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AN ACT relating to reemployment after retirement in the Teachers' Retirement 1
System. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
Section 1. KRS 161.605 is amended to read as follows: 4
Any member retired by reason of service may return to work in a position covered by the 5
Kentucky Teachers' Retirement System and continue to receive his or her retirement 6
allowance under the following conditions: 7
(1) Any member who is retired with thirty (30) or more years of service may return to 8
work in a full-time or a part-time position, or in a position providing substitute 9
teaching service, covered by the Teachers' Retirement System and earn up to a 10
maximum of seventy-five percent (75%) of the member's last annual compensation 11
measured on a daily rate to be determined by the board of trustees. For purposes of 12
determining whether the salary of a member returning to work is seventy-five 13
percent (75%) or less of the member's last annual compensation, all remuneration 14
paid and benefits provided to the member, on an actual dollar or fair market value 15
basis as determined by the retirement system, excluding employer-provided medical 16
insurance required under subsection (4)[(5)] of this section, shall be considered. 17
Members who were retired on or before June 30, 2002, shall be entitled to return to 18
work under the provisions of this section as if they had retired with thirty (30) years 19
of service. Nonqualified service credit purchased under the provisions of KRS 20
161.5465 or elsewhere with any state-administered retirement system shall not be 21
used to meet the thirty (30) year requirement set forth in this subsection. Out-of 22
state teaching service provided in public schools for kindergarten through grade 23
twelve (12) may count toward the thirty (30) year requirement set forth in this 24
subsection even if it is not purchased as service credit, if the member obtains from 25
his or her out-of-state employer certification of this service on forms prescribed by 26
the retirement system; 27 UNOFFICIAL COPY 25 RS HB 441/GA
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(2) Any member who is retired with less than thirty (30) years of service after June 30, 1
2002, may return to work in a full-time or part-time position, or in a position 2
providing substitute teaching service, covered by the Teachers' Retirement System 3
and earn up to a maximum of sixty-five percent (65%) of the member's last annual 4
compensation measured on a daily rate to be determined by the board of trustees. 5
For purposes of determining whether the salary of a member returning to work is 6
sixty-five percent (65%) or less of the member's last annual compensation, all 7
remuneration paid and benefits provided to the member, on an actual dollar or fair 8
market value basis as determined by the retirement system, excluding employer-9
provided medical insurance required under subsection (4)[(5)] of this section, shall 10
be considered; 11
(3) [Reemployment of a retired member under subsection (1) or (2) of this section in a 12
full-time teaching or nonteaching position in a local school district shall be 13
permitted only if the employer certifies to the Kentucky Teachers' Retirement 14
System that there are no other qualified applicants available to fill the teaching or 15
nonteaching position. The employer may use any source considered reliable, 16
including but not limited to data provided by the Education Professional Standards 17
Board and the Department of Education, to determine whether other qualified 18
applicants are available to fill the teaching or nonteaching position. The Kentucky 19
Board of Education shall promulgate administrative regulations to establish 20
procedures to determine whether other qualified applicants are available to fill a 21
teaching or nonteaching position and, if not, for filling the position with a retired 22
member who will then be permitted to return to work in that position under 23
subsection (1) or (2) of this section. The administrative regulations shall ensure that 24
a retired member shall not be hired in a teaching or nonteaching position by a local 25
school district until the superintendent of the school district assures the Kentucky 26
Teachers' Retirement System that every reasonable effort has been made to recruit 27 UNOFFICIAL COPY 25 RS HB 441/GA
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other qualified applicants for the position on an annual basis; 1
(4) ]Under this section, an employer may employ full-time a number of retired 2
members not to exceed ten[three] percent (10%)[(3%)] of the membership actively 3
employed full-time by that employer. The board of trustees may reduce this 4
ten[three] percent (10%)[(3%)] cap upon recommendation of the retirement 5
system's actuary if a reduction is necessary to maintain the actuarial soundness of 6
the retirement system. The board of trustees may increase the ten[three] percent 7
(10%)[(3%)] cap upon a determination that an increase is warranted to help address 8
a shortage in the number of available teachers and upon the determination of the 9
retirement system's actuary that the proposed cap increase allows the actuarial 10
soundness of the retirement system to be maintained. For purposes of this 11
subsection, "full-time" means the same as defined by KRS 161.220(21). A local 12
school district may exceed the quota established by this subsection by making an 13
