22
change form as prescribed by the board with the retirement office; and 23
2. Selecting a new monthly retirement allowance option under one (1) of 24
the survivorship options provided by KRS 61.635(2), (3), (4), and 25
(8)(b). Any new survivorship payment option shall be actuarially 26
equivalent to the monthly retirement allowance the retired member was 27 UNOFFICIAL COPY 23 RS BR 199
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receiving prior to the change and shall not impact any other benefits 1
otherwise payable to an alternate payee under KRS 61.690; 2
(c) The estate of the retired member becomes the beneficiary if the date of death 3
of the beneficiary precedes or coincides with the date of death of the retired 4
member, and the retired member had not elected a new beneficiary under this 5
subsection; 6
(d) The estate of the retired member becomes the beneficiary if the retired 7
member had designated a person as beneficiary who was the spouse or who 8
later married the member and they were divorced on the date of the retired 9
member's death, and the retired member had not elected a new beneficiary 10
under this subsection. An ex-spouse who was the named beneficiary on the 11
member's notification of retirement shall be reinstated as the member's 12
beneficiary for the payment options provided by KRS 61.635(2), (3), (4), and 13
(8)(b) if they are remarried to each other as of the date of the retired member's 14
death, and the retired member had not elected a new beneficiary under this 15
subsection; 16
(e) The estate of the member shall not receive monthly payments if the member 17
selected one (1) of the payment options provided by KRS 61.635(2), (3), (4), 18
and (8)(b); and 19
(f) For purposes of this subsection, "basic payment option" means the lifetime 20
monthly retirement allowance otherwise provided to the retired member under 21
KRS 16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852 that is not one 22
(1) of the optional retirement plans provided under KRS 61.635. 23
(6) Following cessation of membership as provided by KRS 61.535 or 78.540, no 24
beneficiary designation in one (1) account shall be effective for any new retirement 25
account established. If the member fails to designate a beneficiary for his or her 26
new retirement account or if the beneficiary designation is determined to be void by 27 UNOFFICIAL COPY 23 RS BR 199
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the system, the member's estate shall become the beneficiary. 1
(7) Beneficiary designations established or modified pursuant to this section shall be 2
subject to acknowledgement by the spouse of the member or retired member in 3
accordance with Section 2 of this Act. 4
Section 5. KRS 61.590 is amended to read as follows: 5
(1) (a) A member or beneficiary eligible to receive retirement benefits under any of 6
the provisions of KRS 61.510 to 61.705, 78.510 to 78.852, and 16.510 to 7
16.652 shall have on file at the retirement office on the form prescribed by the 8
board, a correctly completed notification of retirement, giving his or her 9
name, address, Social Security number or Kentucky Public Pensions 10
Authority member identification number, last day of employment, and other 11
information the Authority may require. The form entitled "Notification of 12
Retirement" shall not be filed more than six (6) months before the member's 13
effective retirement date. 14
(b) A member eligible to receive retirement benefits under any of the provisions 15
of KRS 61.510 to 61.705, 78.510 to 78.852, and 16.510 to 16.652 shall certify 16
in writing on the "Notification of Retirement" form or another form 17
prescribed by the board that no prearranged agreement existed prior to the 18
member's retirement between the member and any participating agency in the 19
systems administered by the Kentucky Retirement Systems or any 20
participating agency in the County Employees Retirement System for the 21
member to return to employment with the participating agency. No retirement 22
benefits shall be paid to the member until the member completes the 23
certification required by this paragraph. 24
(2) After receipt of the correctly completed form entitled "Notification of Retirement," 25
the Authority shall cause to be prepared an estimate of the amounts the member or 26
beneficiary may expect to receive under the various plans available to the member 27 UNOFFICIAL COPY 23 RS BR 199
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or beneficiary. This information shall be recorded on a form entitled "Estimated 1
Retirement Allowance" and forwarded to the member or beneficiary. 2
(3) The member or beneficiary shall file at the retirement office the form entitled 3
"Estimated Retirement Allowance" after he or she has checked one (1) payment 4
option of his or her choice, signed the document, and had his or her signature 5
