67A.402 Employee purchase of service credit -- Payment procedures.
790 words·~4 min read·
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(a)Except as otherwise provided in paragraph
(d)of this subsection, any member
whose participation date in the fund is prior to March 14, 2013, who has at
least five
(5)years of total service credit as a member of the fund may
purchase service credit, that is not otherwise purchasable, for up to a
maximum of four
(4)years of service.
(b)Except as otherwise provided in paragraph
(d)of this subsection, any member
whose participation date in the fund is on or after March 14, 2013, who has at
least five
(5)but no more than ten
(10)years of membership service may,
subject to the limitations provided by this section, purchase periods of active
military duty service in the Armed Forces of the United States, not to exceed
four
(4)years, that are not otherwise credited under KRS 67A.400(2)(c). The
member shall provide verification of the period of active military duty as
prescribed by the board.
(c)The member shall not be entitled to purchase any service credit under this
section for which he or she has been given credit in another defined benefit
retirement fund; however, the member may purchase government service
credit by transferring funds directly from another public defined benefit
retirement plan if the member provides proof that he or she is not eligible for a
retirement benefit from the other public defined benefit retirement fund.
(d)Any provision of law to the contrary notwithstanding:
1. No service credit purchase under this subsection shall be counted toward
the accrual of a health or other medical insurance retirement benefit in
this fund;
2. No service purchased under this section by a member whose
participation date in the fund is on or after March 14, 2013, shall be used
to determine the member's eligibility to retire or to withdraw on a
certificate under KRS 67A.410(2) or (3)(b); and
3. The amount of service a member can purchase under this section shall
not exceed the amounts specified by paragraphs
(a)and
(b)of this
subsection.
(2)A member who purchases service credit shall file an application with the board no
later than sixty
(60)days prior to the anticipated service purchase payment date. The
member shall pay to the fund an amount which shall be determined by actuarial
method consistent with the methods prescribed for determining the purchase of
prior service credit which shall be the principal.
(3)Payment of the principal shall be made in a lump sum or payment of the principal
and interest may be made by installments. Interest, at the annual rate of return on
investments of the fund for the preceding year, shall be established by the
commissioner of finance on or before August 31 of each year and shall be based on
financial statements of the fund for the year ending June 30, except that the interest
shall not be less than three percent (3%). Interest shall be added to the principal for
the time period for which installments are to be made.
(4)If payments are made by installment, the cost of purchasing the service credit shall
be recalculated annually based upon the member's current salary, the interest rate
established by the commissioner of finance, and other factors required by the
actuarial method. The member's payments shall be adjusted annually to reflect the
annual recalculation of the cost of purchasing service credit. Installment payments
shall be consecutive and the total number of monthly installments shall not be less
than twelve
(12)or more than two hundred forty (240). The member shall pay the
installments by payroll deduction.
(5)Payments shall not be picked up by the urban-county government. No employer
contribution shall be paid on the installments. The board shall determine how much
of the total cost represents payment for one
(1)quarter of the service to be
purchased and the member shall receive service credit for one
(1)quarter of the
service each time this amount is paid.
(6)If the member dies, retires, or ceases to be a member of the fund before he or she
has made all installment payments for the purchase of service credit, the fund shall
refund to the member, his or her qualified surviving spouse, or his or her estate, the
portion of any payment that does not represent a full quarter of service.
(7)A member whose participation date in the fund is prior to March 14, 2013, who
does not repay a refund of contributions, as provided in KRS 67A.500(3), shall be
entitled to purchase service credit for prior membership service.
(8)The member may cancel a purchase obligation at any time, but once canceled, a
member shall have forever forfeited, waived, and relinquished the right to purchase
service credit.