161.220 Definitions for KRS 161.220 to 161.716 and 161.990.
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/ky/chapter-161/161-220A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
As used in KRS 161.220 to 161.716 and 161.990:
(1)"Retirement system" means the arrangement provided for in KRS 161.220 to
161.716 and 161.990 for payment of allowances to members;
(2)"Retirement allowance" means the amount annually payable during the course of
his or her natural life to a member who has been retired by reason of service;
(3)"Disability allowance" means the amount annually payable to a member retired by
reason of disability;
(4)"Member" means the commissioner of education, deputy commissioners, associate
commissioners, and all division directors in the State Department of Education,
employees participating in the system pursuant to KRS 196.167(3)(b)1., and any
full-time teacher or professional occupying a position requiring certification or
graduation from a four
(4)year college or university, as a condition of employment,
and who is employed by public boards, institutions, or agencies as follows:
(a)Local boards of education and public charter schools if the public charter
school satisfies the criteria set by the Internal Revenue Service to participate
in a governmental retirement plan;
(b)Eastern Kentucky University, Kentucky State University, Morehead State
University, Murray State University, Western Kentucky University, and any
community colleges established under the control of these universities;
(c)State-operated secondary area vocational education or area technology
centers, Kentucky School for the Blind, and Kentucky School for the Deaf;
(d)Other public education agencies as created by the General Assembly and
those members of the administrative staff of the Teachers' Retirement System
of the State of Kentucky whom the board of trustees may designate by
administrative regulation;
(e)Regional cooperative organizations formed by local boards of education or
other public educational institutions listed in this subsection, for the purpose
of providing educational services to the participating organizations;
(f)All full-time members of the staffs of the Kentucky Association of School
Administrators, Kentucky Education Association, Kentucky Vocational
Association, Kentucky High School Athletic Association, Kentucky
Academic Association, and the Kentucky School Boards Association who
were members of the Kentucky Teachers' Retirement System or were
qualified for a position covered by the system at the time of employment by
the association in the event that the board of directors of the respective
association petitions to be included. The board of trustees of the Kentucky
Teachers' Retirement System may designate by resolution whether part-time
employees of the petitioning association are to be included. The state shall
make no contributions on account of these employees, either full-time or part-
time. The association shall make the employer's contributions, including any
contribution that is specified under KRS 161.550. The provisions of this
paragraph shall be applicable to persons in the employ of the associations on
or subsequent to July 1, 1972;
(g)Employees of the Council on Postsecondary Education who were employees
of the Department for Adult Education and Literacy and who were members
of the Kentucky Teachers' Retirement System at the time the department was
transferred to the council pursuant to Executive Order 2003-600;
(h)The Office of Career and Technical Education;
(i)The Office of Vocational Rehabilitation;
(j)The Kentucky Educational Collaborative for State Agency Children;
(k)The Governor's Scholars Program;
(l)Any person who is retired for service from the retirement system and is
reemployed by an employer identified in this subsection in a position that the
board of trustees deems to be a member, except that any person who becomes
a member on or after January 1, 2022, and subsequently draws a monthly
lifetime retirement allowance, shall upon reemployment after retirement not
earn a second retirement account;
(m)Employees of the former Cabinet for Workforce Development who are
transferred to the Kentucky Community and Technical College System and
who occupy positions covered by the Kentucky Teachers' Retirement System
shall remain in the Teachers' Retirement System. New employees occupying
these positions, as well as newly created positions qualifying for Teachers'
Retirement System coverage that would have previously been included in the
former Cabinet for Workforce Development, shall be members of the
Teachers' Retirement System;
(n)Effective January 1, 1998, employees of state community colleges who are
transferred to the Kentucky Community and Technical College System shall
continue to participate in federal old age, survivors, disability, and hospital
insurance, and a retirement plan other than the Kentucky Teachers' Retirement
System offered by Kentucky Community and Technical College System. New
employees occupying positions in the Kentucky Community and Technical
College System as referenced in KRS 164.5807(5) that would not have
previously been included in the former Cabinet for Workforce Development,
