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78.510 Definitions for KRS 78.510 to 78.852.
As used in KRS 78.510 to 78.852, unless the context otherwise requires:
(1) "System" means the County Employees Retirement System;
(2) "Board" means the board of trustees of the system as provided in KRS 78.780;
(3) "County" means any county, or nonprofit organization created and governed by
a county, counties, or elected county officers, sheriff and his employees,
county clerk and his employees, circuit clerk and his deputies, former circuit
clerks or former circuit clerk deputies, or political subdivision or instrumentality,
including school boards, charter county government, or urban-county
government participating in the system by order appropriate to its
governmental structure, as provided in KRS 78.530, and if the board is willing
to accept the agency, organization, or corporation, the board being hereby
granted the authority to determine the eligibility of the agency to participate;
(4) "School board" means any board of education participating in the system by
order appropriate to its governmental structure, as provided in KRS 78.530,
and if the board is willing to accept the agency or corporation, the board being
hereby granted the authority to determine the eligibility of the agency to
participate;
(5) "Examiner" means the medical examiners as provided in KRS 61.665;
(6) "Employee" means every regular full-time appointed or elective officer or
employee of a participating county and the coroner of a participating county,
whether or not he qualifies as a regular full-time officer. The term shall not
include persons engaged as independent contractors, seasonal, emergency,
temporary, and part-time workers. In case of any doubt, the board shall
determine if a person is an employee within the meaning of KRS 78.510 to
78.852;
(7) "Employer" means a county, as defined in subsection (3) of this section, the
elected officials of a county, or any authority of the county having the power to
appoint or elect an employee to office or employment in the county;
(8) "Member" means any employee who is included in the membership of the
system or any former employee whose membership has not been terminated
under KRS 61.535;
(9) "Service" means the total of current service and prior service as defined in this
section;
(10) "Current service" means the number of years and months of employment as an
employee, on and after July 1, 1958, for which creditable compensation is paid
and employee contributions deducted, except as otherwise provided;
(11) "Prior service" means the number of years and completed months, expressed
as a fraction of a year, of employment as an employee, prior to July 1, 1958,
for which creditable compensation was paid. An employee shall be credited
with one (1) month of prior service only in those months he received
compensation for at least one hundred (100) hours of work. Twelve (12)
months of current service in the system shall be required to validate prior
service;
(12) "Accumulated contributions" means the sum of all amounts deducted from the
compensation of a member and credited to his individual account in the
members' account, including employee contributions picked up after August 1,
1982, pursuant to KRS 78.610(4), together with interest credited on the
amounts, and any other amounts the member shall have contributed thereto,
including interest credited thereon. For members who begin participating on or
after September 1, 2008, "accumulated contributions" shall not include
employee contributions that are deposited into accounts established pursuant
to 26 U.S.C. sec. 401(h) within the funds established in KRS 16.510, 61.515,
and 78.520, as prescribed by KRS 61.702(2)(b);
(13) "Creditable compensation" means all salary, wages, and fees, including
payments for compensatory time, paid to the employee as a result of services
performed for the employer or for time during which the member is on paid
leave, which are includable on the member's federal form W-2 wage and tax
statement under the heading "wages, tips, other compensation", including
employee contributions picked up after August 1, 1982, pursuant to KRS
78.610(4). A lump-sum bonus, severance pay, or employer-provided payment
for purchase of service credit shall be included as creditable compensation but
shall be averaged over the employee's service with the system in which it is
recorded if it is equal to or greater than one thousand dollars ($1,000). If
compensation includes maintenance and other perquisites, the board shall fix
the value of that part of the compensation not paid in money. Living
allowances, expense reimbursements, lump-sum payments for accrued
vacation leave, sick leave except as provided in KRS 78.616(5), and other
items determined by the board shall be excluded. Creditable compensation
shall also include amounts that are not includable in the member's gross
income by virtue of the member having taken a voluntary salary reduction
provided for under applicable provisions of the Internal Revenue Code.