witnessed or acknowledged by the member's spouse as required by Section 2 of 6
this Act. A member shall not have the right to select a different payment option on 7
or after the first day of the month in which the member receives his or her first 8
retirement allowance or after the effective date of a deferred retirement option as 9
provided by subsection (6) of this section, except as provided by KRS 61.542(5). A 10
beneficiary shall not have the right to select a different payment option after the 11
effective date of the beneficiary's retirement allowance as provided in subsection 12
(7) of this section. 13
(4) A member or beneficiary choosing a monthly payment option shall have on file at 14
the retirement office his or her birth certificate or other acceptable evidence of date 15
of birth. If a survivorship option is chosen, proof of dates of birth of the beneficiary 16
and member shall be on file at the retirement office. 17
(5) (a) The effective date of normal retirement shall be the first month following the 18
month in which employment from all employers participating in any of the 19
systems administered by Kentucky Retirement Systems and all employers 20
participating in the County Employees Retirement System was terminated. 21
(b) The effective date of disability retirement shall be the first month following 22
the month in which the member's last day of paid employment in a regular 23
full-time position occurred, provided the member files the form entitled 24
"Estimated Retirement Allowance" no later than six (6) months following the 25
date the notification of approval for disability retirement benefits is sent by 26
United States first-class mail to the member's last address on file in the 27 UNOFFICIAL COPY 23 RS BR 199
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retirement office, by electronic mail to the member's last electronic mail 1
address on file in the retirement office, or by other electronic means. If the 2
member fails to file the form entitled "Estimated Retirement Allowance" 3
within six (6) months of the date the notification of approval for disability 4
retirement benefits is sent, then the member's form entitled "Notification of 5
Retirement" shall be void. The member shall be required to submit a new 6
form entitled "Notification of Retirement" to apply for disability retirement 7
and reestablish eligibility for disability retirement benefits. 8
(c) The effective date of early retirement shall be the first month following the 9
month a correctly completed form entitled "Notification of Retirement" is 10
filed at the retirement office or a future month designated by the member, if 11
employment from all employers participating in any of the systems 12
administered by Kentucky Retirement Systems and all employers 13
participating in the County Employees Retirement System has been 14
terminated and if the member files the form entitled "Estimated Retirement 15
Allowance" no later than six (6) months following termination. If the member 16
fails to file the form entitled "Estimated Retirement Allowance" within six (6) 17
months following the effective retirement date of the member, then the 18
member's form entitled "Notification of Retirement" shall be void and the 19
member shall be required to submit a new form entitled "Notification of 20
Retirement" to apply for early retirement. 21
(6) The effective date of a deferred retirement option as provided under KRS 16.576(5) 22
shall be the month following age sixty-five (65), or the month following written 23
notification from the member that he or she wishes to begin receiving retirement 24
payments. In the event of the death of a member who has deferred his or her 25
retirement allowance, the effective date of retirement shall be the month following 26
the member's death. 27 UNOFFICIAL COPY 23 RS BR 199
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(7) Notwithstanding the provisions of KRS 16.578 or 61.640, the effective date of a 1
beneficiary's retirement allowance under normal, early, or disability retirement shall 2
be as prescribed in subsection (5) or (6) of this section if the member dies before the 3
first day of the month in which the member would have received his or her first 4
retirement allowance and his or her beneficiary becomes eligible for payments 5
under KRS 16.578 or 61.640. 6
Section 6. KRS 61.705 is amended to read as follows: 7
(1) Upon the death of a retired member of the Kentucky Employees Retirement System 8
or State Police Retirement System who was receiving a monthly retirement 9
allowance based on a minimum of forty-eight (48) months of service or whose 10
retirement allowance based on a minimum of forty-eight (48) months was 11
suspended in accordance with KRS 61.637, a death benefit of five thousand dollars 12
($5,000) shall be paid. If the retired member had more than one (1) account in the 13