shall participate in federal old age, survivors, disability, and hospital
insurance and have a choice at the time of employment of participating in a
retirement plan provided by the Kentucky Community and Technical College
System, including participation in the Kentucky Teachers' Retirement System,
on the same basis as faculty of the state universities as provided in KRS
161.540 and 161.620;
(o)Employees of the Office of General Counsel, the Office of Budget and
Administrative Services, and the Office of Quality and Human Resources
within the Office of the Secretary of the former Cabinet for Workforce
Development and the commissioners of the former Department for Adult
Education and Literacy and the former Department for Technical Education
who were contributing to the Kentucky Teachers' Retirement System as of
July 15, 2000;
(p)Employees of the Kentucky Department of Education only who are graduates
of a four
(4)year college or university, notwithstanding a substitution clause
within a job classification, and who are serving in a professional job
classification as defined by the department;
(q)The Governor's School for Entrepreneurs Program;
(r)Employees of the Office of Adult Education within the Department of
Workforce Development in the Education and Labor Cabinet who were
employees of the Council on Postsecondary Education, Kentucky Adult
Education Program and who were members of the Kentucky Teachers'
Retirement System at the time the Program was transferred to the cabinet
pursuant to Executive Orders 2019-0026 and 2019-0027;
(s)Employees of the Education Professional Standards Board who were
members of the Kentucky Teachers' Retirement System at the time the
employees were transferred to the Kentucky Department of Education
pursuant to Executive Order 2020-590; and
(t)WeLeadCS, the virtual computer science career academy established in KRS
158.809;
(5)"Present teacher" means any teacher who was a teacher on or before July 1, 1940,
and became a member of the retirement system created by 1938 (1st Extra. Sess.)
Ky. Acts ch. 1, on the date of the inauguration of the system or within one
(1)year
after that date, and any teacher who was a member of a local teacher retirement
system in the public elementary or secondary schools of the state on or before July
1, 1940, and continued to be a member of the system until he or she, with the
membership of the local retirement system, became a member of the state Teachers'
Retirement System or who becomes a member under the provisions of KRS
161.470(4);
(6)"New teacher" means any member not a present teacher;
(7)"Prior service" means the number of years during which the member was a teacher
in Kentucky prior to July 1, 1941, except that not more than thirty
(30)years' prior
service shall be allowed or credited to any teacher;
(8)"Subsequent service" means the number of years during which the teacher is a
member of the Teachers' Retirement System after July 1, 1941;
(9)"Final average salary" means the average of the five
(5)highest annual salaries
which the member has received for service in a covered position and on which the
member has made contributions, or on which the public board, institution, or
agency has picked-up member contributions pursuant to KRS 161.540(2), or the
average of the five
(5)years of highest salaries as defined in KRS 61.680(2)(a),
which shall include picked-up member contributions. Additionally, the board of
trustees may approve a final average salary based upon the average of the three
highest salaries for individuals who become members prior to January 1, 2022, who
are at least fifty-five
(55)years of age and have a minimum of twenty-seven
years of Kentucky service credit. However, if any of the five
(5)or three
(3)highest
annual salaries used to calculate the final average salary was paid within the three
(3)years immediately prior to the date of the member's retirement for individuals
who become members prior to January 1, 2022, or within the five
(5)years
immediately prior to the date of the member's retirement for individuals who
become members on or after January 1, 2022, the amount of salary to be included
for each of those three
(3)years or five
(5)years, as applicable, for the purpose of
calculating the final average salary shall be limited to the lesser of:
(a)The member's actual salary; or
(b)The member's annual salary that was used for retirement purposes during each
of the prior three
(3)years or five
(5)years, as applicable, plus a percentage
increase equal to the percentage increase received by all other members
employed by the public board, institution, or agency, or for members of
school districts, the highest percentage increase received by members on any
one
(1)rank and step of the salary schedule of the school district. The increase
shall be computed on the salary that was used for retirement purposes. The
board of trustees may promulgate an administrative regulation in accordance
with KRS Chapter 13A to establish a methodology for measuring the
limitation so that the combined increases in salary for each of the last three
full years of salary prior to retirement shall not exceed the total permissible
percentage increase received by other members of the employer for the same
three
(3)year period.