annual written request to the Kentucky Department of Education which the 14
department may approve on a year-by-year basis[ if the statewide quota has not 15
been met. A district's written request to exceed its quota shall be submitted no 16
sooner than two (2) weeks after the start of the school year]; 17
(4)[(5)] (a) Except as provided by subsection (9)[(10)] of this section, a member 18
returning to work in a full-time or part-time position, or in a position 19
providing substitute teaching service, under subsection (1) or (2) of this 20
section shall contribute to an account with the retirement system that shall be 21
administered independently from and with no reciprocal impact with the 22
member's original retirement account, or any other account from which the 23
member is eligible to draw a retirement allowance. 24
(b) Except as provided by subsection (9)[(10)] of this section, a member returning 25
to work under subsection (1) or (2) of this section shall make contributions to 26
the retirement system at the rate provided under KRS 161.540. The new 27 UNOFFICIAL COPY 25 RS HB 441/GA
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account shall independently meet all vesting requirements as well as all other 1
conditions set forth in KRS 161.600(1) or (2), as applicable, before any 2
retirement allowance is payable from this account. The retirement allowance 3
accruing under this new account shall be calculated pursuant to KRS 161.620. 4
This new account shall not entitle the member to a duplication of the benefits 5
offered under KRS 161.620(7) or 161.675, nor shall this new account provide 6
the benefits offered by KRS 161.520, 161.525, 161.620(3), 161.655, 161.661, 7
or 161.663. 8
(c) A member returning to work under subsection (1) or (2) of this section shall 9
waive his or her medical insurance with the Teachers' Retirement System 10
during the period of reemployment and shall receive the medical insurance 11
coverage that is generally provided by the member's active employer to the 12
other members of the retirement system that the active employer employs. If 13
medical insurance coverage is not available from the employer, the Kentucky 14
Teachers' Retirement System may provide coverage for the member. 15
(d) A member returning to work under subsection (1) or (2) of this section shall 16
not be eligible to purchase service credit for any service provided after the 17
member's effective date of retirement but prior to the date that the member 18
returns to work. A member returning to work under subsection (1) or (2) of 19
this section shall not be eligible to purchase service credit that the member 20
would have otherwise been eligible to purchase prior to the member's initial 21
retirement. 22
(e) A member who returns to work under subsection (1) or (2) of this section, or 23
in the event of the death of the member, the member's estate or applicably 24
designated beneficiary, shall be entitled, within ninety (90) days of the posting 25
of the annual report submitted by the employer, to a refund of contributions as 26
permitted and limited by KRS 161.470; 27 UNOFFICIAL COPY 25 RS HB 441/GA
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(5)[(6)] The board of trustees may annually, on July 1, adjust the current daily rate of 1
a member's last annual compensation, for each full twelve (12) month period that 2
has elapsed subsequent to the member earning his or her last annual compensation, 3
by the percentage increase in the annual average of the consumer price index for all 4
urban consumers for the calendar year preceding the adjustment as published by the 5
Federal Bureau of Labor Statistics, not to exceed five percent (5%) annually. Each 6
annual adjustment shall become part of the member's daily rate base. Failure to 7
comply with the salary limitations set forth in subsections (1) and (2) of this section 8
as may be adjusted by this subsection shall result in a reduction of the member's 9
retirement allowance or any other benefit to which the member would otherwise be 10
entitled on a dollar-for-dollar basis for each dollar that the member exceeds these 11
salary limitations, and the member shall be refunded his or her retirement 12
contributions made on the compensation that exceeds these salary limitations. 13
Notwithstanding any other provision of law to the contrary, a member retiring from 14
a local school district who returns to work for a local school district under 15
subsection (1) or (2) of this section shall be entitled, without any reduction to his or 16
her retirement allowance or any other retirement benefit, to earn a minimum 17
amount equal to one hundred seventy dollars ($170) per day; 18
(6)[(7)] (a) A retired member returning to work under subsection (1) or (2) of this 19
section shall have separated from service for a period of at least one (1) year if 20
returning to work for the same employer on a full-time basis, and at least three 21
(3) months if returning to work for a different employer on a full-time basis. 22
A retired member returning to work under subsection (1) or (2) of this section 23
on a part-time basis shall have separated from service for a period of at least 24
three (3) months before returning to work for any employer. 25
(b) As an alternative to the separation-from-service requirements in paragraph (a) 26
of this subsection, a retired member who is returning to work for the same 27 UNOFFICIAL COPY 25 RS HB 441/GA
