61.637 Suspension of retirement payments on reemployment -- Reinstatement --
4,207 words·~19 min read·
/ky/61-637A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Recomputation of allowance -- Waiver of provisions in certain instances --
Reemployment in a different position -- Effect of reemployment of retired
member -- Retired member serving as volunteer, independent contractor, or
leased employee -- Effect of reelection for same office -- Resignation not
required of certain mayors and city legislative body members to draw benefits
-- Certification of absence of prearranged agreement or qualification as
independent contractor or leased employee -- Forms.
(1)A retired member who is receiving monthly retirement payments under any of the
provisions of KRS 61.510 to 61.705 and 78.510 to 78.852 and who is reemployed
as an employee by a participating agency prior to August 1, 1998, shall have his or
her retirement payments suspended for the duration of reemployment. Monthly
payments shall not be suspended for a retired member who is reemployed if he or
she anticipates that he or she will receive less than the maximum permissible
earnings as provided by the Federal Social Security Act in compensation as a result
of reemployment during the calendar year. The payments shall be suspended at the
beginning of the month in which the reemployment occurs.
(2)Employer and employee contributions shall be made as provided in KRS 61.510 to
61.705 and 78.510 to 78.852 on the compensation paid during reemployment,
except where monthly payments were not suspended as provided in subsection
of this section or would not increase the retired member's last monthly retirement
allowance by at least one dollar ($1), and the member shall be credited with
additional service credit.
(3)In the month following the termination of reemployment, retirement allowance
payments shall be reinstated under the plan under which the member was receiving
payments prior to reemployment.
(a)Notwithstanding the provisions of this section, the payments suspended in
accordance with subsection
(1)of this section shall be paid retroactively to the
retired member, or his or her estate, if he or she does not receive more than
the maximum permissible earnings as provided by the Federal Social Security
Act in compensation from participating agencies during any calendar year of
reemployment.
(b)If the retired member is paid suspended payments retroactively in accordance
with this section, employee contributions deducted during his or her period of
reemployment, if any, shall be refunded to the retired employee, and no
service credit shall be earned for the period of reemployment.
(c)If the retired member is not eligible to be paid suspended payments for his or
her period of reemployment as an employee, his or her retirement allowance
shall be recomputed under the plan under which the member was receiving
payments prior to reemployment as follows:
1. The retired member's final compensation shall be recomputed using
creditable compensation for his or her period of reemployment;
however, the final compensation resulting from the recalculation shall
not be less than that of the member when his or her retirement allowance
was last determined;
2. If the retired member initially retired on or subsequent to his or her
normal retirement date, his or her retirement allowance shall be
recomputed by using the formula in KRS 61.595(1);
3. If the retired member initially retired prior to his or her normal
retirement date, his or her retirement allowance shall be recomputed
using the formula in KRS 61.595(2), except that the member's age used
in computing benefits shall be his or her age at the time of his or her
initial retirement increased by the number of months of service credit
earned for service performed during reemployment;
4. The retirement allowance payments resulting from the recomputation
under this subsection shall be payable in the month following the
termination of reemployment in lieu of payments under subparagraph 3.
of this paragraph. The member shall not receive less in benefits as a
result of the recomputation than he or she was receiving prior to
reemployment or would receive as determined under KRS 61.691; and
5. Any retired member who was reemployed prior to March 26, 1974, shall
begin making contributions to the system in accordance with the
provisions of this section on the first day of the month following March
26, 1974.
(5)A retired member, or his or her estate, shall pay to the retirement fund the total
amount of payments which are not suspended in accordance with subsection
(1)of
this section if the member received more than the maximum permissible earnings as
provided by the Federal Social Security Act in compensation from participating
agencies during any calendar year of reemployment, except the retired member or
his or her estate may repay the lesser of the total amount of payments which were
not suspended or fifty cents ($0.50) of each dollar earned over the maximum
permissible earnings during reemployment if under age sixty-five (65), or one
dollar ($1) for every three dollars ($3) earned if over age sixty-five (65).