Creditable compensation shall also include elective amounts for qualified
transportation fringes paid or made available on or after January 1, 2001, for
calendar years on or after January 1, 2001, that are not includable in the gross
income of the employee by reason of 26 U.S.C. sec. 132(f)(4). For employees
who begin participating on or after September 1, 2008, creditable
compensation shall not include payments for compensatory time. Creditable
compensation shall not include training incentive payments for city officers paid
as set out in KRS 64.5277 to 64.5279;
(14) "Final compensation" means:
(a) For a member who begins participating before September 1, 2008, who is
not employed in a hazardous position, as provided in KRS 61.592, the
creditable compensation of the member during the five (5) fiscal years he
was paid at the highest average monthly rate divided by the number of
months of service credit during that five (5) year period multiplied by
twelve (12). The five (5) years may be fractional and need not be
consecutive. If the number of months of service credit during the five (5)
year period is less than forty-eight (48), one (1) or more additional fiscal
years shall be used;
(b) For a member who is not employed in a hazardous position, as provided
in KRS 61.592, whose effective retirement date is between August 1,
2001, and January 1, 2009, and whose total service credit is at least
twenty-seven (27) years and whose age and years of service total at least
seventy-five (75), final compensation means the creditable compensation
of the member during the three (3) fiscal years the member was paid at
the highest average monthly rate divided by the number of months of
service credit during that three (3) year period multiplied by twelve (12).
The three (3) years may be fractional and need not be consecutive. If the
number of months of service credit during the three (3) year period is less
than twenty-four (24), one (1) or more additional fiscal years shall be
used. Notwithstanding the provision of KRS 61.565, the funding for this
paragraph shall be provided from existing funds of the retirement
allowance;
(c) For a member who begins participating before September 1, 2008, who is
employed in a hazardous position, as provided in KRS 61.592, the
creditable compensation of the member during the three (3) fiscal years
he was paid at the highest average monthly rate divided by the number of
months of service credit during that three (3) year period multiplied by
twelve (12). The three (3) years may be fractional and need not be
consecutive. If the number of months of service credit during the three (3)
year period is less than twenty-four (24), one (1) or more additional fiscal
years shall be used;
(d) For a member who begins participating on or after September 1, 2008,
but prior to January 1, 2014, who is not employed in a hazardous position,
as provided in KRS 61.592, the creditable compensation of the member
during the five (5) complete fiscal years immediately preceding retirement
divided by five (5). Each fiscal year used to determine final compensation
must contain twelve (12) months of service credit. If the member does not
have five (5) complete fiscal years that each contain twelve (12) months
of service credit, then one (1) or more additional fiscal years shall be
used; or
(e) For a member who begins participating on or after September 1, 2008,
but prior to January 1, 2014, who is employed in a hazardous position, as
provided in KRS 61.592, the creditable compensation of the member
during the three (3) complete fiscal years he was paid at the highest
average monthly rate divided by three (3). Each fiscal year used to
determine final compensation must contain twelve (12) months of service
credit;
(15) "Final rate of pay" means the actual rate upon which earnings of an employee
were calculated during the twelve (12) month period immediately preceding the
member's effective retirement date, and shall include employee contributions
picked up after August 1, 1982, pursuant to KRS 78.610(4). The rate shall be
certified to the system by the employer and the following equivalents shall be
used to convert the rate to an annual rate: two thousand eighty (2,080) hours
for eight (8) hour workdays, one thousand nine hundred fifty (1,950) hours for
seven and one-half (7.5) hour workdays, two hundred sixty (260) days, fifty-two
(52) weeks, twelve (12) months, one (1) year;
(16) "Retirement allowance" means the retirement payments to which a member is
entitled;
(17) "Actuarial equivalent" means a benefit of equal value when computed upon the
basis of the actuarial tables adopted by the board. In cases of disability
retirement, the options authorized by KRS 61.635 shall be computed by adding
ten (10) years to the age of the member, unless the member has chosen the
Social Security adjustment option as provided for in KRS 61.635(8), in which
case the member's actual age shall be used. For members who begin
participating in the system prior to January 1, 2014, no disability retirement
option shall be less than the same option computed under early retirement;
(18) "Normal retirement date" means the sixty-fifth birthday of a member unless
otherwise provided in KRS 78.510 to 78.852;
(19) "Fiscal year" of the system means the twelve (12) months from July 1 through
the following June 30, which shall also be the plan year. The "fiscal year" shall
be the limitation year used to determine contribution and benefits limits as set
out in 26 U.S.C. sec. 415;
(20) "Agency reporting official" means the person designated by the participating