For individuals who became members of the retirement system prior to July 1,
2021, this limitation shall not apply if the member receives an increase in salary in a
percentage exceeding that received by the other members, and this increase was
accompanied by a corresponding change in position or in length of employment.
The board of trustees may promulgate an administrative regulation in accordance
with KRS Chapter 13A to provide definitions for a corresponding change in
position or in length of employment. This limitation shall also not apply to the
payment to a member for accrued annual leave if the individual becomes a member
before July 1, 2008, or accrued sick leave which is authorized by statute and which
shall, for individuals subject to KRS 161.155(10) who became nonuniversity
members of the system prior to January 1, 2022, be included as part of a retiring
member's annual compensation for the member's last year of active service;
(10)"Annual compensation" means the total salary received by a member as
compensation for all services performed in employment covered by the retirement
system during a fiscal year. Annual compensation shall not include payment for any
benefit or salary adjustments made by the public board, institution, or agency to the
member or on behalf of the member which is not available as a benefit or salary
adjustment to other members employed by that public board, institution, or agency.
Annual compensation shall not include the salary supplement received by a member
under KRS 157.197(2)(c), 158.6455, or 158.782 on or after July 1, 1996. Under no
circumstances shall annual compensation include compensation that is earned by a
member while on assignment to an organization or agency that is not a public
board, institution, or agency listed in subsection
(4)of this section. In the event that
federal law requires that a member continue membership in the retirement system
even though the member is on assignment to an organization or agency that is not a
public board, institution, or agency listed in subsection
(4)of this section, the
member's annual compensation for retirement purposes shall be deemed to be the
annual compensation, as limited by subsection
(9)of this section, last earned by the
member while still employed solely by and providing services directly to a public
board, institution, or agency listed in subsection
(4)of this section. The board of
trustees shall determine if any benefit or salary adjustment qualifies as annual
compensation. For an individual who becomes a member on or after July 1, 2008,
annual compensation shall not include lump-sum payments upon termination of
employment for accumulated annual or compensatory leave;
(11)"Age of member" means the age attained on the first day of the month immediately
following the birthdate of the member. This definition is limited to retirement
eligibility and does not apply to tenure of members;
(12)"Employ," and derivatives thereof, means relationships under which an individual
provides services to an employer as an employee, as an independent contractor, as
an employee of a third party, or under any other arrangement as long as the services
provided to the employer are provided in a position that would otherwise be
covered by the Kentucky Teachers' Retirement System and as long as the services
are being provided to a public board, institution, or agency listed in subsection
of this section;
(13)"Regular interest" means:
(a)For an individual who becomes a member prior to July 1, 2008, interest at
three percent (3%) per annum;
(b)For an individual who becomes a member on or after July 1, 2008, but prior to
January 1, 2022, interest at two and one-half percent (2.5%) per annum for
purposes of crediting interest to the teacher savings account or any other
contributions made by the employee that are refundable to the employee upon
termination of employment; and
(c)For an individual who becomes a member on or after January 1, 2022, the
rolling five
(5)year yield on a thirty
(30)year United States Treasury bond as
of the end of May prior to the most recently completed fiscal year, except
that:
1. Once the member has at least sixty
(60)months of service in the system
it shall mean interest at two and one-half percent (2.5%) per annum for
purposes of crediting interest to employee contributions in the
foundational benefit component or any other contributions made by the
employee to the foundational benefit component that are refundable to
the employee upon termination of employment; and
2. The board shall have the authority to adjust the regular interest rate for
individuals who become members on or after January 1, 2022, in
accordance with KRS 161.633 and 161.634;
(14)"Accumulated contributions" means the contributions of a member to the teachers'
savings fund, including picked-up member contributions as described in KRS
161.540(2), plus accrued regular interest;
(15)"Annuitant" means a person who receives a retirement allowance or a disability
allowance;