Kentucky Employees Retirement System or State Police Retirement System, or was 14
eligible for a benefit under KRS 78.5538 from the County Employees Retirement 15
System, the systems shall pay only one (1) five thousand dollar ($5,000) death 16
benefit. Each system's cost shall be prorated between the systems based upon the 17
level of service credit in each system. Application for the death benefit made to the 18
Kentucky Retirement Systems shall include acceptable evidence of death and of the 19
eligibility of the applicant to act on the deceased retired member's behalf. 20
(2) The death benefit shall be paid to a beneficiary named by the retired member. Upon 21
retirement or any time thereafter, the retired member may designate on the form 22
prescribed by the board, death benefit designation, a person, the retired member's 23
estate, a trust or trustee, or a licensed funeral home, as the beneficiary of the death 24
benefit provided by this section or KRS 78.5538. The beneficiary for the death 25
benefit may or may not be the same beneficiary designated in accordance with KRS 26
61.590(1) but only one (1) designation shall be available to a retired member who 27 UNOFFICIAL COPY 23 RS BR 199
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has service in both the County Employees Retirement System and the Kentucky 1
Retirement Systems. If the beneficiary designated under this section is a person and 2
that person dies prior to the member, or if the beneficiary was the retired member's 3
spouse and they were divorced on the date of the retired member's death, then the 4
retired member's estate shall become the beneficiary, unless the retired member has 5
filed a subsequent death benefit designation. If a licensed funeral home is 6
designated as beneficiary and the licensed funeral home cannot be reasonably 7
identified or located by Kentucky Retirement Systems at the time of the retired 8
member's death, then the retired member's estate shall become the beneficiary of the 9
death benefit. 10
(3) If, at the time of the retired member's death, a debt to the Kentucky Retirement 11
Systems remains on his or her account, the balance owed shall be deducted from the 12
five thousand dollars ($5,000) death benefit. 13
(4) Upon the death of a retired member, the death benefit provided pursuant to this 14
section may be assigned by the designated beneficiary to a bank or licensed funeral 15
home. 16
(5) Beneficiary designations established or modified pursuant to this section shall be 17
subject to acknowledgement by the spouse of the member or retired member in 18
accordance with Section 2 of this Act. 19
Section 7. KRS 78.5538 is amended to read as follows: 20
(1) (a) Upon the death of a retired member of the system, who was receiving a 21
monthly retirement allowance based on a minimum of forty-eight (48) months 22
of service, a death benefit of five thousand dollars ($5,000) shall be paid. 23
(b) If the retired member had more than one (1) account in the County Employees 24
Retirement System or is eligible for a benefit from the Kentucky Retirement 25
Systems under the provisions of KRS 61.705, the combined payment from the 26
County Employees Retirement System under this section and the Kentucky 27 UNOFFICIAL COPY 23 RS BR 199
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Retirement Systems under KRS 61.705 shall not exceed five thousand dollars 1
($5,000). Each system's cost shall be prorated between the systems based 2
upon the level of service credit in each system. 3
(c) Application for the death benefit made to the system shall include acceptable 4
evidence of death and of the eligibility of the applicant to act on the deceased 5
retired member's behalf. 6
(2) (a) The death benefit shall be paid to a beneficiary named by the retired member. 7
Upon retirement or any time thereafter, the retired member may designate on 8
the form prescribed by the board, death benefit designation, a person, the 9
retired member's estate, a trust or trustee, or a licensed funeral home, as the 10
beneficiary of the death benefit provided by this section or KRS 61.705. The 11
beneficiary for the death benefit may or may not be the same beneficiary 12
designated in accordance with KRS 61.590(1) but only one (1) designation 13
shall be available to a retired member who has service in both the County 14
Employees Retirement System and the Kentucky Retirement Systems. 15
(b) If the beneficiary designated under this section is a person and that person 16
dies prior to the member, or if the beneficiary was the retired member's 17
spouse and they were divorced on the date of the retired member's death, then 18
the retired member's estate shall become the beneficiary, unless the retired 19
member has filed a subsequent death benefit designation. 20
(c) If a licensed funeral home is designated as beneficiary and the licensed 21
