161.540 Members' contributions -- Picked-up contributions.
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/ky/chapter-161/161-540A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Each individual who becomes a contributing nonuniversity member prior to
January 1, 2022, shall contribute to the retirement system twelve and eight
hundred fifty-five thousandths percent (12.855%) of annual compensation, of
which:
1. Nine and one hundred five thousandths percent (9.105%) of annual
compensation shall be used to fund pension benefits; and
2. Three and three-quarters percent (3.75%) of annual compensation shall
be used to fund retiree health benefits.
(b)Each individual who becomes a contributing university member prior to
January 1, 2022, shall contribute to the retirement system ten and four-tenths
percent (10.4%) of annual compensation, of which:
1. Seven and six hundred twenty-five thousandths percent (7.625%) of
annual compensation shall be used to fund pension benefits; and
2. Two and seven hundred seventy-five thousandths percent (2.775%) of
annual compensation shall be used to fund retiree health benefits.
(c)Each individual who becomes a contributing nonuniversity member on or
after January 1, 2022, shall contribute to the retirement system fourteen and
three-quarters percent (14.75%) of annual compensation, of which:
1. Nine percent (9%) of annual compensation shall be used to fund pension
benefits in the foundational benefit component as described by KRS
161.633. The contribution provided by this subparagraph shall not be
used to fund the supplemental benefit account as provided by KRS
161.635;
2. Two percent (2%) of annual compensation shall fund the required
employee contribution in the supplemental benefit component in KRS
161.635, except that the board may direct these contributions on a
prospective basis into the pension and life insurance funds to contain
costs of the foundational benefit component within the provisions of
KRS 161.633; and
3. Three and three-quarters percent (3.75%) of annual compensation shall
be used to fund retiree health benefits.
(d)Each individual who becomes a contributing university member on or after
January 1, 2022, shall contribute to the retirement system nine and seven
hundred seventy-five thousandths percent (9.775%) of annual compensation,
of which:
1. Five percent (5%) of annual compensation shall be used to fund pension
benefits in the foundational benefit component as described by KRS
161.634. The contribution provided by this subparagraph shall not be
used to fund the supplemental benefit account as provided by KRS
161.636;
2. Two percent (2%) of annual compensation shall fund the required
employee contribution in the supplemental benefit component in KRS
161.636, except that the board may direct these contributions on a
prospective basis into the pension and life insurance funds to contain
costs of the foundational benefit component within the provisions of
KRS 161.634; and
3. Two and seven hundred and seventy-five thousandths percent (2.775%)
of annual compensation shall be used to fund retiree health benefits.
(e)When the funds established to actuarially fund pension annuities and the
medical insurance fund established under KRS 161.420 become fully funded
as determined by the annual actuarial valuation, the board of trustees shall
recommend to the General Assembly that the contributions required under
paragraph (a)2., (b)2., (c)3., or (d)3. of this subsection shall, in an actuarially
accountable manner, be either decreased, suspended, or eliminated.
(f)Payments authorized by statute that are made to retiring members, who
became members of the system before July 1, 2008, for not more than sixty
(60)days of unused accrued annual leave shall, subject to KRS 161.220(10),
be considered as part of the member's annual compensation, and shall be used
only for the member's final year of active service. Notwithstanding the
provisions of this subsection or any other statute to the contrary, for
retirement calculation purposes, members may only be credited for payment
of annual leave under the following conditions:
1. Payment by an employer for annual leave shall be equally available to
all members serving under contracts requiring the same number of
worked days and greater; and
2. At least two
(2)members of the employer shall receive payment for
annual leave.
(g)The contribution of members shall not exceed the applicable percentages on
annual compensation as set forth in this section or as where otherwise limited
by statute. When a member retires, if it is determined that he or she has made
contributions on a salary in excess of the amount to be included for the
purpose of calculating his or her final average salary, any excess contribution
shall be refunded in a lump sum to the member's employer for distribution to
the member.
(2)Each public board, institution, or agency listed in KRS 161.220(4) shall, solely for
the purpose of compliance with Section 414(h) of the United States Internal
Revenue Code, pick up the member contributions required by this section for all
compensation earned after August 1, 1982, and the contributions so picked up shall
be treated as employer contributions in determining tax treatment under the United
States Internal Revenue Code and KRS 141.010. The picked-up member
contribution shall satisfy all obligations to the retirement system satisfied prior to
August 1, 1982, by the member contribution, and the picked-up member
contribution shall be in lieu of a member contribution. Each employer shall pay
these picked-up member contributions from the same source of funds which is used
to pay earnings to the member. The member shall have no option to receive the
contributed amounts directly instead of having them paid by the employer to the
system. Member contributions picked-up after August 1, 1982, shall be treated for all purposes of KRS 161.220 to 161.714 in the same manner and to the same extent as member contributions made prior to August 1, 1982.