105 KAR 1:020. Reciprocal program between

CERS, KERS, SPRS, TRS, JRP and LRP.

 

      RELATES TO: KRS 6.500-6.577,

16.505-16.645, 21.345-21.570, 61.510-61.705, 78.510-78.990, 161.600(3), 161.675

      STATUTORY AUTHORITY: KRS 61.645(9)(g)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

61.645(9)(g) authorizes the Board of Trustees of Kentucky Retirement Systems to

promulgate all administrative regulations necessary or proper in order to carry

out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852.

KRS 61.680 provides for the combining of retirement accounts for public

employees having a retirement account in more than one (1) of the following

state administered retirement systems: County Employees Retirement System,

Kentucky Employees Retirement System, Judicial Retirement Plan, Legislators

Retirement Plan, State Police Retirement System and Teachers' Retirement System.

This administrative regulation establishes requirements to implement KRS

61.680.

 

      Section 1. Upon death, disability or

service retirement the following procedure shall be applicable in order to

determine benefits for a member having an account in more than one (1)

retirement system:

      (1) Combine the member's service in all

systems.

      (2) Determine eligibility in each system

based on combined service.

      (3) If eligible in any system, determine

benefits.

      (4) Check for specific exceptions such as

prior service, request for separate account or special death or disability

exception.

      (5) Each system shall pay the applicable

percentage of total benefit unless a specific exception exists.

 

      Section 2. (1) A member eligible to

retire who elects service retirement from one (1) system, shall be paid from

all systems in which he has an account unless he requests that his accounts be

separated.

      (2) The "final compensation"

shall be calculated by using the five (5) highest, or three (3) highest, if

eligible, fiscal years creditable compensation regardless of the system under

which the service was earned, except as provided in KRS 61.680(7).

      (3) Each system shall determine benefit

payments on the basis of the final compensation but using only the service

earned in that system. Payments shall be made by each system in accordance with

its usual procedures. If a member is not eligible for an unreduced benefit,

benefits shall be actuarially reduced based on factors adopted by the

respective retirement boards.

      (4) The retiring member or beneficiary

shall be required to elect the same payment option in each system administered

by the Kentucky Retirement Systems except that a state policeman or a member

with hazardous service may select the "Ten (10) Year Certain" option

set forth in KRS 16.576(4) irrespective of the option chosen for nonhazardous

service.

      (5) A retiring member may elect to have

each system treat his service credit in that system without regard to any other

service credit, by requesting that his accounts be separated by filing a Form

2022, Separation of Accounts, with the Form 6000, Notification of Retirement.

If so requested, "final compensation" shall be based on the

creditable compensation earned under each system separately.

 

      Section 3. (1)(a) If a contributing

member of one (1) of the six (6) systems qualifies for disability benefits, all

systems under which the combined service meets service requirements shall

participate in benefit payments unless accounts are separated by provisions of

KRS 61.680(2)(b).

      (b) Each system shall calculate benefits

using the formula in effect in that system.

      (c) Service added to County Employees

Retirement System, Kentucky Employees Retirement System and State Police

Retirement System accounts in accordance with the appropriate disability

formula in 105 KAR 1:210, Section 9, shall be prorated between system accounts

based on a percentage of actual earned service in each system unless such

proration conflicts with maximum added service permitted by law governing each

system.

      (2) If the combined service of a member

meets service requirements in only one (1) system then that system shall pay

benefits under the disability formula and the other system shall pay as

follows:

      (a) Benefits based on separate accounts

if the member elects to maintain separate accounts;

      (b) An actuarial accrued benefit based on

the member's age, service and final compensation; or

      (c) A refund, if requested by the member.

      (3) The medical requirements for

disability benefits shall be those of the system to which the member last

contributed if combined service meets service requirements of that system. If

service requirements are met in only one (1) system, the medical requirements

of that system shall prevail.

 

      Section 4. A member contributing to any

of the six (6) retirement systems who has combined service sufficient to

qualify for a death benefit shall have his County Employees Retirement System,

Kentucky Employees Retirement System or State Police Retirement System benefits

computed under the regular death formula based on his service in each of the

three (3) systems.