(16)"Local retirement system" means any teacher retirement or annuity system created
in any public school district in Kentucky in accordance with the laws of Kentucky;
(17)"Fiscal year" means the twelve
(12)month period from July 1 to June 30. The
retirement plan year is concurrent with this fiscal year. A contract for a member
employed by a local board of education may not exceed two hundred sixty-one
(261)days in the fiscal year;
(18)"Public schools" means the schools and other institutions mentioned in subsection
(4)of this section;
(19)"Dependent" as used in KRS 161.520 and 161.525 means a person who was
receiving, at the time of death of the member, at least one-half (1/2) of the support
from the member for maintenance, including board, lodging, medical care, and
related costs;
(20)"Active contributing member" means a member currently making contributions to
the Teachers' Retirement System, who made contributions in the immediate
preceding fiscal year, for whom picked-up member contributions are currently
being made, or for whom these contributions were made in the immediate
preceding fiscal year;
(21)"Full-time" means employment in a position that requires services on a continuing
basis equal to at least seven-tenths (7/10) of normal full-time service on a fiscal
year basis;
(22)"Full actuarial cost," when used to determine the payment or payments that a
member must pay for service credit means the actuarial value of all costs associated
with the enhancement of a member's benefits or eligibility for benefit
enhancements, including health insurance supplement payments made by the
retirement system. The board may promulgate administrative regulations in
accordance with KRS Chapter 13A to provide the methodology for the assessment
of and procedures for the payment and collection of the full actuarial cost of the
purchased service. The actuary for the retirement system shall determine the full
actuarial value costs and actuarial cost factor tables as provided in KRS 161.400;
(23)"Last annual compensation" means the annual compensation, as defined by
subsection
(10)of this section and as limited by subsection
(9)of this section,
earned by the member during the most recent period of contributing service, either
consecutive or nonconsecutive, that is sufficient to provide the member with one
full year of service credit in the Kentucky Teachers' Retirement System, and which
compensation is used in calculating the member's initial retirement allowance,
excluding bonuses, retirement incentives, payments for accumulated sick leave,
annual, personal, and compensatory leave, and any other lump-sum payment. For
an individual who becomes a member on or after July 1, 2008, payments for annual
or compensatory leave shall not be included in determining the member's last
annual compensation;
(24)"Participant" means a member, as defined by subsection
(4)of this section, or an
annuitant, as defined by subsection
(15)of this section;
(25)"Qualified domestic relations order" means any judgment, decree, or order,
including approval of a property settlement agreement, that:
(a)Is issued by a court or administrative agency; and
(b)Relates to the provision of child support, alimony payments, or marital
property rights to an alternate payee;
(26)"Alternate payee" means a spouse, former spouse, child, or other dependent of a
participant, who is designated to be paid retirement benefits in a qualified domestic
relations order;
(27)"University member" means an individual who becomes a member through
employment with an employer specified in subsection (4)(b) and
(n)of this section;
(28)"Nonuniversity member" means an individual who becomes a member through
employment with an employer specified under subsection
(4)of this section, except
for those members employed by an employer specified in subsection (4)(b) and
of this section;
(29)"Accumulated employer contribution" means the employer contribution deposited
to a member's account through the supplemental benefit component and regular
interest credited on such amounts as provided by KRS 161.635 for nonuniversity
members and KRS 161.636 for university members;
(30)"Accumulated account balance" means:
(a)For members who began participating in the system prior to January 1, 2022,
the member's accumulated contributions; or
(b)For members who began participating in the system on or after January 1,
2022, the combined sum of the member's accumulated contributions and the
member's accumulated employer contributions;
(31)"Foundational benefit component" means the benefits provided by KRS 161.220 to
161.716 to individuals who become members on or after January 1, 2022, except
for the supplemental benefit component and retiree health benefits set forth in KRS
161.675; and
(32)"Supplemental benefit component" means:
(a)The benefit established pursuant to KRS 161.635 for individuals who become
nonuniversity members on or after January 1, 2022; or
(b)The benefit established pursuant to KRS 161.636 for individuals who become
university members on or after January 1, 2022.