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6.521 Increase of retirement benefits.
(1)
(2)
(3)
As of July 1 of each year, the board of trustees of the Kentucky Judicial Form
Retirement System shall recompute the monthly benefits of persons then receiving
benefits under the Legislators' Retirement Plan, by using the following formula:
three and one-half percent (3.5%) times fifty-five percent (55%) of the final
compensation of the office in which the credit was earned for a person retiring as of
the recomputation date, times the number of years of service credit (not to exceed
twenty-eight (28) years). In making the recomputation, the same reduction factor, in
case of an actuarially reduced benefit or a surviving spouse's benefit, shall be used
as was used in determining the benefit then being received. If the benefit as
recomputed in accordance with this section is higher than the benefit then being
received, the recomputed benefit shall thereafter be paid monthly, commencing as
of the date specified for the recomputation, subject to future adjustment at ensuing
recomputations in accordance with this section.
Effective August 1, 1998, to July 1, 2008, a recipient of a monthly pension benefit
from the Legislators' Retirement Plan shall have his or her benefit increased on July
1 of each year by the percentage increase in the annual average of the consumer
price index for all urban consumers for the most recent calendar year as published
by the Federal Bureau of Labor Statistics, not to exceed five percent (5%). In
determining the state's appropriation to the Legislators' Retirement Fund, only the
costs of increases granted as of the most recent valuation date shall be recognized.
The benefits of this subsection as provided on August 1, 1998, to July 1, 2008, shall
not be considered as benefits protected by the inviolable contract provisions of KRS
6.505. The General Assembly reserves the right to suspend or reduce the benefits
conferred in this subsection if in its judgment the welfare of the Commonwealth so
demands.
(a) Effective July 1, 2009, and on July 1 of each year thereafter, a recipient of a
monthly pension benefit from the Legislators' Retirement Plan shall have his
or her benefit increased by one and one-half percent (1.5%), if:
1.
The funding level of the plan is greater than one hundred percent (100%)
and subsequent legislation authorizes the use of any surplus actuarial
assets to provide an increase in retirement allowances described by this
subsection; or
2.
The General Assembly appropriates sufficient funds to fully prefund the
increase described by this subsection in the year the increase is provided.
(b) The board of trustees of the Kentucky Judicial Form Retirement System shall,
at least thirty (30) days prior to the beginning of regular sessions of the
General Assembly held in even-numbered years, advise the General Assembly
of the following:
1.
Whether the plan has a funding level greater than one hundred percent
(100%) and if the plan can support an increase in recipients' retirement
allowances as provided by paragraph (a) of this subsection over the next
budget biennium without reducing the funding level of the plan below
one hundred percent (100%); and
2.
(4)
If no surplus actuarial assets are available, the level of funds needed to
fully prefund an increase for plan recipients over the next budget
biennium if a one and one-half percent (1.5%) increase is provided
annually over the biennium.
(c) For purposes of this subsection, "funding level" means the actuarial value of
assets divided by the actuarially accrued liability expressed as a percentage
that is determined and reported by the plan's actuary in the plan's actuarial
valuation.
(d) The full increase described by this subsection shall only be provided if the
recipient has been receiving a retirement benefit for at least twelve (12)
months prior to the effective date of the increase. If the recipient has been
receiving a benefit for less than twelve (12) months prior to the effective date
of the increase provided by this subsection, the increase shall be reduced on a
pro rata basis for each month the recipient has not been receiving a benefit in
the twelve (12) months preceding the effective date of the increase.
(e) In determining the state's appropriation to the Legislators' Retirement Fund,
only the costs of increases granted as of the most recent valuation date shall be
recognized.
(f) The benefits of this subsection as provided on July 1, 2009, and thereafter
shall not be considered as benefits protected by the inviolable contract
provisions of KRS 6.505. The General Assembly reserves the right to suspend
or reduce the benefits conferred in this subsection if in its judgment the
welfare of the Commonwealth so demands.
In addition to the increase to a recipient's retirement allowance as provided by
subsection (3) of this section, the General Assembly may, by subsequent legislation,
provide supplemental increases to a recipient's retirement allowance to help adjust
for actual changes in the recipient's cost of living if the General Assembly
appropriates sufficient funds to fully prefund the benefit in the year the increase is
provided.
Effective: July 1, 2013
History: Amended 2013 Ky. Acts ch. 120, sec. 16, effective July 1, 2013. -- Amended
2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 2, effective June 27, 2008. -- Amended
1998 Ky. Acts ch. 360, sec. 2, effective July 15, 1998. -- Created 1982 Ky. Acts ch.
380, sec. 2, effective July 15, 1982.
2014-2016 Budget Reference. See Legislative Branch Budget, 2014 Ky. Acts ch. 123,
Pt. I, 1, (4) at 782.
Legislative Research Commission Note (7/1/2013). This statute was amended by
Section 16 of 2013 Ky. Acts ch. 120. Section 81 of that Act reads, "Notwithstanding
any other provision of this Act to the contrary, the amendments in Sections 16, 25,
and 69 of this Act shall in no way nullify the provisions of 2012 Ky. Acts ch. 19, Part
I, 1.(4), 2012 Ky. Acts ch. 68, Part I, 2.(2), or 2012 Ky. Acts ch. 144, Part IV, 10.,
which suspended the cost-of-living adjustment that would have been provided to
retirees and beneficiaries of the Legislative Retirement Plan, the Judicial Retirement
Plan, the State Police Retirement System, the Kentucky Employees Retirement
System, and the County Employees Retirement System on July 1, 2012, and July 1,
2013."
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