67A.320 Pension fund -- Picked-up employee contributions -- Repeal of
1,390 words·~6 min read·
/ky/67a-320A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
ordinances established for creation or maintenance of pension fund --
Liquidation and distribution of residual assets -- Report.
(1)Any urban-county government in which there existed a municipality which had
in effect an employees' pension fund prior to its merger into the urban-county
form of government shall provide by comprehensive plan or ordinance for the
maintenance of the pension fund for those employees covered by the pension
fund, and shall in each case provide for the payment to the pension fund in
each month of the sum necessary to maintain the fund in accordance with the
actuarial principles established by the actuarial studies described in this
section, and may assess monthly the amount or percent of the salary of the
employees as determined on a fair actuarial basis, and in any case not in
excess of nine percent (9%) of the monthly salary of each employee unless a
higher rate was charged prior to the merger of governments, in which case the
higher rate may be charged, the assessment to be deducted from the
employees' salaries or picked up pursuant to subsection
(2)of this section and
paid in cash into the pension fund. Within six
(6)months after the effective date
of the urban-county form of government, or within six
(6)months after June 21,
1974, whichever shall be later, the trustees of the board shall, at the expense
of the pension fund, provide for the performance of an actuarial valuation,
which shall be completed within six
(6)months thereafter, and shall describe
the amounts necessary to be contributed by the urban-county government or
other sources to fund on an actuarially sound basis the benefits promised or
described in the fund, including any payments required to bring the fund to an
actuarially sound position if it was not so at the time of the performance of the
valuation. The legislative body shall determine a reasonable period over which
additional funding, if any, shall be made, which period shall not exceed thirty
(30)years. A similar valuation shall be arranged by the board at the cost of the
urban-county government at least once in every three
(3)year to five
(5)year
period thereafter as prescribed by KRS 65.156. If the fund created by this
section is extended to cover employees not described in the first sentence of
this section, the actuarial valuation shall determine the required payments
necessary to keep the expanded fund on an actuarially sound basis, and the
urban-county government shall maintain the fund, and shall assess against the
additional covered employees the same monthly contribution as required for
other government employees.
(2)The urban-county government 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 picked up shall be treated as
employer contributions in determining tax treatment under the United States
Internal Revenue Code and KRS 141.010. However, the urban-county
government shall continue to withhold federal and state income taxes based
upon these contributions and hold them in a separate account until the Internal
Revenue Service or the federal courts rule that, pursuant to Section 414(h) of
the United States Internal Revenue Code, these contributions shall not be
included as gross income of the employee until such time as the contributions
are distributed or made available to the employee. The picked-up employee
contribution shall satisfy all obligations to the retirement fund 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 urban-county
government 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 urban-county government to the fund. Employee
contributions picked up after August 1, 1982, shall be treated for all purposes
of this section in the same manner and to the same extent as employee
contributions made prior to August 1, 1982.
(3)The pick up of employee contributions by the employer shall not be construed
to reduce the final salary or the average salary upon which the employee
retirement benefit is based.
(4)There is hereby created a board for the existing employees' pension fund and
trustees of that board. Trustees from the pension fund board shall consist of
the mayor, four
(4)members of the legislative body of the urban-county
government selected by the legislative body, the secretary of the Finance and
Administration Cabinet, the director of the Division of Personnel, and three
civil service employees or retirees to be elected to the board by those
employees and retirees covered by the employees' pension fund. If no
employee, retiree, or beneficiary is able or willing to serve on the board
resulting in one
(1)or more vacancies of the three
(3)elected positions, any
such vacancy shall be filled by appointment by the mayor subject to the
approval of the legislative body. In the event that there is no position in the
urban-county government denominated secretary of the Finance and
Administration Cabinet and/or director of the Division of Personnel, the
appointed office of the urban-county government exercising the functions most
closely resembling such office shall serve as trustee.
(5)Temporary employees appointed without examination shall not be compelled
to contribute to any pension fund and shall not be eligible to benefits.
(6)In no year shall the contribution by the urban-county government to the
pension fund, in the manner provided in this section, be less than the total
amount assessed upon and deducted from the salary of the employees.
(7)The trustees of the pension fund shall, at least once every three
(3)months,
report in writing to the mayor the receipts, expenditures, and financial status of
the pension fund, stating the places of deposit of funds, or the character of
investments made, and the mayor shall cause copies of the report to be posted
in at least three
(3)places where urban-county employees frequent and report.
(8)If the urban-county government issues the appropriate order allowing
participation in the County Employees Retirement System alternate
participation plan pursuant to KRS 78.530(3) and 78.531(2), the urban-county
government shall have the right to use assets in the local pension fund, other
than assets necessary to pay benefits to the remaining active members of the
local pension fund and to retirees and their survivors as determined by
actuarial valuation and other than assets payable to the County Employees
Retirement System pursuant to KRS 78.531(2), to assist in the payment of both
the employee's and employer's costs of alternate participation pursuant to KRS
78.530(3)(d).
(9)If all liabilities to all individuals entitled to benefits from the employees' pension
fund have been satisfied, any ordinances established for creation or
maintenance of the fund may be repealed by the majority vote of the duly
elected members of the entire legislative body of the urban-county government.
If repealed, the fund's board of trustees shall, within sixty
(60)days of repeal,
proceed with the liquidation of any residual assets of the fund. All residual
assets liquidated pursuant to this subsection shall be distributed by the board
of trustees to the urban-county government's general fund which shall then
contribute the entire distribution received into the policemen's and firefighters'
retirement fund as a supplemental contribution, so long as the return of assets
complies with federal and state law governing the distribution of assets. The
supplemental contribution provided to the policemen's and firefighters'
retirement fund under this subsection shall be in addition to the contributions
required by KRS 67A.360 to 67A.690 and shall not be used to offset any other
contributions required to be paid to the fund under the provisions of KRS
67A.360 to 67A.690. Within thirty
(30)days following the distribution of residual
assets, the board of trustees of the fund shall as its last act file a complete
report with the legislative body of the urban-county government of the actions
taken to terminate the fund and liquidate residual assets of the fund. Upon
completion of the provisions specified by this subsection, the provisions of KRS
67A.320 to 67A.330 as it relates to the employees' pension fund shall be void.