6.505 Election to participate -- Amendment of benefits and rights -- Contribution --
1,815 words·~8 min read·
/ky/6-505A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Effect on membership in other retirement plans -- Repurchase of Kentucky
Employees Retirement System credit lost by refund.
(a)Each legislator in office on July 1, 1980, may within thirty
(30)days after that
date, and any legislator thereafter taking office may within thirty
(30)days
after the date thereof, elect to make monthly contributions to the Legislators'
Retirement Plan, in an amount equal to five percent (5%) of his or her
monthly creditable compensation, as defined in KRS 61.510(13). The election
shall be effective to establish membership in the plan as of July 1, 1980, or as
of the date from which the thirty
(30)day period is measured, as the case may
be. Provided, however, that any legislator who was in office on July 1, 1980,
and who is in office at the time he or she makes the election may, after the
expiration of the thirty
(30)day period and until May 1, 1982, make the
election, in which event he or she shall pay to the Legislators' Retirement
Plan, for the months between July 1, 1980, and the date of his or her election
such sum as, when added to any member's contribution by him or her that is
transferred from another retirement system under KRS 6.535, will equal the
member's contribution required by this section. If the member makes his or
her election after February 1, 1981, he or she shall in addition pay to the plan
interest on the foregoing sum, at six percent (6%) per annum, calculated as if
the sum consisted of equal monthly payments, one
(1)of which was due at the
end of each month between July 1, 1980, and the date the election was made.
The election shall be addressed to and filed with the secretary of the Finance
and Administration Cabinet and shall constitute an authorization to the
secretary to thereafter cause to be deducted from the member's monthly
creditable compensation an amount equal to five percent (5%) thereof, as a
voluntarily elected contribution by the member towards the funding of the
Legislators' Retirement Plan.
(b)1. For a member who begins participating in the Legislators' Retirement
Plan prior to January 1, 2014, the election shall operate to create an
inviolable contract between such member and the Commonwealth,
guaranteeing to and vesting in the member the rights and benefits
provided for under KRS 6.515 to 6.530.
2. a. For members who begin participating in the Legislators'
Retirement Plan on or after January 1, 2014, the General Assembly
reserves the right to amend, suspend, or reduce the benefits and
rights provided under KRS 6.500 to 6.577 if, in its judgment, the
welfare of the Commonwealth so demands, except that the amount
of benefits the member has accrued at the time of amendment,
suspension, or reduction shall not be affected.
b. For purposes of this subparagraph, the amount of benefits the
member has accrued at the time of amendment, suspension, or
reduction shall be limited to the accumulated account balance the
member has accrued at the time of amendment, suspension, or
reduction.
c. The provisions of this subsection shall not be construed to limit the
General Assembly's authority to change any other benefit or right
specified by KRS 6.500 to 6.577, for members who begin
participating in the Legislators' Retirement Plan on or after January
1, 2014, except the benefits specified by subparagraph 2.b. of this
paragraph.
3. The provisions of this paragraph shall not be construed to limit the
General Assembly's authority to amend, reduce, or suspend the benefits
and rights of members of the Legislators' Retirement Plan as provided by
KRS 6.500 to 6.577 that the General Assembly had the authority to
amend, reduce, or suspend, prior to July 1, 2013.
(c)An election once made under this section either to participate or not to
participate in the Legislators' Retirement Plan, shall be considered to apply to
all future service as a legislator, whether in the same or a different office as a
legislator, and whether or not it is in successive terms.
(d)Notwithstanding the provisions of this subsection:
1. A legislator who becomes a member of the Legislators' Retirement Plan
on or after September 1, 2008, but prior to January 1, 2014, shall make
monthly contributions to the Legislators' Retirement Plan in an amount
equal to six percent (6%) of his or her monthly creditable compensation,
as defined in KRS 61.510(13);
2. A legislator who becomes a member of the Legislators' Retirement Plan
on or after January 1, 2014, shall make monthly contributions to the
Legislators' Retirement Plan in an amount equal to six percent (6%) of
his or her monthly creditable compensation, as defined in KRS
61.510(13), of which:
a. Five percent (5%) of his or her monthly creditable compensation,
as defined in KRS 61.510(13), shall be used to provide funding for
benefits provided under KRS 21.402; and
b. One percent (1%) of his or her monthly creditable compensation,
as defined in KRS 61.510(13), shall be used exclusively to help
fund retiree health benefits as provided by KRS 6.577 and shall not
be refunded to the member if the member withdraws his or her
accumulated account balance as provided by KRS 21.460. The
amounts deducted under this subdivision shall be credited to an
account established pursuant to 26 U.S.C. sec. 401(h), within the
fund established by KRS 6.530.
