2021 Kentucky Revised Statutes
Chapter 161 - School employees -- teachers' retirement and tenure
161.633 Foundational component for persons who became nonuniversity members on or after January 1, 2022 -- Valuation assessment -- Adjustments to maintain funding level and contain costs -- Construction. (Effective January 1, 2022).
Universal Citation:
KY Rev Stat § 161.633 (2021)
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161.633 Foundational component for persons who became nonuniversity
members on or after January 1, 2022 -- Valuation assessment -Adjustments to maintain funding level and contain costs -- Construction.
(Effective January 1, 2022)
(1)
(2)
(3)
Individuals who become nonuniversity members of the Teachers' Retirement
System on or after January 1, 2022, shall be provided a foundational plan,
which shall be known as the foundational benefit component, a supplemental
benefit component established by KRS 161.635, and retiree health benefits as
provided by KRS 161.675. For purposes of this section, the foundational
benefit component includes all benefits provided by KRS 161.220 to 161.716
for individuals who become nonuniversity members of the Teachers'
Retirement System on or after January 1, 2022, with the exception of the
supplemental benefit component established by KRS 161.635 and retiree
health benefits established by KRS 161.675.
Notwithstanding KRS 161.220 to 161.716, the actuary designated by the board
of trustees under KRS 161.400 shall, as part of the annual valuation of the
pension fund, assess the funding levels, unfunded liabilities, and the actuarially
required employer contribution rates payable solely on behalf of individuals
who first become nonuniversity members on or after January 1, 2022.
Computation of the employer contribution rate payable shall be based upon
amortizing unfunded liabilities using the level-dollar amortization method.
If, on the basis of the valuation assessment required under subsection (2) of
this section, the funding level for the foundational benefit component payable
on behalf of individuals who first become nonuniversity members on or after
January 1, 2022, falls below ninety percent (90%), the board shall,
notwithstanding any other provision of KRS 161.220 to 161.716 to the contrary,
make one (1) or more of the following changes to maintain the funding level
and to contain pension and life insurance benefit costs within the maximum
statutory employer contribution rate for the foundational benefit component of
eight percent (8%) of annual compensation as provided by KRS
161.550(1)(d)1.:
(a) Utilize moneys from the stabilization reserve account for nonuniversity
membership and employers established by KRS 161.420(10)(a);
(b) Utilize prospective mandatory employee and employer contributions to
the supplemental benefit component as provided by KRS 161.635 to
provide funding for the foundational benefit component; or
(c) Prospectively adjust for individuals who become nonuniversity members
on or after January 1, 2022, one (1) or more of the following parts of the
foundational benefit component:
1.
Regular interest rate established by KRS 161.220(13)(c);
2.
The retirement factors established by KRS 161.620(1)(f);
3.
The age and service requirements to retire as established by KRS
161.600(2);
4.
The cost-of-living adjustment established by KRS 161.620(2); or
5.
The age and service requirements and the retirement allowance
provided during the entitlement period under KRS 161.661.
(4)
(5)
(6)
Notwithstanding any other provision of KRS 161.220 to 161.716 to the
contrary, the board of trustees may utilize any and all of the above
adjustments at any time on all individuals who become nonuniversity
members on or after January 1, 2022, in order to maintain the funding
level of the foundational benefit component and employer costs as
provided by this subsection.
For purposes of this section, "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 system's actuary in the system's
actuarial valuation.
This section shall only apply to individuals who became nonuniversity
members of the Teachers' Retirement System on or after January 1, 2022.
The provisions of this section shall not be construed to authorize the board to
retroactively restore benefits or eligibility for benefits in the foundational benefit
component or supplemental benefit that were previously reduced by the board
pursuant to subsection (3)(b) and (c) of this section.
Effective:January 1, 2022
History: Created 2021 Ky. Acts ch. 157, sec. 1, effective January 1, 2022.
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