6.518 Limitations and exclusions on increases in creditable compensation in last
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/ky/6-518A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
five years of service in General Assembly for members retiring on or after
January 1, 2018 -- Exceptions for bona fide promotion or career development -
- Exclusion -- Determination by board -- Administrative regulations --
Inapplicability to hybrid cash balance participants.
(1)For purposes of this section, "bona fide promotion or career advancement":
(a)Means a professional advancement in substantially the same line of work held
by the member in the four
(4)years immediately prior to the final five
annual years preceding retirement or a change in employment position based
on the training, skills, education, or expertise of the member that imposes a
significant change in job duties and responsibilities to clearly justify the
increased compensation to the member; and
(b)Does not include any circumstance in which a legislator participating in the
Legislators' Retirement Plan takes a position of employment with an employer
participating in any of the other state-administered retirement systems.
(a)For members retiring on or after January 1, 2018, the plan shall, for each of
the retiring member's last five
(5)annual years of service in the General
Assembly or with any employer participating in any of the state-administered
retirement systems, identify any annual year in which the creditable
compensation used to calculate benefits in the Legislators' Retirement Plan
increased at a rate of ten percent (10%) or more annually over the immediately
preceding annual year's creditable compensation.
(b)Except as limited or excluded by subsections
(3)and
(4)of this section, any
amount of increase in creditable compensation for an annual year identified
under paragraph
(a)of this subsection that exceeds ten percent (10%) more
than the member's creditable compensation from the immediately preceding
annual year shall not be included in the creditable compensation used to
calculate the member's monthly pension benefits. If the creditable
compensation for a specific annual year identified under paragraph
(a)of this
subsection as exceeding the ten percent (10%) increase limitation is not used
to calculate the retiring member's monthly pension benefits, then no reduction
in creditable compensation shall occur for that annual year. Reductions to
creditable compensation as provided by this paragraph shall include any
creditable compensation used to calculate the retiring member's benefits,
including creditable compensation earned in another state-administered
retirement system.
(c)If the creditable compensation of the retiring member is reduced as provided
by paragraph
(b)of this subsection, the retirement system shall,
notwithstanding KRS 21.460 and as applicable, refund the member
contributions attributable to the reduction in creditable compensation.
(3)In order to ensure the prospective application of the limitations on increases in
creditable compensation contained in subsection
(2)of this section, only the
creditable compensation earned by the retiring member on or after July 1, 2017,
shall be subject to reduction under subsection
(2)of this section. Creditable
compensation earned by the retiring member prior to July 1, 2017, shall not be
subject to reduction under subsection
(2)of this section.
(4)Subsections
(2)and
(3)of this section shall not apply to increases that are the direct
result of a bona fide promotion or career advancement.
(5)The Judicial Form Retirement System board of trustees shall determine whether
increases in creditable compensation during the last five
(5)annual years of
employment prior to retirement constitute a bona fide promotion or career
advancement and may promulgate administrative regulations in accordance with
KRS Chapter 13A to administer this section. All state-administered retirement
systems shall cooperate to implement this section.
(6)This section shall not apply to employees participating in the hybrid cash balance
plan as provided by KRS 21.402.