21.525 Contributions by state -- Normal cost and actuarially accrued liability
426 words·~2 min read·
/ky/21-525A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
contributions -- Employer costs for hybrid cash balance plan.
(1)The state, by appropriation to the Judicial Retirement Board, shall contribute
annually to the Judicial Retirement System an amount equal to the percent as
computed under subsection (2)(a) of this section of the creditable compensation of
active members of the Judicial Retirement System, to be known as the "normal cost
contribution," and an additional amount computed under subsection (2)(b) of this
section, to be known as the "actuarially accrued liability contribution."
(a)The normal cost contribution shall be determined using:
1. The entry age normal cost funding method;
2. An asset smoothing method that smooths investment gains and losses
over a five
(5)year period; and
3. Other funding methods and assumptions established by the board.
(b)The actuarially accrued liability contribution shall be computed as follows:
1. The total unfunded actuarially accrued liability shall be amortized over a
closed period of twenty
(20)years beginning with the 2023 actuarial
valuation;
2. Any increase or decrease in the unfunded actuarially accrued liability
occurring after the completion of the 2023 actuarial valuation shall be
amortized over a closed period of twenty
(20)years beginning with the
actuarial valuation in which the increase or decrease in the unfunded
actuarially accrued liability is recognized. An increase or decrease in the
unfunded actuarially accrued liability may result from, but not be
limited to, legislative changes to benefits, changes in actuarial methods
or assumptions, or actuarial gains or losses;
3. If the annual valuation determines that the plan has surplus actuarial
assets, the prior amortization bases established under subparagraph 2. of
this paragraph shall be eliminated, and one
(1)base equal to the amount
of surplus actuarial assets shall be established and amortized over an
open period of twenty
(20)years; and
4. The actuarially accrued liability contribution shall be determined by
actuarial methods consistent with the methods prescribed for
determining the normal cost contribution, except that beginning with the
2023 actuarial valuation the level dollar amortization method shall be
utilized.
(c)The board shall adopt the actuarial assumptions that are to be used in making
the determinations.
(3)The normal cost contribution and the actuarially accrued liability contribution for
each fiscal biennium shall be determined on the basis of the actuarial valuation last
preceding the commencement of the biennium.
(4)Employer costs for the hybrid cash balance plan as provided by KRS 21.402 shall
be incorporated into the employer contribution rate of the Legislators' Retirement
Plan and the Judicial Retirement Plan as a new benefit tier within the plans.