 

      Section 5. A member having valid service

credit in more than one (1) of the retirement systems administered by Kentucky

Retirement Systems who is eligible to purchase service credit may elect to purchase

service credit in one (1) system, or he may divide the service credit between

the systems permitting purchase. If service is to be divided, the following

additional requirements shall be met:

      (1) The same years of service shall not

be used in more than one (1) system.

      (2) Each system shall calculate the costs

of the retirement credit in keeping with the statutes and administrative

regulations of that system.

 

      Section 6. (1) A retiring member with

service in the Kentucky Teachers' Retirement System and one (1) or more of the

three (3) systems administered by Kentucky Retirement Systems shall have his

total service in all four (4) systems combined to determine his eligibility for

medical insurance benefits. The systems shall share the cost of the member's

premium under this section based on his combined service.

      (2) If the member meets the minimum

eligibility requirements, the member may elect to participate in the insurance

program established under KRS 61.702 or 161.675. The premium paid from the

insurance funds shall not be more than 100 percent of the single premium amount

adopted by the respective boards of trustees or more than the maximum

percentage payable under the program established under KRS 61.702 or 161.675.

      (3)(a) If the member elects to

participate in the program under KRS 61.702, the member's service in the

systems shall be combined to determine the applicable percentage that shall be

paid toward his individual coverage under KRS 61.702(3).

      (b) The systems shall pay a pro rata

share of the member's premium based on the service in each system expressed as

a percentage of total service credit earned in all systems not to exceed the

amount of the single premium cost adopted by the Board of Trustees of Kentucky

Retirement Systems.

      1. The amount paid by the Kentucky

Teachers' Retirement System shall not exceed the amount of the single premium

cost adopted by the Board of Trustees of the Kentucky Teachers' Retirement

System.

      2. The Kentucky Teachers' Retirement

System shall not pay a percentage of the premium for the spouse and dependents.

      (4)(a) If the member elects to

participate in the program under KRS 161.675, the member's service in the

systems shall be combined to determine the applicable percentage that shall be

paid under KRS 161.675(3).

      (b) The systems shall pay a pro rata

share of the member's premium based on the service in each system expressed as

a percentage of total service credit earned in all systems, including service

in the Legislators' Retirement Plan and Judicial Retirement Plan, not to exceed

the amount paid toward the monthly premium cost adopted by the Board of

Trustees of Kentucky Teachers' Retirement System.

      1. The amount paid by the Kentucky

Employees Retirement System, County Employees Retirement System and State

Police Retirement System shall not exceed the amount of the single premium cost

adopted by the Board of Trustees of the Kentucky Retirement Systems.

      2. The Kentucky Employees Retirement

System, County Employees Retirement System and State Police Retirement System

shall not pay a percentage of the premium for the spouse or dependents.

      (5) Premiums payable under KRS 61.702

shall be paid by the Kentucky Employees Retirement System, County Employees

Retirement System, and State Police Retirement System. The Kentucky Teachers'

Retirement System shall reimburse the systems for the portion of the premium

attributable to service in that system. Premiums payable under KRS 161.675

shall be paid by the Kentucky Teachers' Retirement System. The Kentucky

Employees Retirement System, County Employees Retirement System, and State

Police Retirement System shall reimburse the system for the portion of the

premium attributable to service in those systems.

 

      Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

      (a) "Form 2022, Separation of

Accounts, August 2002", Kentucky Retirement Systems; and

      (b) "Form 6000, Notification of

Retirement, July 2004", Kentucky Retirement Systems.

      (2)

This material may be inspected, copied, or obtained, subject to applicable

copyright law, at the Kentucky Retirement Systems, Perimeter Park West, 1260

Louisville Road, Frankfort, Kentucky 40601-6124, Monday through Friday, 8 a.m.

to 4:30 p.m. (1 Ky.R. 717; eff. 5-14-75; Am. 9 Ky.R. 1162; eff.

5-4-83; 19 Ky.R. 962; eff. 12-9-92; 29 Ky.R. 755; 1243; eff. 11-12-02; 31 Ky.R.

380; eff. 11-5-04.)