(a)"Reemployment" or "reinstatement" as used in this section shall not include a
retired member who has been ordered reinstated by the Personnel Board under
authority of KRS 18A.095.
(b)1. A retired member who has been ordered reinstated without loss of pay
by the Personnel Board under authority of KRS 18A.095 or by court
order or by order of the Kentucky Commission on Human Rights and
accepts employment by an agency participating in the Kentucky
Employees Retirement System, State Police Retirement System, or
County Employees Retirement System shall void his or her retirement
by reimbursing the system in the full amount of his or her retirement
allowance payments received, including any health insurance benefits
paid to or on behalf of the member.
2. Within twelve
(12)months of the date of the final order of the Personnel
Board, the Kentucky Commission on Human Rights, or the court, the
member shall repay the system the full amount of his or her retirement
allowance payments and health insurance benefits by lump sum or enter
into an agreement with the Authority for repayment by installments.
3. Once the system has been fully reimbursed for the benefits paid to the
member and on the member's behalf, additional contributions and
service credit based on the reinstated employment shall be added to the
member's account.
(a)Effective August 1, 1998, the provisions of subsections
(1)to
(4)of this
section shall no longer apply to a retired member who is reemployed in a
position covered by the same retirement system from which the member
retired. Reemployed retired members shall be treated as new members upon
reemployment. Any retired member whose reemployment date preceded
August 1, 1998, who does not elect, within sixty
(60)days of notification by
the retirement systems, to remain under the provisions of subsections
(1)to
(4)of this section shall be deemed to have elected to participate under this
subsection.
(b)A retired member whose disability retirement was discontinued pursuant to
KRS 61.615 and who is reemployed in one
(1)of the systems administered by
the Kentucky Retirement Systems or County Employees Retirement System
prior to his or her normal retirement date shall have his or her accounts
combined upon termination for determining eligibility for benefits. If the
member is eligible for retirement, the member's service and creditable
compensation earned as a result of his or her reemployment shall be used in
the calculation of benefits, except that the member's final compensation shall
not be less than the final compensation last used in determining his or her
retirement allowance. The member shall not change beneficiary or payment
option designations. This provision shall apply to members reemployed on or
after August 1, 1998.
(8)If a retired member accepts employment or begins serving as a volunteer with an
employer participating in the systems administered by Kentucky Retirement
Systems or County Employees Retirement System within twelve
(12)months of his
or her retirement date, the retired member shall notify the Authority and the
participating employer shall submit the information required or requested by the
Authority to confirm the individual's employment or volunteer status. The retired
member shall not be required to notify the Authority regarding any employment or
volunteer service with a participating agency that is accepted after twelve
months following his or her retirement date.
(9)If the retired member is under a contract to provide services as an independent
contractor or leased employee to an employer participating in the systems
administered by Kentucky Retirement Systems or County Employees Retirement
System within twelve
(12)months of his or her retirement date, the member shall
submit a copy of that contract to the Authority, and the Authority shall determine if
the member is an independent contractor or leased employee for purposes of
retirement benefits. The retired member and the participating employer shall submit
the information required or requested by the Authority to confirm the individual's
status as an independent contractor or leased employee. The retired member shall
not be required to notify the Authority regarding any services entered into as an
independent contractor or leased employee with a participating agency that the
employee enters into after twelve
(12)months following his or her retirement date.
(10)If a member is receiving a retirement allowance, or has filed the forms required for
a retirement allowance, and is employed within one
(1)month of the member's
initial retirement date in a position that is required to participate in the same
retirement system from which the member retired, the member's retirement shall be
voided and the member shall repay to the retirement system all benefits received.
The member shall contribute to the member account established for him or her prior
to his or her voided retirement. The retirement allowance for which the member
shall be eligible upon retirement shall be determined by total service and creditable
compensation.