(2)A legislator entitled to elect membership in the retirement system who failed to
elect membership within thirty
(30)days after taking office may elect membership
not later than August 31, 2005. An election, upon being made pursuant to this
section, shall operate to create an inviolable contract between the member entitled
to elect membership under this subsection and the Commonwealth, guaranteeing to
and vesting in the member the rights and benefits provided for under the terms and
conditions of KRS 6.500 to 6.577.
(3)When any legislator makes a delayed election of membership in the Legislators'
Retirement Plan under subsection
(2)of this section, his or her active membership
in the Kentucky Employees Retirement System shall terminate, as of the date his or
her membership in the Legislators' Retirement Plan becomes effective, and any
credit in the Kentucky Employees Retirement System, earned for service as a
legislator, which he or she then has or which he or she subsequently regains while
being an active member of the Legislators' Retirement Plan, shall be transferred to
and counted as service credit in the Legislators' Retirement Plan, and shall no longer
constitute credit in the Kentucky Employees Retirement System, except for the
purpose of validating any other credit in that system if the member pays the
difference, if any, between the amount transferred from the Kentucky Employees
Retirement System and the actuarial value of the transferred service. However, any
credit he or she then has in the Kentucky Employees Retirement System, earned for
service in any capacity other than a legislator, shall not be affected. No person may
attain credit in more than one
(1)of the retirement plans or systems mentioned in
this section for the same period of service. When credit is transferred from the
Kentucky Employees Retirement System to the Legislators' Retirement Plan, the
Kentucky Employees Retirement System shall transfer to the Legislators'
Retirement Fund an amount equal to the employee's and employer's contributions
attributable to that credit, together with interest on the contributions from the date
made to the date of transfer at the actuarially assumed interest rate of the Kentucky
Employees Retirement System in effect at the time the contributions were made,
compounded annually at that same interest rate.
(4)The state shall, solely for the purpose of compliance with Section 414(h) of the
United States Internal Revenue Code, pick up the employee contributions required
by this section for all compensation earned after August 1, 1982, and the
contributions so picked up shall be treated as employer contributions in determining
tax treatment under the United States Internal Revenue Code and KRS 141.010. The
picked-up employee contribution shall satisfy all obligations to the retirement
system satisfied prior to August 1, 1982, by the employee contribution, and the
picked-up employee contribution shall be in lieu of an employee contribution. The
state shall pay these picked-up employee contributions from the same source of
funds which is used to pay earnings to the employee. The employee shall have no
option to receive the contributed amounts directly instead of having them paid by
the employer to the system. Employee contributions picked up after August 1, 1982,
shall be treated for all purposes of KRS 6.500 to 6.535 in the same manner and to
the same extent as employee contributions made prior to August 1, 1982.
(5)When any legislator elects membership in the Legislators' Retirement Plan in
accordance with this section, his or her active membership in the Kentucky
Employees Retirement System, State Police Retirement System, County Employees
Retirement System, or Teachers' Retirement System shall terminate, as of the date
his or her membership in the Legislators' Retirement Plan becomes effective, and
any credit in such other system or systems, earned for service as a legislator, which
he or she then has or which he or she subsequently regains while being an active
member of the Legislators' Retirement Plan, shall be transferred to and counted as
service credit in the Legislators' Retirement Plan, and shall no longer constitute
credit in such other retirement system except for the purpose of validating any other
credit in that system. However, any credit he or she then has in such other
retirement system, earned for service in any capacity other than a legislator, shall
not be affected. No person may attain credit in more than one
(1)of the retirement
plans or systems mentioned in this section, for the same period of service.
(6)A member of the Legislators' Retirement Plan who would be entitled, under KRS
61.552, to repurchase credit in the Kentucky Employees Retirement System, for
previous service as a legislator, which credit had been lost by refund of
contributions, may pay the amount required by KRS 61.552 directly to the
Legislators' Retirement Plan and thereby obtain credit in that plan for such service,
rather than making payment to the Kentucky Employees Retirement System for
credit which would be transferred to the Legislators' Retirement Plan. In such event,
the Kentucky Employees Retirement System shall transfer to the Legislators'
Retirement Plan an amount equal to the employer's contributions that originally
were made to the Kentucky Employees Retirement System for the regained service
credit, with interest as provided in KRS 6.535. Six
(6)months' current service shall
be required in the Legislators' Retirement Plan in order for the repurchased credit to
remain in force, the same as provided in KRS 61.552. Service purchased under this
subsection on or after January 1, 2014, shall not be used to determine the member's
participation date in the Legislators' Retirement Plan.