161.597 Installment payments for purchase of service credit by active contributing

389 words·~2 min read·/ky/161-597

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

members.

(1)A member in active contributing status may purchase any service credit which the

member is authorized to purchase by making installment payments in lieu of a

lump-sum payment.

(2)To initiate an installment payment plan, a member shall make a written request to

the retirement system for an estimate to purchase service credit by making

installment payments.

(3)To qualify for installment payments, the total cost of the service purchase, including

any chargeable interest, shall exceed one thousand dollars ($1,000).

(4)Installment payments shall be at least fifty dollars ($50) per month and shall be

made for a period of time which is not less than twelve

(12)months nor more than

sixty

(60)months. Interest at eight percent (8%) per annum, unless the board

specifies in an administrative regulation a different interest rate, shall be charged on

all installment payment purchases of service credit that are purchasable at less than

full actuarial cost. Interest shall be assigned to the guarantee fund.

(5)Installment payments shall be made on a monthly basis by electronic fund transfer.

The payments shall be considered accumulated contributions and shall not be

picked up as provided in KRS 161.560, except that subject to approval by the

Internal Revenue Service and only as permitted by the Internal Revenue Code,

installment payments shall be made on a tax-deferred basis.

(6)A member may elect to terminate electronic fund transfers at any time and purchase

the remaining service credit by lump-sum payment. A member on a leave of

absence may continue to make installment payments. Termination of employment

in a covered position shall terminate installment payments. If the member is later

employed by a different employer in a covered position, the member may request a

new estimate and reinstate installment payments. A member that misses two

consecutive installment payments shall be in default. A member in default shall

receive a refund of all prior installment payments and the member's service credit

shall be reduced accordingly. A member in default may not reinstate installment

payments for twelve

(12)months from the date the member was in default.

(7)If a member dies before completing scheduled installment payments, the named

beneficiary of the member's retirement account may pay the remaining balance due

by a lump-sum payment within thirty

(30)days of the death of the member.