61.635 Optional retirement plans.
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/ky/chapter-61/61-635A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)Each member shall have the right to elect to have his or her retirement allowance
payable under any one
(1)of the options set forth in this section in lieu of the
retirement allowance otherwise payable to the member upon retirement under any
of the provisions of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852.
The amount of any optional retirement allowance shall be actuarially equivalent to
the amount of retirement allowance otherwise payable to the member.
(2)Survivorship one hundred percent (100%). The member may elect to receive a
decreased retirement allowance during his or her lifetime and have the retirement
allowance continued after the member's death to his or her beneficiary during the
lifetime of the person.
(3)Survivorship sixty-six and two-thirds percent (66-2/3%). The member may elect to
receive a decreased retirement allowance during his or her lifetime and have two-
thirds (2/3) of the retirement allowance continue after the member's death to his or
her beneficiary during the lifetime of the person.
(4)Survivorship fifty percent (50%). The member may elect to receive a decreased
retirement allowance during his or her lifetime and have one-half (1/2) of the
retirement allowance continued after the member's death to his or her beneficiary
during the lifetime of the person.
(5)Life with ten
(10)years certain. The member less than age seventy-six
(76)may
elect to receive a monthly retirement allowance during his or her lifetime which
shall guarantee payments for one hundred twenty
(120)months. If the member dies
before receiving payments for one hundred twenty
(120)months, the member's
beneficiary shall receive the remaining payments monthly, for the duration of the
one hundred twenty
(120)months' period. However, if the trust is designated as
beneficiary, the trustee of the trust may elect to receive a lump-sum payment which
shall be the actuarial equivalent to the remaining payments, or the trustee may elect
to continue the remaining monthly payments to the trust of the member. If the estate
is designated as beneficiary, the estate shall receive a lump-sum payment which
shall be the actuarial equivalent to the remaining payments.
(6)Life with fifteen
(15)years certain. The member less than age sixty-eight
(68)may
elect to receive a monthly retirement allowance during his or her lifetime which
shall guarantee payments for one hundred eighty
(180)months. If the member dies
before receiving payments for one hundred eighty
(180)months, the member's
beneficiary shall receive the remaining payments monthly for the duration of the
one hundred eighty
(180)months' period. However, if the trust is designated as
beneficiary, the trustee of the trust may elect to receive a lump-sum payment which
shall be the actuarial equivalent to the remaining payments, or the trustee may elect
to continue the remaining payments to the trust of the member. If the estate is
designated as beneficiary, the estate shall receive a lump-sum payment which shall
be the actuarial equivalent to the remaining payments.
(7)Life with twenty
(20)years certain. The member less than age sixty-two
(62)may
elect to receive a monthly retirement allowance during his or her lifetime which
shall guarantee payments for two hundred forty
(240)months. If the member dies
before receiving payments for two hundred forty
(240)months, the member's
beneficiary shall receive the remaining payments for the duration of the two
hundred forty
(240)months period. However, if the trust is beneficiary, the trustee
of the trust may elect to receive a lump-sum payment which shall be the actuarial
equivalent to the remaining payments, or the trustee may elect to continue the
remaining payments to the trust of the member. If the estate is designated as
beneficiary, the estate shall receive a lump-sum payment which shall be the
actuarial equivalent to the remaining payments.
(8)Social Security adjustment options. These options shall be available to any member
who has not attained age sixty-two
(62)as follows:
(a)No survivor rights. The member may elect to receive an increased retirement
allowance from his or her effective retirement date through the month he or
she attains age sixty-two
(62)at which time his retirement allowance shall be
decreased for the remainder of his or her lifetime;
(b)Survivor rights. The member may elect to receive an increased retirement
allowance from his or her effective retirement date through the month he
attains age sixty-two
(62)based on the option payable under subsection
(2)of
this section, if the retirement allowance shall be decreased in the month
following the month he or she attains age sixty-two (62), or the month
following the month he or she would have attained age sixty-two (62), in
event of the member's death, and have the retirement allowance continue after
the member's death to his or her beneficiary during the lifetime of the person.