(a)If a member of the Kentucky Employees Retirement System retires from a
department which participates in more than one
(1)retirement system and is
reemployed within one
(1)month of his or her initial retirement date by the
same department in a position participating in another retirement system, the
retired member's retirement allowance shall be suspended for the first month
of his or her retirement, and the member shall repay to the retirement system
all benefits received for the month.
(b)A retired member of the County Employees Retirement System who after
initial retirement is hired by the county from which the member retired shall
be considered to have been hired by the same employer.
(a)If a hazardous member who retired prior to age fifty-five (55), or a
nonhazardous member who retired prior to age sixty-five (65), is reemployed
within six
(6)months of the member's termination by the same employer, the
member shall obtain from his or her previous and current employers a copy of
the job description established by the employers for the position and a
statement of the duties performed by the member for the position from which
he or she retired and for the position in which he or she has been reemployed.
(b)The job descriptions and statements of duties shall be filed with the retirement
office.
(13)If the retirement system determines that the retired member has been employed in a
position with the same principal duties as the position from which the member
retired:
(a)The member's retirement allowance shall be suspended during the period that
begins on the month in which the member is reemployed and ends six
months after the member's termination;
(b)The retired member shall repay to the retirement system all benefits paid from
systems administered by Kentucky Retirement Systems or County Employees
Retirement System under reciprocity, including medical insurance benefits,
that the member received after reemployment began;
(c)Upon termination, or subsequent to expiration of the six
(6)month period
from the date of termination, the retired member's retirement allowance based
on his or her initial retirement account shall no longer be suspended, and the
member shall receive the amount to which he or she is entitled, including an
increase as provided by KRS 61.691;
(d)Except as provided in subsection
(7)of this section, if the position in which a
retired member is employed after initial retirement is a regular full-time
position, the retired member shall contribute to a second member account
established for him or her in the retirement system. Service credit gained after
the member's date of reemployment shall be credited to the second member
account; and
(e)Upon termination, the retired member shall be entitled to benefits payable
from his or her second retirement account.
(a)If the retirement system determines that the retired member has not been
reemployed in a position with the same principal duties as the position from
which he or she retired, the retired member shall continue to receive his or her
retirement allowance.
(b)If the position is a regular full-time position, the member shall contribute to a
second member account in the retirement system.
(a)If a retired member is reemployed at least one
(1)month after initial
retirement in a different position, or at least six
(6)months after initial
retirement in the same position, and prior to normal retirement age, the retired
member shall contribute to a second member account in the retirement system
and continue to receive a retirement allowance from the first member account.
(b)Service credit gained after reemployment shall be credited to the second
member account. Upon termination, the retired member shall be entitled to
benefits payable from the second member account.
(16)A retired member who is reemployed and contributing to a second member account
shall not be eligible to purchase service credit under any of the provisions of KRS
16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852 which he or she was
eligible to purchase prior to his or her initial retirement.
(17)Notwithstanding any provision of subsections
(1)to (7)(a) and
(10)to
(15)of this
section, the following shall apply to retired members who are reemployed by an
agency participating in one
(1)of the systems administered by Kentucky
Retirement Systems or County Employees Retirement System on or after
September 1, 2008:
(a)If a member is receiving a retirement allowance from one
(1)of the systems
administered by Kentucky Retirement Systems or County Employees
Retirement System, or has filed the forms required to receive a retirement
allowance from one
(1)of the systems administered by Kentucky Retirement
Systems or County Employees Retirement System, and is employed in a
regular full-time position required to participate in one
(1)of the systems
administered by Kentucky Retirement Systems or County Employees
Retirement System or is employed in a position that is not considered regular
full-time with an agency participating in one
(1)of the systems administered
by Kentucky Retirement Systems or County Employees Retirement System
within one
(1)month following the member's initial retirement date, the
member's retirement shall be voided, and the member shall repay to the
retirement system all benefits received, including any health insurance
benefits. If the member is returning to work in a regular full-time position
required to participate in one
