161.550 Contribution to system by employers and state -- Contributions to pension,
1,325 words·~6 min read·
/ky/161-550A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
medical insurance, and life insurance funds.
(1)Each employer, except as provided in KRS 161.552 and 161.555, shall contribute
annually to the Teachers' Retirement System a permanent employer contribution
rate on behalf of each employee it employs equal to:
(a)Thirteen and one hundred five thousandths percent (13.105%) of the total
annual compensation of nonuniversity members who become members prior
to July 1, 2008. Of this permanent employer contribution rate:
1. Twelve and three hundred fifty-five thousandths percent (12.355%) of
the total annual compensation shall be used to fund pension and life
insurance benefits; and
2. Except as provided in KRS 161.552, three-quarters of a percent (0.75%)
of annual compensation shall be used to provide funding to the medical
insurance fund as provided under KRS 161.420(5). If the board of
trustees establishes a trust fund under 26 U.S.C. sec. 115, the board may
deposit the employer contribution provided in this subparagraph in that
trust fund except as provided in KRS 161.552;
(b)Fourteen and one hundred five thousandths percent (14.105%) of the total
annual compensation of nonuniversity members who become members on or
after July 1, 2008, but prior to January 1, 2022. Of this permanent employer
contribution rate:
1. Thirteen and three hundred fifty-five thousandths percent (13.355%) of
the total annual compensation shall be used to fund pension and life
insurance benefits; and
2. Except as provided in KRS 161.552, three-quarters of a percent (0.75%)
of annual compensation shall be used to provide funding to the medical
insurance fund as provided under KRS 161.420(5). If the board of
trustees establishes a trust fund under 26 U.S.C. sec. 115, the board may
deposit the employer contribution provided in this subparagraph in that
trust fund except as provided in KRS 161.552;
(c)Thirteen and sixty-five hundredths percent (13.65%) of the total annual
compensation of university members who become members prior to January
1, 2022. Of this permanent employer contribution rate:
1. Ten and eight hundred seventy-five thousandths percent (10.875%) of
the total annual compensation shall be used to fund pension and life
insurance benefits; and
2. Except as provided in KRS 161.552, two and seven hundred seventy-
five thousandths percent (2.775%) of annual compensation shall be used
to provide funding to the medical insurance fund as provided under KRS
161.420(5). If the board of trustees establishes a trust fund under 26
U.S.C. sec. 115, the board may deposit the employer contribution
provided in this subparagraph in that trust fund except as provided in
KRS 161.552;
(d)Ten and three-quarters percent (10.75%) of the total annual compensation of
nonuniversity members who become members on or after January 1, 2022. Of
this permanent employer contribution rate:
1. Eight percent (8%) of the total annual compensation shall be used to
fund pension and life insurance benefits. The contribution provided by
this subparagraph shall not be used to fund the supplemental benefit
account as provided by KRS 161.635;
2. Two percent (2%) of the total annual compensation shall be used to fund
the mandatory employer contribution of the supplemental benefit
component, except that the board may direct these contributions on a
prospective basis into the pension and life insurance funds to contain
costs within the provisions of KRS 161.633; and
3. Except as provided in KRS 161.552, three-quarters of one percent
(0.75%) of annual compensation shall be used to provide funding to the
medical insurance fund as provided under KRS 161.420(5). If the board
of trustees establishes a trust fund under 26 U.S.C. sec. 115, the board
may deposit the employer contribution provided in this subdivision in
that trust fund except as provided in KRS 161.552; and
(e)Nine and seven hundred seventy-five thousandths percent (9.775%) of total
annual compensation of university members who become members on or after
January 1, 2022. Of this permanent employer contribution rate:
1. Five and seven hundred seventy-five thousandths percent (5.775%) of
the total annual compensation shall be used to fund pension and life
insurance benefits. The contribution provided by this subparagraph shall
not be used to fund the supplemental benefit account as provided by
KRS 161.636;
2. Two percent (2%) of the total annual compensation shall be used to fund
the mandatory employer contribution of the supplemental benefit
component, except that the board may direct these contributions on a
prospective basis into the pension and life insurance funds to contain
costs within the provisions of KRS 161.634; and
3. Except as provided in KRS 161.552, two percent (2%) of annual
compensation shall be used to provide funding to the medical insurance
fund as provided under KRS 161.420(5). If the board of trustees
establishes a trust fund under 26 U.S.C. sec. 115, the board may deposit
the employer contribution provided in this subparagraph in that trust
fund except as provided in KRS 161.552.
(2)In addition to the required contributions in subsection
(1)of this section, the state
shall contribute annually to the Teachers' Retirement System a percentage of the
total salaries of the state-funded and federally funded members it employs to pay
the cost of health insurance coverage for retirees who are not eligible for Medicare
and who retire on or after July 1, 2010, less the amounts that are otherwise required
to be paid by the retirees under KRS 161.675. The board shall deposit funds in the
medical insurance fund unless the board of trustees has established a trust fund
under 26 U.S.C. sec. 115 for this purpose. In this case, the board may deposit the
employer contribution in that trust fund. This contribution shall be known as the
state medical insurance fund stabilization contribution. The percentage to be
contributed by the state under this subsection:
(a)Shall be determined by the retirement system's actuary for each biennial
budget period;
(b)May be suspended or adjusted by the General Assembly if in its judgment the
welfare of the Commonwealth so demands; and
(c)Shall not exceed the lesser of the actual benefit cost for retirees not eligible
for Medicare who retire on or after July 1, 2010, or the amount contributed by
employers under subsection
(3)of this section.
(3)All employers who employ nonuniversity members shall make a contribution for
each payroll on behalf of their active employees who participate in the Teachers'
Retirement System in an amount equal to three percent (3%) of payroll of those
active employees. Except as provided in KRS 161.552, the contribution specified
by this subsection shall be used to fund retiree health benefits.
(4)When the funds established to actuarially fund pension annuities and the medical
insurance fund established under KRS 161.420 become fully funded as determined
by the annual actuarial valuation, the board of trustees shall recommend to the
General Assembly that the contributions required under subsections (1)(c)2. and
(e)3. and
(3)of this section shall, in an actuarially accountable manner, be either
decreased, suspended, or eliminated. The decrease, suspension, or elimination in
contributions required under subsection (1)(c)2. of this section shall not exceed two
and twenty-five thousandths percent (2.025%) of annual compensation. The
decrease, suspension, or elimination in contributions required under subsection
(1)(e)3. of this section shall not exceed one and twenty-five hundredths percent
(1.25%) of annual compensation.
(5)Each employer shall remit the required employer contributions to the retirement
system under the terms and conditions specified for member contributions under
KRS 161.560. The state shall provide annual appropriations based upon estimated
funds needed to meet the requirements of KRS 161.155, 161.168, 161.507(4),
161.515, 161.545, 161.605, 161.612, and 161.620(1), (3), (5), (6), and (7). In the
event an annual appropriation is less than the amount of these requirements, the
state shall make up the deficit in the next biennium budget appropriation to the
retirement system. Employer contributions to the retirement system are for the
exclusive purpose of providing benefits to members and annuitants and these
contributions shall be considered deferred compensation to the members. This
subsection shall not apply to costs applicable to individuals who become members
on or after January 1, 2022.