2013 Kentucky Revised Statutes CHAPTER 65 - GENERAL PROVISIONS APPLICABLE TO COUNTIES, CITIES, AND OTHER LOCAL UNITS 65.156 Actuarial evaluation requirement for local government pension systems -- Exemptions -- Copy to Legislative Research Commission -- Contributions by cities, municipal agencies, urban-county governments, or consolidated local governments -- Payment of lawful expenses -- Prohibition against creation or maintenance of defined benefit retirement system susceptible of unfunded liability -- Exceptions.
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65.156 Actuarial evaluation requirement for local government pension
systems -- Exemptions -- Copy to Legislative Research Commission -Contributions by cities, municipal agencies, urban-county governments,
or consolidated local governments -- Payment of lawful expenses -Prohibition against creation or maintenance of defined benefit retirement
system susceptible of unfunded liability -- Exceptions.
(1)
(2)
(3)
(4)
(5)
The governing board of any local government retirement system created
pursuant to KRS 67A.320, 67A.340, 67A.360 to 67A.690, 79.080, 90.400,
90.410, 95.290, 95.520 to 95.620, 95.621 to 95.629, 95.767 to 95.784, 95.851
to 95.884, or KRS Chapter 96 shall submit the retirement system to an
actuarial evaluation at least once every three (3) years, if the system provides
a defined benefit. The evaluation shall be prepared by an actuary who is a
fellow of the Society of Actuaries, a member of the American Academy of
Actuaries, or an enrolled actuary under the Employees' Retirement Income
Security Act of 1975. The board shall send a copy of the most recent
evaluation to the librarian of the Legislative Research Commission by
September 1, 1982, and thereafter the board shall send a copy of each new
evaluation within ten (10) days of receipt.
Actuaries performing evaluations pursuant to this section shall use the entry
age normal cost funding method. Their reports shall include a definition of each
actuarial term and an explanation of each actuarial assumption used.
Assumptions shall be reasonably related to the experience of the system and
represent the actuary's best estimate of anticipated experience.
Any city or municipal agency with a retirement system created pursuant to KRS
79.080, 90.400, 90.410, 95.520 to 95.620, 95.621 to 95.629, 95.767 to 95.784,
95.851 to 95.884, or KRS Chapter 96 which is closed to new members
pursuant to KRS 78.530, 95.520, 95.621, or 95.852 shall, if its local pension
system provides a defined benefit, contribute annually to the pension system,
for the benefit of the retirees of the system and the active participants who
choose to remain in the system, and in cities of the second class for the benefit
of members who have completed at least twenty (20) years' service and
withdrawn from service pursuant to KRS 95.857, an amount equal to that which
would be required pursuant to the funding standards of KRS 95.868, plus so
much of the principal amount of any unfunded prior service liability as the
actuary states is necessary to maintain cash flow adequate to pay retiree and
beneficiary payments until financial obligations to all retirees and beneficiaries
are fully satisfied.
All lawful expenses for general administration, performance bonds, medical,
actuarial, accounting, auditing, legal, and investment services of a retirement
system listed in subsection (1) of this section shall be paid from the pension
fund. Actuaries performing evaluations pursuant to this section shall include
estimates of the expenses in their recommendations for pension system
funding, and local governments shall add payments for the expenses to their
annual contributions to their respective retirement systems.
A city or city agency, consolidated local government, or urban-county
government may, pursuant to KRS 67A.340, 79.080, 90.410, or KRS Chapter
96 as applicable, provide for the retirement security of its employees through
(6)
(7)
the creation of a money purchase or defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code of 1954 as amended. City
employee deferred compensation plans created pursuant to KRS 18A.270, or
money purchase or defined contribution plans, qualified under Section 401(a)
of the Internal Revenue Code of 1954 as amended, which by their nature
cannot have an unfunded liability, shall not be subject to the actuarial
evaluation requirements of this section, and shall not be subject to termination
for purposes of employee entry into the County Employees Retirement System,
as required by KRS 78.530, 79.080, 90.410, and 96.180.
No city or county, except an urban-county, or special district, nor any agency or
instrumentality of a city or county or special district shall create or maintain for
its officers or employees a defined benefit retirement system, which by its
nature can have an unfunded liability. The provisions of this subsection shall
not preclude employer contributions for city managers or other appointed local
government executives who participate, pursuant to KRS 78.540, in a
retirement system which operates in more than one (1) state, nor the
continuation of a local government defined benefit retirement system which has
been closed to new members but which must fulfill its obligations to current
active members, retirees, and beneficiaries. Notwithstanding any provision to
the contrary, the provisions of this subsection shall not apply to length of
service awards programs established for the benefit of volunteer firefighters
and volunteer life squad and volunteer rescue personnel.
Notwithstanding any provision to the contrary, any city or county may establish
awards programs that recognize the length of service to the community by
volunteer firefighters, volunteer life squads, and volunteer rescue personnel.
Effective:July 15, 2002
History: Amended 2002 Ky. Acts ch. 346, sec. 23, effective July 15, 2002. -Amended 1998 Ky. Acts ch. 328, sec. 1, effective July 15, 1998. -- Amended
1992 Ky. Acts ch. 238, sec. 1, effective July 14, 1992. -- Amended 1988 Ky.
Acts ch. 11, sec. 2, effective July 15, 1988. -- Amended 1984 Ky. Acts ch. 24,
sec. 1, effective July 13, 1984; and ch. 177, sec. 14, effective July 13, 1984. -Created 1982 Ky. Acts ch. 297, sec. 1, effective July 15, 1982.
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