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employer in a full-time position under subsections (1) and (2) of this section 1
may elect a separation-from-service of not less than two (2) months followed 2
by a forfeiture of the retired member's retirement allowance on a month-to-3
month basis for each month that the member has separated from service for 4
less than twelve (12) full months. A retired member returning to work for the 5
same employer in a part-time position, or for a different employer in a full-6
time position, may elect an alternative separation-from-service requirement of 7
at least two (2) months followed by a forfeiture of the member's retirement 8
allowance for one (1) month. During the period that the member forfeits his or 9
her retirement allowance and thereafter, member and employer contributions 10
shall be made to the retirement system as a result of employment in any 11
position subject to membership in the retirement system. The member shall 12
contribute to an account with the retirement system subject to the conditions 13
set forth in subsection (4)[(5)] of this section. 14
(c) A retired member who is returning to work for an employer that has 15
employees who participate in the Teachers' Retirement System shall comply 16
with the separation-from-service requirements in this subsection before 17
performing any service for the employer, regardless of whether the retired 18
member is providing service in a position covered by the Teachers' 19
Retirement System. 20
(d) The starting date for any separation from service required under this 21
subsection shall be the effective date of the member's retirement. 22
(e) The separation-from-service requirements of this subsection are not met if 23
there is a prearranged agreement between the member and an employer that 24
has employees who participate in the Teachers' Retirement System prior to 25
retirement for the member to work for the employer after retirement. 26
(f) The Teachers' Retirement System may require the member and the employer 27 UNOFFICIAL COPY 25 RS HB 441/GA
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for which the member is returning to work to certify in writing on a form 1
prescribed by the Teachers' Retirement System that no prearranged agreement 2
was or will be entered into between the member and employer prior to 3
retirement for the member to work for the employer after retirement. 4
(g) Failure to comply with the separation-from-service requirements in this 5
subsection voids a member's retirement and the member shall be required to 6
return all the retirement benefits he or she received, with interest, for the 7
period of time that the member returned to work without a sufficient 8
separation from service; 9
(7)[(8)] (a) Effective July 1, 2004, local school districts may employ retired 10
members in full-time or part-time teaching or administrative positions in 11
critical shortage areas without limitation on the compensation of the retired 12
members that is otherwise required by subsections (1) and (2) of this section.[ 13
Under provisions of this subsection, a local school district may only employ 14
retired members to fill critical shortage positions for which there are no other 15
qualified applicants as determined by the local superintendent.] The number 16
of retired members that a local school district may employ under this 17
subsection shall be no more than four (4)[two (2)] members per local school 18
district or ten[one] percent (10%)[(1%)] of the total active members employed 19
by the local school district on a full-time basis as defined under KRS 20
161.220(21), whichever number is greater. Retired members returning to work 21
under this subsection shall be subject to the separation-from-service 22
requirements set forth in subsection (6)[(7)] of this section. Retired members 23
returning to work under this subsection shall waive their medical insurance 24
coverage with the retirement system during their period of reemployment and 25
receive medical insurance coverage that is offered to other full-time members 26
employed by the local school district. Retired members returning to work 27 UNOFFICIAL COPY 25 RS HB 441/GA
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under this subsection shall contribute to an account subject to the conditions 1
set forth in subsection (4)[(5)] of this section. Retired members returning to 2
work under this subsection shall make contributions to the retirement system 3
at the rate provided under KRS 161.540. The employer shall make 4
contributions at the rate provided under KRS 161.550. Local school districts 5
shall make annual payments to the retirement system on the compensation 6
paid to the reemployed retirees at the rates determined by the retirement 7
system's actuary that reflect any accrued liability resulting from the 8
reemployment of these members. 9
(b) The Department of Education may employ retired members in full-time or 10
part-time teaching or nonteaching positions without the limitations on 11
compensation otherwise required by subsections (1) and (2) of this section to 12
fill critical shortage areas in the schools it operates, including the Kentucky 13
School for the Blind[,] and the Kentucky School for the Deaf,[ and the 14
Kentucky Virtual High School,] and to serve on audit teams. The department 15
shall be subject to the same requirements as local school districts as provided 16