agency who shall be responsible for forwarding all employer and employee
contributions and a record of the contributions to the system and for performing
other administrative duties pursuant to the provisions of KRS 78.510 to 78.852;
(21) "Regular full-time positions," as used in subsection (6) of this section, shall
mean all positions that average one hundred (100) or more hours per month,
determined by using the number of hours actually worked in a calendar or
fiscal year, or eighty (80) or more hours per month in the case of noncertified
employees of school boards, determined by using the number of hours actually
worked in a calendar or school year, unless otherwise specified, except:
(a) Seasonal positions, which although temporary in duration, are positions
which coincide in duration with a particular season or seasons of the year
and that may recur regularly from year to year, in which case the period of
time shall not exceed nine (9) months, except for employees of school
boards, in which case the period of time shall not exceed six (6) months;
(b) Emergency positions that are positions that do not exceed thirty (30)
working days and are nonrenewable;
(c) Temporary, also referred to as probationary, positions that are positions
of employment with a participating agency for a period of time not to
exceed twelve (12) months and not renewable; or
(d) Part-time positions that are positions that may be permanent in duration,
but that require less than a calendar or fiscal year average of one
hundred (100) hours of work per month, determined by using the number
of months actually worked within a calendar or fiscal year, in the
performance of duty, except in case of noncertified employees of school
boards, the school term average shall be eighty (80) hours of work per
month, determined by using the number of months actually worked in a
calendar or school year, in the performance of duty;
(22) "Alternate participation plan" means a method of participation in the system as
provided for by KRS 78.530(3);
(23) "Retired member" means any former member receiving a retirement allowance
or any former member who has on file at the retirement office the necessary
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(29)
(30)
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(32)
(33)
(34)
(35)
(36)
(37)
documents for retirement benefits and is no longer contributing to the system;
"Current rate of pay" means the member's actual hourly, daily, weekly,
biweekly, monthly, or yearly rate of pay converted to an annual rate as defined
in final rate of pay. The rate shall be certified by the employer;
"Beneficiary" means the person, persons, estate, trust, or trustee designated
by the member in accordance with KRS 61.542 or 61.705 to receive any
available benefits in the event of the member's death. As used in KRS 61.702,
beneficiary shall not mean an estate, trust, or trustee;
"Recipient" means the retired member, the person or persons designated as
beneficiary by the member and drawing a retirement allowance as a result of
the member's death, or a dependent child drawing a retirement allowance. An
alternate payee of a qualified domestic relations order shall not be considered
a recipient, except for purposes of KRS 61.623;
"Person" means a natural person;
"School term or year" means the twelve (12) months from July 1 through the
following June 30;
"Retirement office" means the Kentucky Retirement Systems office building in
Frankfort;
"Delayed contribution payment" means an amount paid by an employee for
current service obtained under KRS 61.552. The amount shall be determined
using the same formula in KRS 61.5525, except the determination of the
actuarial cost for classified employees of a school board shall be based on
their final compensation, and the payment shall not be picked up by the
employer. A delayed contribution payment shall be deposited to the member's
account and considered as accumulated contributions of the individual
member. In determining payments under this subsection, the formula found in
this subsection shall prevail over the one found in KRS 212.434;
"Participating" means an employee is currently earning service credit in the
system as provided in KRS 78.615;
"Month" means a calendar month;
"Membership date" means the date upon which the member began
participating in the system as provided in KRS 78.615;
"Participant" means a member, as defined by subsection (8) of this section, or
a retired member, as defined by subsection (23) of this section;
"Qualified domestic relations order" means any judgment, decree, or order,
including approval of a property settlement agreement, that:
(a) Is issued by a court or administrative agency; and
(b) Relates to the provision of child support, alimony payments, or marital
property rights to an alternate payee;
"Alternate payee" means a spouse, former spouse, child, or other dependent of
a participant, who is designated to be paid retirement benefits in a qualified
domestic relations order;
"Accumulated employer credit" means the employer pay credit deposited to the
member's account and interest credited on such amounts as provided by KRS
16.583 and 61.597; and
(38) "Accumulated account balance" means:
(a) For members who began participating in the system prior to January 1,
2014, the member's accumulated contributions; or
(b) For members who began participating in the system on or after January
1, 2014, in the hybrid cash balance plan as provided by KRS 16.583 and
61.597, the combined sum of the member's accumulated contributions
and the member's accumulated employer credit.
