2019 Kentucky Revised Statutes Chapter 61 - General provisions as to offices and officers -- social security for public employees -- employees retirement system 61.5956 Optional 401(a) money purchase plan for new nonhazardous members who begin participating in KERS or CERS on or after January 1, 2019. (Declared void -- See LRC Note Below).
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61.5956 Optional 401(a) money purchase plan for new nonhazardous members
who begin participating in KERS or CERS on or after January 1, 2019.
(Declared void -- See LRC Note Below)
(1)
(2)
(a)
The retirement benefit provided by this section shall be known as the 401(a)
money purchase plan and shall operate as an optional benefit tier within the
Kentucky Employees Retirement System or the County Employees Retirement
System, as applicable, for members in a nonhazardous position.
(b) A member participating in a nonhazardous position in the Kentucky
Employees Retirement System or the County Employees Retirement System
whose participation in the systems begins on or after July 1, 2019, may elect
within ninety (90) days of his or her membership date to receive the retirement
benefits provided by this section in lieu of the hybrid cash balance retirement
benefits provided under KRS 61.597. A member in a nonhazardous position
whose participation in the Kentucky Employees Retirement System or County
Employees Retirement System begins on or after January 1, 2019, but prior to
July 1, 2019, may elect within ninety (90) days of July 1, 2019, to receive the
benefits provided by this section in lieu of the hybrid cash balance plan
retirement benefits provided under KRS 61.597 and have his or her
accumulated account balance in the hybrid cash balance plan transferred to the
401(a) money purchase plan. An election to participate in the 401(a) money
purchase plan shall be irrevocable and shall apply to any future service as a
nonhazardous member participating in the Kentucky Employees Retirement
System or the County Employees Retirement System.
(c) Any member or person who makes an election as prescribed by KRS 21.374
shall accrue the retirement benefits provided by this section in lieu of accruing
additional benefits under KRS 21.345 to 21.580, 61.510(14), 61.595, or
61.597.
(d) Any member who makes an election as prescribed by KRS 61.5955 shall
accrue the retirement benefits provided by this section in lieu of accruing
additional final compensation and retirement benefits under KRS 61.510(14),
61.595, 61.597, or 78.510(14).
The 401(a) money purchase plan shall be a mandatory defined contribution plan and
shall provide a retirement benefit based upon the member's accumulated account
balance, which shall include:
(a) Contributions made by the member as provided by KRS 61.510 to 61.705 and
78.510 to 78.852, except for employee contributions prescribed by KRS
61.702(2)(b);
(b) An employer contribution of four percent (4%) of the creditable compensation
earned by the employee for each month the employee is contributing to the
401(a) money purchase plan provided by this section; and
(c) Investment returns on employee and employer contributions. Investment
returns on the employee and employer contributions shall be net of
administrative expenses and investment fees and expenses.
(3)
(4)
(5)
(6)
(a)
Member contributions and employer contributions as provided by subsection
(2)(a) and (b) of this section shall be credited to the member's account
monthly as contributions are reported and posted to the system in accordance
with KRS 61.675 or 78.625.
(b) Investment returns shall be determined based upon the investment program
established by the board, which may include but not be limited to a program
that invests in system assets or asset classes, a program that provides
investment options selected or authorized by the board internally or through
an external vendor, or investment options provided through an agreement with
the Kentucky Employees Deferred Compensation Authority.
(a) Upon termination of employment, a member who has less than five (5) years
of service credited under KRS 16.543(1), 61.543(1), and 78.615(1), or another
state-administered retirement system who elects to take a refund of his or her
accumulated account balance as provided by KRS 61.625, shall forfeit the
accumulated employer contribution, and shall only receive a refund of his or
her accumulated contributions.
(b) Upon termination of employment, a member who has five (5) or more years of
service credited under KRS 16.543(1), 61.543(1), and 78.615(1), or another
state-administered retirement system who elects to take a refund of his or her
accumulated account balance as provided by KRS 61.625, shall receive a full
refund of his or her accumulated account balance.
A member participating in the 401(a) money purchase plan provided by this section
may retire:
(a) At his or her normal retirement date, if he or she has earned five (5) or more
years of service credited under KRS 16.543(1), 61.543(1), 78.615(1), or
another state-administered retirement system;
(b) If the member is at least age fifty-seven (57) and has an age and years of
service total of at least eighty-seven (87) years. The years of service used to
determine eligibility for retirement under this paragraph shall only include
years of service credited under KRS 16.543(1), 61.543(1), 78.615(1), or
another state-administered retirement system; or
(c) Immediately for those members electing to participate in the 401(a) money
purchase plan as described by subsection (1)(c) to (d) of this section if he or
she is otherwise eligible to retire from the systems administered by Kentucky
Retirement Systems.
A member eligible to retire under subsection (5) of this section may elect to:
(a) Receive a monthly retirement allowance payable for life by having his or her
accumulated account balance in the 401(a) defined contribution plan
annuitized by the retirement systems in accordance with the actuarial
assumptions and actuarial methods adopted by the board and in effect on the
member's retirement date;
(b) Receive the actuarial equivalent of his or her retirement allowance calculated
under paragraph (a) of this subsection payable under one (1) of the options set
(7)
(8)
forth in KRS 61.635, except for the option provided by KRS 61.635(11); or
(c) Take a refund of his or her account balance as provided by KRS 61.625.
Members who are participating in the 401(a) defined contribution plan as described
by subsection (1)(c) to (d) of this section upon retirement may:
(a) Elect to annuitize only the portion of their accumulated account balance that
was accrued in the 401(a) money purchase plan; or
(b) Elect to take a refund of his or her account balance accrued solely while
participating in the 401(a) money purchase plan. The provisions of this
paragraph shall not prohibit a member from receiving a monthly benefit under
KRS 61.595 for service accrued in the systems prior to participating in the
401(a) money purchase plan.
The provisions of this section shall not apply to members who began participating
in the systems or plans administered by Kentucky Retirement Systems prior to July
1, 2019, unless the member makes an election as provided by this section or by
KRS 21.374 or 61.5955.
Effective: July 14, 2018
History: Created 2018 Ky. Acts ch. 107, sec. 12, effective July 14, 2018.
Legislative Research Commission Note (12/13/2018). On December 13, 2018, the
Kentucky Supreme Court ruled that the passage of 2018 SB 151 (2018 Ky. Acts ch.
107), did not comply with the three-readings rule of Kentucky Constitution Section
46 and that the legislation is, therefore, constitutionally invalid and declared void.
This statute was created in Section 12 of that Act.
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