(9)Beneficiary Social Security adjustment option. This option is available to the
beneficiary of a deceased member if the beneficiary, who is a person, has not
attained age sixty (60), and is eligible to receive Social Security payments at age
sixty (60). The beneficiary may elect to receive during his or her lifetime an
increased retirement allowance based on his or her annual benefit payable for life.
The payment shall begin on his or her effective retirement date and continue
through the month he or she attains age sixty
(60)at which time his or her
retirement allowance shall be decreased for the remainder of his or her lifetime.
(10)Pop-up option. The member may elect to receive a decreased retirement allowance
during his or her lifetime and have the retirement allowance continued after the
member's death to his or her beneficiary during the lifetime of the person. If the
beneficiary dies prior to the member, or if the beneficiary is the member's spouse
and they divorce, the member's retirement allowance shall increase to the amount
that would have been payable as a single life annuity.
(11)Actuarial equivalent refund. A member who began participating in the system prior
to January 1, 2014, may elect to receive a one
(1)time lump-sum payment which
shall be the actuarial equivalent of the amount payable for a period of sixty
months under KRS 61.595 (1).
(12)Partial lump-sum option.
(a)No survivor rights. A member may elect to receive a one-time lump-sum
payment equal to twelve (12), twenty-four (24), thirty-six (36), forty-eight
(48), or sixty
(60)monthly retirement allowances payable under the
applicable retirement formula for the system and receive a reduced monthly
retirement allowance payable for his or her lifetime. The lump-sum payment
shall be paid in the month the first monthly retirement allowance is payable.
(b)Survivor rights. A member may elect to receive a one-time lump-sum
payment equal to twelve (12), twenty-four (24), thirty-six (36), forty-eight
(48), or sixty
(60)monthly retirement allowances payable under subsection
(2)of this section and receive a reduced monthly retirement allowance
payable for his or her lifetime. The lump-sum payment shall be paid in the
month the first monthly retirement allowance is payable. The reduced
retirement allowance shall be continued after the member's death to his or her
beneficiary during the lifetime of the person.
(c)In order to explain the partial lump-sum option to members, the Authority
shall:
1. Provide, for all retirement estimates that include the partial lump-sum
option, including estimates calculated by a member using an automatic
estimator available on the Authority's website, the additional months of
service a member would have to be employed in order to recoup the
actuarial reduction in his or her monthly retirement allowance from
selecting a partial lump-sum option at each payment level; and
2. Prepare and make available to all members and participating employers
in the form of a paper or electronic pamphlet or booklet a summary of
the partial lump-sum option, written in a manner that can be understood
by the average member and sufficiently accurate and comprehensive to
reasonably apprise them of the benefits and potential consequences,
including federal tax consequences, of taking a partial lump-sum option.
(13)The other provisions of this section notwithstanding, the beneficiary of a retired
member of the General Assembly shall, after the member's death, receive sixty-six
and two-thirds percent (66-2/3%) of the member's retirement allowance during his
or her lifetime if the member of the General Assembly began participating in the
system prior to January 1, 2014, and has elected this option and has made
contributions in accordance with subsection
(14)of this section and of KRS 61.560.
The retirement allowance of the retired member of the General Assembly shall not
be actuarially reduced to provide for this survivor benefit.
(14)A member of the General Assembly who began participating in the system prior to
January 1, 2014, who wishes to obtain the survivorship option specified in
subsection
(13)of this section shall so notify the Kentucky Public Pensions
Authority:
(a)Within thirty
(30)days after first becoming a member of the General
Assembly if he or she is not a member of the General Assembly on July 15,
1980; or
(b)Within thirty
(30)days after July 15, 1980, if he or she is a member of the
General Assembly on July 15, 1980.
(15)The system shall forward to members of the General Assembly a form on which a
member who began participating in the system prior to January 1, 2014, may elect
the option provided for in subsections
(13)and
(14)of this section.
(16)The options described in subsections (2), (3), (4), (8)(b), (10), (12)(b), and
(13)of this section shall be extended to the member only if the designated beneficiary is a person.