95.290 Pension system for police and fire divisions -- Governing bodies -- Repeal of
2,215 words·~10 min read·
/ky/95-290A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
ordinances establishing pension fund -- Liquidation and distribution of
residual assets -- Report -- Distribution of funds -- Administration expenses --
Equal protection for beneficiaries -- Participation by policemen and
firefighters in County Employees Retirement System -- Contributions.
(Effective April 1, 2021)
(1)The city legislative body in cities of the first class may enact ordinances providing
for a system of pensions for retired and disabled members of the police and fire
divisions of the department of public safety and their dependents, may appropriate
funds for the purpose of paying such pensions, may allot and pay to the policemen's
pension fund or the firefighters' pension fund or either or both of them, all fines and
forfeitures imposed upon members of the respective divisions, and may provide for,
assess, and collect contributions from the members for the benefit of the fund.
(a)There shall be a governing body of the policemen's pension fund, and a
governing body of the firefighters' pension fund. The governing bodies of the
respective funds shall hold title to all assets in their respective funds, and shall
have exclusive authority relating to investment of the assets of the funds,
including contracting with investment advisors or managers to perform
investment services as deemed necessary and prudent by the board. A majority
of the governing body of each fund shall be composed of persons receiving
pension benefits from the respective pension systems, and no more than one
(1)member of the city legislative body may be a member of the governing
body of either the policemen's or the firefighters' pension fund, except if there
are fewer than six
(6)active and retired members of the policemen's or the
firefighters' pension fund, the governing body of the pension fund shall be
composed of the mayor, city treasurer or chief financial officer, and two
employees appointed by the mayor from the city's respective police
department or fire department. To be effective, an action of the governing
body of a fund shall require only a simple majority of the votes cast at a
properly convened meeting of the governing body where a quorum is present,
with a quorum being a majority of the members of a governing body.
(b)If there are fewer than twelve
(12)active and retired members or beneficiaries
of the policemen's or the firefighters' pension fund, the governing body of the
fund may elect to offer to individuals entitled to benefits from the fund a one
(1)time irrevocable option to convert monthly pension benefits from the fund
to monthly annuity benefits from an insurance company for the same amount.
An insurance company accepting a benefit transfer shall honor any features
and options available under the existing plan. If the governing body of the
fund elects to offer the option to convert monthly pension benefits to monthly
annuity benefits, it shall provide to individuals entitled to benefits from the
fund sufficiently complete and appropriate disclosures to assist in making an
informed decision.
(c)If all liabilities to all individuals entitled to benefits from the policemen's
pension fund or firefighters' pension fund have been satisfied, the ordinances
establishing the fund may be repealed by the majority vote of the duly elected
members of the entire legislative body. If repealed, the governing body of the
policemen's or firefighters' pension fund 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 paragraph shall be distributed by the
governing body to the city's general fund provided the return of assets
complies with federal and state law governing the distribution of assets.
Within thirty
(30)days following the distribution of residual assets, the
governing body of the fund shall as its last act file a complete report with the
legislative body of the city, for retention by the city clerk the same as for other
city records, of the actions taken to dissolve the fund and liquidate residual
assets of the fund.
(3)Any policemen's pension fund or any firefighters' pension fund established under
the provisions of this section shall be held or distributed for, and only for, any of the
following purposes of the respective fund as applicable:
(a)Paying pensions, and any bonus payments under applicable ordinances;
(b)Making payments to the city for transfer to the County Employees Retirement
System for alternate participation pursuant to KRS 78.530(3)(a) and 78.531(2)
or for the distribution of residual assets in the event the fund is dissolved
pursuant to subsection (2)(c) of this section;
(c)Making payments to the city for transfer to an insurance company for
conversion of monthly pension benefits to monthly annuity benefits as
provided in subsection (2)(b) of this section;
(d)Transferring pension assets through investment contract or other financial
instrument for the purpose of amortizing unfunded service liabilities; and
(e)Payment from the city to the County Employees Retirement System for future
pension contributions required pursuant to KRS 61.702 and 78.635.
Pursuant to the terms of this section, if policemen of the city of the first class elect
entry into the County Employees Retirement System and thereby create excess
funds over those required to provide for the purposes set forth in paragraphs (a), (b),
(c), (d), and
(e)of this subsection, these excess funds shall be distributed to the city
for use by the city for any other purpose it may elect, including but not limited to
the establishment of a reserve for payment under paragraph
(e)of this subsection.
The governing board of the fund may annually expend for the necessary expenses
connected with the fund, including but not limited to expenses for medical,
actuarial, accounting, and legal services, the amount such governing board deems
proper.
(f)Payment from the city to the County Employees Retirement System for future
pension contributions required pursuant to KRS 61.702 and 78.635. Pursuant
to the terms of this section, if firefighters of the city of the first class elect
entry into the County Employees Retirement System and thereby create excess
funds over those required to provide for the purposes set forth in paragraphs
(a), (b), (c), (d), and
(e)of this subsection, these excess funds shall be
distributed according to the terms of an agreement negotiated between the city
and the union organization representing the firefighters. The city may use its
share of the distributed excess funds for any purpose it may elect, including
but not limited to the establishment of a reserve for payment under paragraph
(f)of this subsection.
