2014 Kentucky Revised Statutes
CHAPTER 161 - SCHOOL EMPLOYEES -- TEACHERS' RETIREMENT AND TENURE
161.597 Installment payments for purchase of service credit by active contributing members.
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<![CDATA[161.597 Installment payments for purchase of service credit by active
contributing members.
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A member in active contributing status may purchase any service credit which
the member is authorized to purchase by making installment payments in lieu
of a lump-sum payment.
To initiate an installment payment plan, a member shall make a written request
to the retirement system for an estimate to purchase service credit by making
installment payments.
To qualify for installment payments, the total cost of the service purchase,
including any chargeable interest, shall exceed one thousand dollars ($1,000).
Installment payments shall be at least fifty dollars ($50) per month and shall be
made for a period of time which is not less than twelve (12) months nor more
than sixty (60) months. Interest at eight percent (8%) per annum, unless the
board specifies in an administrative regulation a different interest rate, shall be
charged on all installment payment purchases of service credit that are
purchasable at less than full actuarial cost.
Installment payments shall be made on a monthly basis by payroll deduction or
electronic fund transfer and forwarded separately to the Teachers' Retirement
System on forms or by computer format not later than fifteen (15) days
following the end of each month. The payments shall be considered
accumulated contributions and shall not be picked up as provided in KRS
161.560, except that subject to approval by the Internal Revenue Service and
only as permitted by the Internal Revenue Code, installment payments by
payroll deduction shall be made on a tax-deferred basis.
A member may elect to terminate payroll deductions at any time and purchase
the remaining service credit by lump-sum payment. A member on a leave of
absence may make personal installment payments. Termination of employment
in a covered position shall terminate installment payments. If the member is
later employed by a different employer in a covered position, the member may
request a new estimate and reinstate installment payments. A member that
misses two (2) consecutive installment payments shall be in default. A member
in default shall receive service credit on a pro rata basis for the total amount of
contributions made by installment payments. A member in default may not
reinstate installment payments for twelve (12) months from the date the
member was in default.
If a member dies before completing scheduled installment payments, the
named beneficiary of the member's retirement account may pay the remaining
balance due by a lump-sum payment within thirty (30) days of the death of the
member.
Effective:July 13, 2004
History: Amended 2004 Ky. Acts ch. 121, sec. 14, effective July 13, 2004. -Amended 1998 Ky. Acts ch. 515, sec. 10, effective July 1, 1998. -- Created 1996
Ky. Acts ch. 359, sec. 1, effective July 1, 1996.
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