Effective:July 1, 2013
History: Amended 2013 Ky. Acts ch. 120, sec. 72, effective July 1, 2013. -Amended 2011 Ky. Acts ch. 44, sec. 4, effective June 8, 2011; and ch. 52,
sec. 4, effective June 8, 2011. -- Amended 2010 Ky. Acts ch. 148, sec. 7,
effective July 15, 2010. -- Amended 2009 Ky. Acts ch. 71, sec. 1, effective June
25, 2009; and ch. 77, sec. 24, effective June 25, 2009. -- Amended 2008 (1st
Extra. Sess.) Ky. Acts ch. 1, sec. 25, effective June 27, 2008. -- Amended 2004
Ky. Acts ch. 36, sec. 31, effective July 13, 2004. -- Amended 2003 Ky. Acts
ch. 169, sec. 13, effective March 31, 2003. -- Amended 2002 Ky. Acts ch. 52,
sec. 18, effective July 15, 2002. -- Amended 2001 Ky. Acts ch. 7, sec. 8,
effective June 21, 2001. -- Amended 2000 Ky. Acts ch. 210, sec. 4, effective
July 14, 2000; and ch. 385, sec. 33, effective July 14, 2000. -- Amended 1998
Ky. Acts ch. 105, sec. 21, effective July 15, 1998; and ch. 300, sec. 2, effective
July 15, 1998. -- Amended 1996 Ky. Acts ch. 31, sec. 2, effective July 15, 1996;
and ch. 167, sec. 24, effective July 15, 1996. -- Amended 1994 Ky. Acts ch. 485,
sec. 25, effective July 15, 1994. Amended 1992 Ky. Acts ch. 240, sec. 51,
effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 117, sec. 1, effective July
13, 1990; and ch. 401, sec. 13, effective July 13, 1990. -- Amended 1988 Ky.
Acts ch. 349, sec. 31, effective July 15, 1988; and ch. 364, sec. 3, effective July
15, 1988. -- Amended 1986 Ky. Acts ch. 90, sec. 22, effective July 15, 1986;
and ch. 176, sec. 1, effective July 15, 1986. -- Amended 1984 Ky. Acts ch. 111,
sec. 49, effective July 13, 1984; and ch. 198, sec. 1, effective July 13, 1984. -Amended 1982 Ky. Acts ch. 166, sec. 28, effective July 15, 1982; and ch. 423,
sec. 15, effective July 15, 1982. -- Amended 1978 Ky. Acts ch. 311, sec. 20,
effective June 17, 1978. -- Amended 1976 Ky. Acts ch. 321, secs. 32 and 40. -Amended 1974 Ky. Acts ch. 87, sec. 1; and ch. 128, sec. 32. -- Amended 1972
Ky. Acts ch. 116, sec. 61. -- Amended 1966 Ky. Acts ch. 34, sec. 1. -- Amended
1964 Ky. Acts ch. 49, sec. 1. -- Amended 1962 Ky. Acts ch. 31, sec. 1. -Amended 1960 Ky. Acts ch. 165, Part III, sec. 1. -- Created 1958 Ky. Acts
ch. 167, sec. 1.
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