funeral home cannot be reasonably identified or located by the system at the 22
time of the retired member's death, then the retired member's estate shall 23
become the beneficiary of the death benefit. 24
(3) If, at the time of the retired member's death, a debt to the County Employees 25
Retirement System remains on his or her account, the balance owed shall be 26
deducted from the five thousand dollars ($5,000) death benefit. 27 UNOFFICIAL COPY 23 RS BR 199
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(4) Upon the death of a retired member, the death benefit provided pursuant to this 1
section may be assigned by the designated beneficiary to a bank or licensed funeral 2
home. 3
(5) Beneficiary designations established or modified pursuant to this section shall be 4
subject to acknowledgement by the spouse of the member or retired member in 5
accordance with Section 2 of this Act. 6
Section 8. KRS 161.480 is amended to read as follows: 7
(1) (a) Each person, upon becoming a member of the retirement system, shall file a 8
detailed statement as required by the board of trustees and shall designate a 9
primary beneficiary or two (2) or more cobeneficiaries to receive any benefits 10
accruing from the death of the member. 11
(b) A contingent beneficiary may be designated in addition to the primary 12
beneficiary or cobeneficiaries. The member may name more than one (1) 13
contingent beneficiary. 14
(c) Any beneficiary designation made by the member, including the estate should 15
the estate become the beneficiary by default, shall remain in effect until 16
changed by the member on forms prescribed by the Teachers' Retirement 17
System, except in the event of subsequent marriage or divorce. Subsequent 18
marriage by the member shall void the primary beneficiary and any 19
cobeneficiary designation, even that of a trust, and the spouse of the member 20
at death shall be considered as the primary beneficiary, unless the member 21
subsequent to marriage designates another beneficiary. An individual who is 22
married prior to becoming a member of the retirement system and remains 23
married at the time of becoming a member shall have his or her spouse 24
considered the primary beneficiary, unless the member designates another 25
beneficiary. A final divorce decree shall terminate an ex-spouse's status as 26
either primary beneficiary, cobeneficiary, or contingent beneficiary, unless 27 UNOFFICIAL COPY 23 RS BR 199
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subsequent to divorce the member redesignates the former spouse as primary 1
beneficiary, cobeneficiary, or contingent beneficiary. 2
(d) To the extent permitted by the Internal Revenue Code, a trust may be 3
designated as beneficiary for receipt of a member's accumulated account 4
balance in the retirement system as provided under KRS 161.470(7). A final 5
divorce decree shall not terminate the designation of a trust as beneficiary 6
regardless of who is designated as beneficiary of the trust. 7
(e) In the event that a member fails to designate a beneficiary, or all designated 8
beneficiaries predecease the member, the member's estate shall be deemed to 9
be the beneficiary, unless the member is married at the time of his or her 10
death, in which case the spouse shall be deemed the beneficiary. 11
(f) Members may designate as beneficiaries only presently identifiable and 12
existing individuals, or trusts where otherwise permitted, without contingency 13
instructions, on forms prescribed by the retirement system. 14
(2) The provisions of this section shall be retroactive as they relate to election of 15
beneficiaries by members still in active status on the effective date of this section. 16
The provisions of this section shall not apply to any account from which a member 17
is drawing a retirement allowance or to the life insurance benefit available under 18
KRS 161.655. 19
(3) Beneficiary designations established or modified pursuant to this section shall be 20
subject to acknowledgement by the spouse of the member in accordance with 21
Section 2 of this Act. 22
Section 9. KRS 161.630 is amended to read as 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 23 RS BR 199
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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, 20
a 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 22
determined by the board. The plan shall become effective the first of the 23
month following 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 23 RS BR 199
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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
(5) The payment option selections and beneficiary designations established or 8
modified by this section shall be subject to acknowledgement by the spouse of the 9
member or annuitant in accordance with Section 2 of this Act. 10
