2014 Kentucky Revised Statutes
CHAPTER 161 - SCHOOL EMPLOYEES -- TEACHERS' RETIREMENT AND TENURE
161.700 Funds exempt from taxation and process -- Taxability after December 31, 1997 -- Benefits not considered marital property.
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<![CDATA[161.700 Funds exempt from taxation and process -- Taxability after December
31, 1997 -- Benefits not considered marital property.
(1)
(2)
(3)
(4)
(5)
Except as otherwise provided by this section and KRS 161.655(5), the right of
a member to a retirement allowance and to the return of contributions, any
benefit or right accrued or accruing to any person under KRS 161.220 to
161.716, and the money in the various funds established pursuant to KRS
161.220 to 161.716 are hereby exempt from any state or municipal tax, and
shall not be subject to execution, garnishment, attachment, or other process,
and shall not be assigned.
Notwithstanding subsection (1) of this section, retirement benefits accrued or
accruing to any person under this retirement system on or after January 1,
1998, shall be subject to the tax imposed by KRS 141.020, to the extent
provided in KRS 141.010 and 141.0215.
Retirement allowance, disability allowance, accumulated contributions, or any
other benefit under the retirement system shall not be classified as marital
property pursuant to KRS 403.190(1), except to the extent permitted under
KRS 403.190(4). Retirement allowance, disability allowance, accumulated
contributions, or any other benefit under the retirement system shall not be
considered as an economic circumstance during the division of marital property
in an action for dissolution of marriage pursuant to KRS 403.190(1)(d), except
to the extent permitted under KRS 403.190(4).
Qualified domestic relations orders issued by a court or administrative agency
shall be honored by the retirement system if:
(a) The benefits payable pursuant to the order meet the requirements of a
qualified domestic relations order as provided by 26 U.S.C. sec. 414(p).
The retirement system shall follow applicable provisions of 26 U.S.C. sec.
414(p) in administering qualified domestic relations orders;
(b) The order meets the requirements established by the retirement system
and by subsections (4) to (12) of this section. The board of trustees of the
retirement system shall establish the requirements, procedures, and
forms necessary for the administration of qualified domestic relations
order by promulgation of administrative regulations in accordance with
KRS Chapter 13A; and
(c) The order is on the form established by the retirement system pursuant to
the retirement system's authority provided under paragraph (b) of this
subsection.
A qualified domestic relations order shall not:
(a) Require the retirement system to take any action not authorized under
state or federal law;
(b) Require the retirement system to provide any benefit, allowance, or other
payment not authorized under state or federal law;
(c) Grant or be construed to grant the alternate payee any separate right,
title, or interest in or to any retirement benefit other than to receive
payments from the participant's account in accordance with the
administrative regulations promulgated by the system and as provided by
subsections (4) to (12) of this section; or
(d) Grant any separate interest to any person other than the participant.
(6) Any qualified domestic relations order submitted to the retirement system shall
specify the dollar amount or percentage amount of the participant's benefit to
be paid to the alternate payee. In calculating the amount to be paid to the
alternate payee, the court or administrative agency that is responsible for
issuing the order shall follow the requirements set forth in the administrative
regulations promulgated by the board of trustees. Notwithstanding any other
statute to the contrary, the board shall not be required to honor a qualified
domestic relations order that does not follow the requirements set forth in the
administrative regulations promulgated by the board of trustees.
(7) If the qualified domestic relations order meets the requirements established by
the system and by subsections (4) to (12) of this section, payments to the
alternate payee shall be distributed under the following conditions:
(a) If the participant is retired and is receiving a monthly benefit, the month
following the date the retirement system receives a qualified domestic
relations order that complies with the administrative regulations
promulgated by the retirement system and subsections (4) to (12) of this
section; or
(b) If the participant is not retired, the month of the participant's effective
retirement date in which the first retirement allowance is payable to the
participant or the month in which the participant receives a refund of
contributions as provided by KRS 161.470(6).
(8) An alternate payee's benefits and rights under a qualified domestic relations
order shall terminate upon the earlier of:
(a) The death of the participant;
(b) The death of the alternate payee; or
(c) The termination of benefits to the participant under any provision of KRS
161.220 to 161.716.
(9) An alternate payee shall not receive a monthly payment under a qualified
domestic relations order if the participant is not receiving a monthly retirement
allowance.
(10) The cost of living adjustment provided to the participant pursuant to KRS
161.620 shall be divided between the participant and alternate payee in a
qualified domestic relations order as follows:
(a) If the order specifies the alternate payee is to receive a percentage of the
participant's benefit, then the cost of living adjustment shall be divided
between the participant and the alternate payee based upon the
percentage of the total benefit each is receiving upon the participant's
retirement or upon the date the order is approved by the retirement
system, whichever is later; or
(b) If the order specifies that the alternate payee is to receive a set dollar
amount of the participant's benefit, then the order shall specify that:
1.
The cost of living adjustment shall be divided between the
participant and the alternate payee based upon the percentage of
the total benefit each is receiving upon the participant's retirement or
upon the date the order is approved by the retirement system,
whichever is later; or
2.
The alternate payee shall receive no cost of living adjustment.
If the order does not specify the division of the cost of living adjustment
as required by this paragraph, then no cost of living adjustment shall be
payable to the alternate payee. If no cost of living adjustment is provided
to the alternate payee, then the participant shall receive the full cost of
living adjustment he or she would have received if the order had not been
applied to the participant's account.
(11) Except in cases involving child support payments, the retirement system may
charge reasonable and necessary fees and expenses to the recipient and the
alternate payee of a qualified domestic relations order for the administration of
the qualified domestic relations order by retirement system. All fees and
expenses shall be established by the administrative regulations promulgated
by the board of trustees of the retirement system. The qualified domestic
relations order shall specify whether the fees and expenses provided by this
subsection shall be paid:
(a) Solely by the participant;
(b) Solely by the alternate payee; or
(c) Equally shared by the participant and alternate payee.
(12) The retirement system shall honor a qualified domestic relations order issued
prior to July 15, 2010, for prospective benefit payments if the order or an
amended version of the order meets the requirements established by this
section and the administrative regulations promulgated by the retirement
system. The order shall not apply to benefit payments issued by the retirement
system prior to the date the order was approved by the retirement system.
Effective:June 8, 2011
History: Amended 2011 Ky. Acts ch. 68, sec. 4, effective June 8, 2011. -Amended 2010 Ky. Acts ch. 148, sec. 12, effective July 15, 2010. -- Amended
2002 Ky. Acts ch. 275, sec. 33, effective July 1, 2002. -- Amended 1998 Ky.
Acts ch. 255, sec. 36, effective July 15, 1998. -- Amended 1995 (2d Extra.
Sess.) Ky. Acts ch. 1, sec. 6, effective April 28, 1995. -- Repealed and
reenacted 1990 Ky. Acts ch. 476, Pt. V, sec. 541, effective July 13, 1990. -Amended 1980 Ky. Acts ch. 206, sec. 14, effective July 1, 1980. -- Recodified
1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat.
sec. 4506b-51.
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