(a)The governing body of each pension fund shall ensure that all of the assets in
the fund are distributed for the purposes in subsection
(3)of this section, and
only for these purposes. If in any calendar year the assets in either fund exceed
those needed for the actuarial liability for payment of pension benefits and any
anticipated liabilities under subsection (3)(b) and
(d)of this section, the
legislative body of the city establishing the pension system shall ensure by
pension bonus ordinance that a portion of these excess funds be distributed in
an equitable manner to all eligible pension recipients. Nothing in this
subsection shall be construed to require any change to be made to any pension
ordinance as it exists on July 15, 1998.
(b)The governing board of either fund may annually expend for the necessary
expenses connected with the fund, including but not limited to expenses for
medical, actuarial, accounting, and legal or other professional services, the
amount such governing board deems proper.
(5)Any ordinance establishing a pension fund under this section shall make equitable
provision for the rights of persons having an interest in assets transferred to the fund
from any fund heretofore established by statute.
(6)To assure equal protection for the beneficiaries of either fund, any action taken by
the city executive or legislative body in cities of the first class that affects a
policemen's pension fund or a firefighters' pension fund established under this
section shall, to the maximum extent permitted by law, treat each fund in a uniform
manner and shall not cause any change to be made to the structure or operation of
either fund, whether through legislation, litigation, compromise, settlement, or
otherwise, unless any proposed change is offered to the other fund before it takes
effect. Nothing in this subsection shall be construed to require any change to be
made to any pension ordinance as it exists on July 15, 1998.
(7)The legislative body in a city of the first class shall issue the appropriate order,
pursuant to KRS 78.530(1), directing participation for policemen in the County
Employees Retirement System. All new employees who would have been granted
membership in the local policemen's pension system shall be members of the
County Employees Retirement System. All active members of the local policemen's
pension system at the time of transition to the County Employees Retirement
System may choose membership in the County Employees Retirement System or
may retain membership in the local system. The city shall elect the alternate
participation plan, pursuant to KRS 78.530(3), for policemen who transfer to the
County Employees Retirement System. Notwithstanding the provisions of KRS
78.530(3)(b), the city may, at its option, extend the payment period for the cost of
alternate participation to a maximum of twenty
(20)years with the interest at the
rate actuarially assumed by the board. The city 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 policemen's pension system and to retirees and their
survivors as determined by actuarial valuation, to assist in the payment of the
annual installment cost of alternate participation. All policemen who become
members of the County Employees Retirement System pursuant to this section shall
be granted hazardous duty coverage, and the city may, at its option, purchase
accumulated sick leave for each policeman upon retirement pursuant to KRS
78.616.
(8)The legislative body in a city of the first class may issue the appropriate order,
pursuant to KRS 78.530(1), directing participation for firefighters in the County
Employees Retirement System. In the event that the legislative body in a city of the
first class issues such an order, then all new employees who would have been
granted membership in the local firefighters' pension system shall be members of
the County Employees Retirement System. All active members of the local
firefighters' pension system at the time of transition to the County Employees
Retirement System may choose membership in the County Employees Retirement
System or may retain membership in the local system. The city shall elect the
alternate participation plan, pursuant to KRS 78.530(3), for firefighters who transfer
to the County Employees Retirement System. Notwithstanding the provisions of
KRS 78.530(3)(b), the city may, at its option, extend the payment period for the cost
of alternate participation to a maximum of twenty
(20)years with the interest at the
rate actuarially assumed by the board. The city shall have the right to use assets in
the local firefighters' pension fund, other than assets necessary to pay benefits to the
remaining active members of the local firefighters' pension system and to retirees
and their survivors as determined by actuarial valuation, to assist in the payment of
the annual installment cost of alternate participation. After certification by the
County Employees Retirement System of eligibility for hazardous duty coverage,
each firefighter who becomes a member of the County Employees Retirement
System pursuant to this section shall be granted hazardous duty coverage.
(9)Notwithstanding the provisions of KRS 61.702 and 78.635, which relate to the
contributions required of participating employers, any city of the first class
participating in the County Employees Retirement System hazardous duty pension
plan which has in effect a collective bargaining agreement with a group of
employees who participate in said plan, shall have the right to enter into agreement
with its employees or with their respective collective bargaining representatives.
This agreement may include but is not limited to specifications of what portion of
the required employer contribution shall be borne by the participating employer and
what portion shall be borne by the participating employee. This provision in no way
modifies the employer's obligation to remit the contributions required by the County
Employees Retirement System pursuant to KRS 61.702 and 78.635, whether such
contributions are borne by the city or by its participating employees.
(10)With regard to the employer participation or employer contributions pursuant to
KRS 61.702 and 78.635 as it relates to future pension contribution requirements or
as it relates to payback period or interest charge for service liability cost under
alternate participation, if any statute or any resolution of the appropriate state board
of trustees having authority over employer participation or employer contribution grants any terms or conditions to any city of the home rule class, or to any county, or to any urban-county government, which are more favorable in terms of participation than terms or conditions granted to any city of the first class, then said provisions for employer participation or contribution shall be available to the city of the first class, at its option and effective upon adoption by the city of the first class and notification to the County Employees Retirement System.