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164A.704 Duties of board.
The board shall:
(1) Promulgate administrative regulations, set fees, and adopt procedures as are
necessary to implement the provisions of KRS 164A.700 to 164A.709;
(2) Enter into contractual agreements, including contracts for legal, actuarial, financial,
and consulting services;
(3) Invest moneys in the fund in any instruments, obligations, securities, or property as
permitted by KRS 164A.701(4) and deemed appropriate by the board;
(4) Procure insurance to protect against any loss in connection with the fund's property,
assets, or activities and to indemnify board members from personal loss or
accountability from liability arising from any action or inaction as a board member;
(5) Make arrangements with eligible educational institutions in the Commonwealth to
fulfill obligations under prepaid tuition contracts, including, but not limited to,
payment from the fund of the tuition cost on behalf of a qualified beneficiary to
attend an eligible educational institution in which the beneficiary is admitted and
enrolled;
(6) Develop requirements, procedures, and guidelines regarding prepaid tuition
contracts, including but not limited to, the termination, withdrawal, or transfer of
payments under a prepaid tuition contract; tuition shortfalls; number of participants;
time limitations for prepaid tuition contracts and the use of tuition benefits; tuition
conversions; payment schedules; payroll deductions; penalties for failure of
purchasers to adhere to contracts; and transfer of prepaid tuition credits towards
private education in the Commonwealth or for out-of-state institutions;
(7) Have the actuarial soundness of the fund evaluated by a nationally recognized
independent actuary annually, by October 1 of each year, to determine:
(a) The amount of prepaid tuition for each tuition plan; and for each eligible
educational institution for specific academic years, the corresponding value;
(b) Whether additional assets are necessary to defray the obligations of the
portion of the fund relating to contracts entered into before April 25, 2006,
and when those funds will be needed.
1.
For purposes of this paragraph, a "real liability expected to accrue during
the next biennium" exists if the amount in the fund representing
contracts entered into before April 25, 2006, is not sufficient to meet all
anticipated distributions under contracts entered into before April 25,
2006, and the expense of maintaining and operating the fund for the
upcoming biennium.
2.
If the report of the actuary submitted in an odd-numbered year reflects
that there will be a real liability expected to accrue during the next
biennium, the secretary of the Finance and Administration Cabinet shall
include in the budget request for the cabinet an appropriation to the
board in an amount necessary to meet the real liability in each fiscal year
of the biennium, and the General Assembly shall appropriate the
necessary funds; and
(c)
(8)
Whether additional assets are necessary to defray the obligations of the
portion of the fund relating to contracts entered into after April 25, 2006, and
when those funds will be needed. If the assets of the portion of the fund
relating to contracts entered into after April 25, 2006, are insufficient to
ensure the actuarial soundness of that portion of the fund, as reported by the
actuary, the board shall adjust the price of subsequent purchases of prepaid
tuition contracts to the extent necessary to restore the actuarial soundness of
the fund. The board may suspend the sale of prepaid tuition contracts until the
next annual actuarial evaluation is completed if the board determines the
action is needed to restore the actuarial soundness of the fund. During a
suspension of sales of contracts, the board and Tuition Account Program
Office shall continue to service existing contract accounts and meet all
obligations under existing prepaid tuition contracts; and
Make an annual report each year by November 1 to the Legislative Research
Commission and the Governor showing the fund's condition, and whether additional
assets will be necessary to defray the obligations of the fund.
Effective: April 25, 2006
History: Amended 2006 Ky. Acts ch. 252, Pt. XXXI, sec. 4, effective April 25, 2006. -Amended 2005 Ky. Acts ch. 162, sec. 5, effective July 1, 2005. -- Amended 2002
Ky. Acts ch. 25, sec. 4, effective July 15, 2002. -- Created 2000 Ky. Acts ch. 163,
sec. 4, effective July 14, 2000.
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