Section 10. KRS 161.655 is amended to read as follows: 11
(1) Effective July 1, 2000, the Teachers' Retirement System shall: 12
(a) Provide a life insurance benefit in a minimum amount of five thousand dollars 13
($5,000) for its members who are retired for service or disability, except that 14
the minimum amount for an individual who becomes a member on or after 15
January 1, 2022, and retires for service or disability shall be ten thousand 16
dollars ($10,000). This life insurance benefit shall be payable upon the death 17
of a member retired for service or disability to the member's estate or to a 18
party designated by the member on a form prescribed by the retirement 19
system; and 20
(b) Provide a life insurance benefit in a minimum amount of two thousand dollars 21
($2,000) for its active contributing members, except that the minimum amount 22
for an individual who becomes a member on or after January 1, 2022, and is 23
an active contributing member shall be five thousand dollars ($5,000). This 24
life insurance benefit shall be payable upon the death of an active contributing 25
member to the member's estate or to a party designated by the member on a 26
form prescribed by the retirement system. 27 UNOFFICIAL COPY 23 RS BR 199
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(2) (a) The member may name one (1) primary and one (1) contingent beneficiary for 1
receipt of the life insurance benefit. To the extent permitted by the Internal 2
Revenue Code, a trust may be designated as beneficiary for receipt of the life 3
insurance benefit. 4
(b) Members may designate as beneficiaries only presently identifiable and 5
existing individuals, or trusts where otherwise permitted, without contingency 6
instructions, on forms prescribed by the retirement system. 7
(c) In the event that a member fails to designate a beneficiary, or all designated 8
beneficiaries predecease the member, the member's estate shall be deemed to 9
be the beneficiary, unless the member is married at the time of his or her 10
death, in which case the spouse shall be deemed the beneficiary. 11
(d) 1. Any beneficiary designation made by the member, including the estate 12
should the estate become the beneficiary by default, shall remain in 13
effect until changed by the member on forms prescribed by the 14
retirement system, except in the event of subsequent marriage or 15
divorce. 16
2. A valid marriage license shall terminate any previously designated 17
beneficiary, even that of a trust, and establish the spouse as beneficiary 18
unless, subsequent proof of the marriage, the member or retired member 19
redesignates someone other than the new spouse as the beneficiary. 20
3. An individual who is married prior to becoming an active member or a 21
retired member of the retirement system and remains married at the time 22
of becoming an active or retired member of the retirement system shall 23
have his or her spouse considered the primary beneficiary, unless the 24
member designates another beneficiary. 25
4. A final divorce decree shall terminate the beneficiary status of an ex-26
spouse unless, subsequent to divorce, the member redesignates the 27 UNOFFICIAL COPY 23 RS BR 199
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former spouse as a beneficiary. A final divorce decree shall not 1
terminate the designation of a trust as beneficiary regardless of who is 2
designated as beneficiary of the trust. 3
(e) The Teachers' Retirement System shall not acknowledge a beneficiary 4
designation unless the life insurance beneficiary form is received by the 5
Teachers' Retirement System prior to the member's death, or the life insurance 6
beneficiary form has been deposited in the mail with a postmark date no later 7
than the date of the member's death. 8
(3) Application for payment of life insurance proceeds shall be made to the Teachers' 9
Retirement System together with acceptable evidence of death and eligibility. The 10
reciprocal provisions of KRS 61.680(2)(a) shall not apply to the coverage and 11
payment of proceeds by the life insurance benefit under this section. 12
(4) Suit or civil action shall not be required for the collection of the proceeds of the life 13
insurance benefit provided for by this section, but nothing in this section shall 14
prevent the maintenance of suit or civil action against the beneficiary or legal 15
representative receiving the proceeds of the life insurance benefit. 16
(5) Upon the death of a member of the Teachers' Retirement System, the life insurance 17
provided pursuant to subsection (1) of this section may be assigned by the 18
designated beneficiary to a bank or licensed funeral home. 19
(6) Beneficiary designations established or modified pursuant to this section shall be 20
subject to acknowledgement by the spouse of the member or annuitant in 21
accordance with Section 2 of this Act. 22