(1)of the systems administered by Kentucky
Retirement Systems:
1. The member shall contribute to a member account established for him or
her in one
(1)of the systems administered by Kentucky Retirement
Systems or County Employees Retirement System, and employer
contributions shall be paid on behalf of the member by the participating
employer; and
2. Upon subsequent retirement, the member shall be eligible for a
retirement allowance based upon total service and creditable
compensation, including any additional service or creditable
compensation earned after his or her initial retirement was voided;
(b)If a member is receiving a retirement allowance from one
(1)of the systems
administered by Kentucky Retirement Systems or County Employees
Retirement System and is employed in a regular full-time position required to
participate in one
(1)of the systems administered by Kentucky Retirement
Systems or County Employees Retirement System after a one
(1)month
period following the member's initial retirement date, the member may
continue to receive his or her retirement allowance during the period of
reemployment subject to the following provisions:
1. If a member is reemployed by a participating agency within twelve
months of the member's retirement date, the participating agency shall
certify in writing on a form prescribed by the Authority that no
prearranged agreement existed between the employee and agency prior
to the employee's retirement for the employee to return to work with the
participating agency. If an elected official is reelected to a new term of
office in the same position as the elected official held prior to retirement
and takes office within twelve
(12)months of his or her retirement date,
he or she shall be deemed by the Authority as having a prearranged
agreement under the provisions of this subparagraph and shall have his
or her retirement voided. If the participating agency fails to complete the
certification, the member's retirement shall be voided and the provisions
of paragraph
(a)of this subsection shall apply to the member and the
employer. Employment that is accepted by the retired member after
twelve
(12)months following the member's retirement date shall not
constitute a prearranged agreement under this paragraph;
2. Notwithstanding any other provision of KRS Chapter 16, 61, or 78 to
the contrary, the member shall not contribute to the systems and shall
not earn any additional benefits for any work performed during the
period of reemployment;
3. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and
except for any retiree employed as a school resource officer as defined
by KRS 158.441 or as a Kentucky guardian as defined by KRS
158.4431, the employer shall pay employer contributions as specified by
KRS 61.565, 61.702, and 78.635, as applicable, on all creditable
compensation earned by the employee during the period of
reemployment. The additional contributions paid shall be used to reduce
the unfunded actuarial liability of the systems; and
4. Except as provided by KRS 70.291 to 70.293, 95.022, and 164.952 and
except for any retiree employed as a school resource officer as defined
by KRS 158.441 or as a Kentucky guardian as defined by KRS
158.4431, the employer shall be required to reimburse the systems for
the cost of the health insurance premium paid by the systems to provide
coverage for the retiree, not to exceed the cost of the single premium.
Effective July 1, 2015, local school boards shall not be required to pay
the reimbursement required by this subparagraph for retirees employed
by the board for eighty
(80)days or less during the fiscal year. Effective
August 1, 2024, the Department of Education shall pay for the health
reimbursements required by this subparagraph for a retiree who
participated in a hazardous position prior to July 1, 2003, in one
(1)of
the systems administered by the Kentucky Retirement Systems or the
County Employees Retirement System, and who is reemployed by a
local school board;
(c)Notwithstanding paragraphs
(a)and
(b)of this subsection, a retired member
who qualifies as a volunteer for an employer participating in one
(1)of the
systems administered by Kentucky Retirement Systems or County Employees
Retirement System and who is receiving reimbursement of actual expenses, a
nominal fee for his or her volunteer services, or both, shall not be considered
an employee of the participating employer and shall not be subject to
paragraphs
(a)and
(b)of this subsection if:
1. Prior to the retired member's most recent retirement date, he or she did
not receive creditable compensation from the participating employer in
which the retired member is performing volunteer services;
2. Any reimbursement or nominal fee received prior to the retired
member's most recent retirement date has not been credited as creditable
compensation to the member's account or utilized in the calculation of
the retired member's benefits;
3. The retired member has not purchased or received service credit under
any of the provisions of KRS 61.510 to 61.705 or 78.510 to 78.852 for
service with the participating employer for which the retired member is
performing volunteer services; and
4. Other than the status of volunteer, the retired member does not become
an employee, leased employee, or independent contractor of the
employer for which he or she is performing volunteer services for a
period of at least twelve
(12)months following the retired member's
most recent retirement date.