in paragraph (a) of this subsection, except the Teachers' Retirement System 17
shall determine the maximum number of employees that may be employed 18
under this paragraph; 19
(8)[(9)] The return-to-work limitations set forth in this section shall apply to retired 20
members who are returning to work in the same position from which they retired, or 21
a position substantially similar to the one from which they retired, or a position 22
described in KRS 161.046 or any position listed in KRS 161.220(4) which requires 23
membership in the retirement system. Positions which generally require 24
certification or graduation from a four (4) year college or university as a condition 25
of employment which are created, or changed to remove the position from coverage 26
under KRS 161.220(4) are also subject to the return to work limitations set forth in 27 UNOFFICIAL COPY 25 RS HB 441/GA
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this section. The board of trustees shall determine whether employment in a 1
nonteaching position is subject to this subsection; 2
(9)[(10)] (a) Notwithstanding the provisions of this section, individuals who become 3
members on or after January 1, 2022, who subsequently retire and begin 4
drawing a monthly lifetime retirement allowance from the Teachers' 5
Retirement System, who following retirement are reemployed with an 6
employer participating in the Teachers' Retirement System, shall not be 7
eligible to contribute to or earn benefits in a second retirement account in the 8
Teachers' Retirement System during the period of reemployment. 9
(b) The provisions of subsections (1) to (7)[(8)] of this section are not subject to 10
KRS 161.714;[ 11
(11) Any member retired by reason of service may waive his or her annuity and 12
return to full-time employment in a position covered by the Teachers' 13
Retirement System under the following conditions: 14
(a) The member shall receive no annuity payments while employed in a covered 15
position, shall waive his or her medical insurance coverage with the Teachers' 16
Retirement System during the period of reemployment, and shall receive the 17
medical insurance coverage that is generally offered by the member's active 18
employer to the other members of the retirement system employed by the 19
active employer. The member's estate or, if there is a beneficiary applicably 20
designated by the member, then the beneficiary, shall continue to be eligible 21
for life insurance benefits as provided in KRS 161.655. Service subsequent to 22
retirement shall not be used to improve an annuity, except as provided in 23
paragraphs (b) and (c) of this subsection; 24
(b) Any member who waives regular annuity benefits and returns to teaching or 25
covered employment shall be entitled to make contributions on the salaries 26
received for this service and have his or her retirement annuity recalculated as 27 UNOFFICIAL COPY 25 RS HB 441/GA
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provided in the regular retirement formula in KRS 161.620(1), less any 1
applicable actuarial discount applied to the original retirement allowance due 2
to the election of a joint and last survivor option. Retirement option and 3
beneficiary designation on original retirement shall not be altered by 4
postretirement employment, and dependents and spouses of the members shall 5
not become eligible for benefits under KRS 161.520, 161.525, or 161.661 6
because of postretirement employment; 7
(c) When a member returns to full-time teaching or covered employment as 8
provided in subsection (b) of this section, the employer is required to withhold 9
and remit regular retirement contributions. The member must be employed 10
full-time for at least one (1) consecutive contract year to be eligible to 11
improve an annuity. The member shall be returned to the annuity rolls on July 12
1 following completion of the contract year or on the first day of the month 13
following the month of termination of service if full-time employment 14
exceeds one (1) consecutive contract year. A member shall not be returned to 15
the annuity rolls until after he or she has filed a retirement application in 16
compliance with KRS 161.600(6). Any discounts applied at the time of the 17
original retirement due to service or age may be reduced or eliminated due to 18
additional employment if full-time employment is for one (1) consecutive 19
contract year or longer; and 20
(d) A member retired by reason of service who has been employed the equivalent 21
of twenty-five (25) days or more during a school year under KRS 161.605 22
may waive the member's retirement annuity and return to regular employment 23
covered by the Teachers' Retirement System during that school year a 24
maximum of one (1) time during any five (5) year period, beginning with that 25
school year;] 26
(10)[(12)] Retired members may be employed in a part-time teaching capacity by an 27 UNOFFICIAL COPY 25 RS HB 441/GA
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agency described in KRS 161.220(4)(b) or (n), not to exceed the equivalent of 1
twelve (12) teaching hours in any one (1) fiscal year. Retired members may be 2
employed for a period not to exceed the equivalent of one hundred (100) days in 3
any one (1) fiscal year in a part-time administrative or nonteaching capacity by an 4
agency described in KRS 161.220(4)(b) or (n) in a position that would otherwise be 5
covered by the retirement system. Except as otherwise provided by this subsection, 6
