161.400 Duties of actuary -- Actuarial investigations, valuations, and analyses.
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/ky/chapter-161/161-400A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)The board of trustees shall designate as actuary a competent person who shall
be a fellow of the Conference of Consulting Actuaries or a member of the
American Academy of Actuaries. He or she shall be the technical adviser of
the board on matters regarding the operation of the funds of the system and
shall perform such other duties as are required in connection therewith.
(b)1. At least once in each two
(2)year period, the board shall cause an
actuarial investigation to be made of all of the economic experience
under the retirement system, including but not limited to the inflation
rate, investment return, and payroll growth assumptions, relative to the
economic assumptions and funding methods previously adopted by the
board.
2. At least once in each five
(5)year period, the actuary shall make an
actuarial investigation into all of the demographic actuarial assumptions
used, including but not limited to mortality tables, withdrawal rates, and
retirement rate assumptions, relative to the demographic actuarial
assumptions previously adopted by the board.
3. Each actuarial investigation shall include at a minimum a summary of
the changes in actuarial assumptions and funding methods
recommended in the investigation and the projected impact of the
recommended changes on funding levels, unfunded liabilities, and
actuarially recommended contribution rates for employers over a thirty
(30)year period.
(c)At least annually the actuary shall make an actuarial valuation of the
retirement system. The valuation shall include:
1. A description of the actuarial assumptions used, and the assumptions
shall be reasonably related to the experience of the system and represent
the actuary's best estimate of anticipated experience;
2. A description of any funding methods utilized or required by state law in
the development of the actuarial valuation results;
3. A description of any changes in actuarial assumptions and methods from
the previous year's actuarial valuation;
4. The actuarially recommended contribution rate for employers for the
upcoming budget periods;
5. A thirty
(30)year projection of the funding levels, unfunded liabilities,
and actuarially recommended contribution rates for employers based
upon the actuarial assumptions, funding methods, and experience of the
system as of the valuation date;
6. A sensitivity analysis that evaluates the impact of changes in system
assumptions, including but not limited to the investment return
assumption, payroll growth assumption, and medical inflation rates, on
employer contribution rates, funding levels, and unfunded liabilities;
7. The full actuarial cost of the sick leave program established by KRS
161.155(10) and the full actuarial costs of annual leave program
established by KRS 161.540(1)(f), including the total actuarially accrued
liabilities of the sick leave program and the annual leave program
determined and reported separately, and the total actuarial costs to
annually finance each program as a percentage of payroll and in total
dollars broken down by each funding source; and
8. A breakdown of each individual employer's share of the actuarially
accrued liability as determined solely by the system's consulting actuary
and assigned to each employer based upon the last participating
employer of the member or annuitant as of the valuation date. The
breakdown shall include a value for each individual employer, including
but not limited to each individual school district, each university, each
state agency, and every other individual employer who participates in
the system.
(d)On the basis of the results of the valuations, the board of trustees shall make
necessary changes in the retirement system within the provisions of law and
shall establish the contributions payable by employers and the state specified
in KRS 161.550, including changes prescribed by KRS 161.633, 161.634,
161.635, and 161.636, as applicable.
(e)For any change in actuarial assumptions, funding methods, retiree health
insurance premiums and subsidies, or any other decisions made by the board
that impact system liabilities and actuarially recommended contribution rates
for employers and that are not made in conjunction with the actuarial
investigations required by paragraph
(b)of this subsection, an actuarial
analysis shall be completed showing the projected impact of the changes on
funding levels, unfunded liabilities, and actuarially recommended contribution
rates for employers over a thirty
(30)year period.
(2)Actuarial factors and actuarial cost factor tables in use by the retirement system for
all purposes shall be determined by the actuary of the retirement system and
approved by the board of trustees by resolution and implemented without the
necessity of an administrative regulation.
(3)A copy of each actuarial investigation, actuarial analysis, and valuation required by
subsection
(1)of this section shall be forwarded electronically to the Legislative
Research Commission no later than ten
(10)days after receipt by the board, and the