If a retired member, who provided volunteer services with a participating
employer under this paragraph violates any provision of this paragraph, then
he or she shall be deemed an employee of the participating employer as of the
date he or she began providing volunteer services and both the retired member
and the participating employer shall be subject to paragraphs
(a)and
(b)of
this subsection for the period of volunteer service;
(d)Notwithstanding any provision of this section, any mayor or member of a city
legislative body shall not be required to resign from his or her position as
mayor or as a member of the city legislative body in order to begin drawing
benefits from the systems administered by Kentucky Retirement Systems or
subject to any provision of this section as it relates solely to his or her service
as a mayor or member of the city legislative body if the mayor or member of a
city legislative body:
1. Has not participated in the County Employees Retirement System prior
to retirement, but is otherwise eligible to retire from the Kentucky
Employees Retirement System or the State Police Retirement System; or
2. Has been or is participating in the County Employees Retirement
System and is at least sixty-two
(62)years of age. If a mayor or member
of a city legislative body who is at least sixty-two
(62)years of age
retires from the systems administered by Kentucky Retirement Systems
but remains in office after his or her effective retirement date, the mayor
or member of the city legislative body shall not accrue any further
service credit or benefits in the systems administered by Kentucky
Retirement Systems for any employment occurring on or after the
effective retirement date;
(e)Notwithstanding any provision of this section, any current or future part-time
adjunct instructor for the Kentucky Fire Commission who has not participated
in the Kentucky Employees Retirement System prior to retirement, but who is
otherwise eligible to retire from the County Employees Retirement System,
shall not be:
1. Required to resign from his or her position as a part-time adjunct
instructor for the Kentucky Fire Commission in order to begin drawing
benefits from the County Employees Retirement System; or
2. Subject to any provision of this section as it relates solely to his or her
service as a part-time adjunct instructor for the Kentucky Fire
Commission;
(f)If a member is receiving a retirement allowance from any of the retirement
systems administered by the Kentucky Retirement Systems or County
Employees Retirement System and enters into a contract or becomes a leased
employee of an employer under contract with an employer participating in
one
(1)of the systems administered by the Kentucky Retirement Systems or
County Employees Retirement System:
1. At any time following retirement, if the Authority determines the
employment arrangement does qualify as an independent contractor or
leased employee, the member may continue to receive his or her
retirement allowance during the period of the contract;
2. Within one
(1)month following the member's initial retirement date, if
the Authority determines the employment arrangement does not qualify
as an independent contractor or leased employee, the member's
retirement shall be voided in accordance with paragraph
(a)of this
subsection;
3. After one
(1)month but within twelve
(12)months following the
member's initial retirement, if the Authority determines the employment
arrangement does not qualify as an independent contractor or leased
employee and that a prearranged agreement existed between the member
and the agency for the member to return to work with the agency, the
member's retirement shall be voided in accordance with paragraph
(a)of
this subsection;
4. After a twelve
(12)month period following the member's initial
retirement, the member may continue to receive his or her retirement
allowance during the period of the contract and the member shall not be
required to notify the system or submit any documentation for purposes
of this section to the system; and
5. After twelve
(12)months or more following the retired member's
retirement date, the initiation of a contract or the initial date of the
leased employment of a retired member by a participating agency shall
not constitute a prearranged agreement under this subsection; and
(g)The Authority shall issue a final determination regarding a certification of the
absence of a prearranged agreement or the retired member's qualification as
an independent contractor or leased employee as required under this section
no later than thirty
(30)days after the retired member and participating
employer provide all required forms and additional information required by
the Authority.
(18)The Authority shall promulgate administrative regulations to implement the
requirements of this section, including incorporating by reference board-prescribed
forms that a retired member and participating agency shall provide the systems
under subsections (8), (9), and
(17)of this section.