the return to work provisions set forth in subsections (1) to (7)[(8)] of this section 7
shall not apply to retired members who return to work solely for an agency 8
described in KRS 161.220(4)(b) or (n). Calculation of the number of days and 9
teaching hours for part-time teaching, substitute teaching, or part-time employment 10
in a nonteaching capacity under this section shall not exceed the ratio between a 11
school year and the actual months of retirement for the member during that school 12
year. The board of trustees by administrative regulation may establish fractional 13
equivalents of a day of teaching service. Any member who exceeds the twelve (12) 14
hour or one hundred (100) day limitations of this subsection shall be subject to 15
having his or her retirement voided and be required to return all retirement 16
allowances and other benefits paid to the member or on the member's behalf since 17
the effective date of retirement. In lieu of voiding a member's retirement, the system 18
may reduce the member's retirement allowance or any other benefit to which the 19
member would otherwise be entitled on a dollar-for-dollar basis for each dollar of 20
compensation that the member earns in employment exceeding twelve (12) hours, 21
one hundred (100) days, or any apportionment of the two (2) combined. Retired 22
members returning to work for an employer described in KRS 161.220(4)(b) or (n) 23
shall comply with the separation-from-service requirements of subsection (6)[(7)] 24
of this section; 25
(11)[(13)] When a retired member returns to employment in a part-time teaching 26
capacity or in a nonteaching capacity as provided in subsection (10)[(12)] of this 27 UNOFFICIAL COPY 25 RS HB 441/GA
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section, the employer shall contribute annually to the retirement system on the 1
compensation paid to the retired member at rates determined by the retirement 2
system actuary that reflect accrued liability for retired members who return to work 3
under subsection (10)[(12)] of this section; and 4
(12)[(14)] For retired members who return to work during any one (1) fiscal year in both 5
a position described in KRS 161.220(4)(b) or (n) and in a position described under 6
another provision under KRS 161.220(4), and for retired members who return to 7
work in a position described under KRS 161.220(4)(b) or (n) in both a teaching and 8
an administrative or nonteaching capacity, the board of trustees shall adopt a 9
methodology for a pro rata apportionment of days and hours that the retired 10
member may work in each position. 11
Section 2. KRS 156.106 is amended to read as follows: 12
(1) For purposes of this section and KRS 161.605, "critical shortage area" means a lack 13
of certified teachers in particular subject areas, in grade levels, or in geographic 14
locations at the elementary and secondary level, as determined annually by the 15
commissioner of education. The commissioner may use any source considered 16
reliable including, but not limited to, data provided by the Education Professional 17
Standards Board and local education agencies to identify the critical shortage areas. 18
(2) (a) The Kentucky Board of Education shall promulgate administrative regulations 19
to establish procedures to be used to appoint retired teachers and 20
administrators to positions in critical shortage areas under this section and 21
KRS 161.605.[ The administrative regulations shall assure that: 22
(a) A retired teacher or administrator shall not be hired until the superintendent 23
assures that he or she has made every reasonable effort to recruit an active 24
teacher or administrator for the position on an annual basis; and] 25
(b) A retired teacher or administrator appointed to a position in a critical 26
shortage area shall be paid, at a minimum, a salary at Rank II with ten (10) 27 UNOFFICIAL COPY 25 RS HB 441/GA
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years of experience based on a single salary schedule adopted by the district. 1
(c) The commissioner of education shall report members reemployed under this section 2
to the Kentucky Teachers' Retirement System.[ 3
(3) The Kentucky Board of Education shall promulgate administrative regulations to 4
establish procedures to be used to appoint retired teachers and administrators to 5
positions in critical shortage areas under this section and KRS 161.605. The 6
administrative regulations shall assure that a retired teacher or administrator shall 7
not be hired until the superintendent assures the commissioner of education that the 8
superintendent has made every reasonable effort to recruit an active teacher or 9
administrator for the position on an annual basis. The commissioner of education 10
shall report members reemployed under this section to the Kentucky Teachers' 11
Retirement System.] 12
(3)[(4)] If a local school district needs a person to fill a critical shortage position after 13
reaching its quota established under KRS 161.605, the commissioner of education 14
with the approval of the executive director of the Kentucky Teachers' Retirement 15
System may allow the district to exceed its quota if the statewide quota has not been 16
met. 17
Section 3. Notwithstanding the amendments made to subsection (11) of Section 18
1 of this Act, retired members participating in the retirement waiver program established 19
by KRS 161.605(11) prior to the effective date of this Act may continue to participate in 20
the program. 21