2022 Kentucky Revised Statutes Chapter 161 - School employees -- teachers' retirement and tenure 161.550 Contribution to system by employers and state -- Contributions to pension, medical insurance, and life insurance funds.
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161.550 Contribution to system by employers and state -- Contributions to pension,
medical insurance, and life insurance funds.
(1)
Each employer, except as provided under KRS 161.555, shall contribute annually to
the Teachers' Retirement System a permanent employer contribution rate on behalf
of each employee it employs equal to:
(a) Thirteen and one hundred five thousandths percent (13.105%) of the total
annual compensation of nonuniversity members who become members prior
to July 1, 2008. Of this permanent employer contribution rate:
1.
Twelve and three hundred fifty-five thousandths percent (12.355%) of
the total annual compensation shall be used to fund pension and life
insurance benefits; and
2.
Three-quarters of a percent (0.75%) of annual compensation shall be
used to provide funding to the medical insurance fund as provided under
KRS 161.420(5). If the board of trustees establishes a trust fund under
26 U.S.C. sec. 115, the board may deposit the employer contribution
provided in this subparagraph in that trust fund;
(b) Fourteen and one hundred five thousandths percent (14.105%) of the total
annual compensation of nonuniversity members who become members on or
after July 1, 2008, but prior to January 1, 2022. Of this permanent employer
contribution rate:
1.
Thirteen and three hundred fifty-five thousandths percent (13.355%) of
the total annual compensation shall be used to fund pension and life
insurance benefits; and
2.
Three-quarters of a percent (0.75%) of annual compensation shall be
used to provide funding to the medical insurance fund as provided under
KRS 161.420(5). If the board of trustees establishes a trust fund under
26 U.S.C. sec. 115, the board may deposit the employer contribution
provided in this subparagraph in that trust fund;
(c) Thirteen and sixty-five hundredths percent (13.65%) of the total annual
compensation of university members who become members prior to January
1, 2022. Of this permanent employer contribution rate:
1.
Ten and eight hundred seventy-five thousandths percent (10.875%) of
the total annual compensation shall be used to fund pension and life
insurance benefits; and
2.
Two and seven hundred seventy-five thousandths percent (2.775%) of
annual compensation shall be used to provide funding to the medical
insurance fund as provided under KRS 161.420(5). If the board of
trustees establishes a trust fund under 26 U.S.C. sec. 115, the board may
deposit the employer contribution provided in this subparagraph in that
trust fund;
(d) Ten and three-quarters percent (10.75%) of the total annual compensation of
nonuniversity members who become members on or after January 1, 2022. Of
this permanent employer contribution rate:
1.
(2)
Eight percent (8%) of the total annual compensation shall be used to
fund pension and life insurance benefits. The contribution provided by
this subparagraph shall not be used to fund the supplemental benefit
account as provided by KRS 161.635;
2.
Two percent (2%) of the total annual compensation shall be used to fund
the mandatory employer contribution of the supplemental benefit
component, except that the board may direct these contributions on a
prospective basis into the pension and life insurance funds to contain
costs within the provisions of KRS 161.633; and
3.
Three-quarters of one percent (0.75%) of annual compensation shall be
used to provide funding to the medical insurance fund as provided under
KRS 161.420(5). If the board of trustees establishes a trust fund under
26 U.S.C. sec. 115, the board may deposit the employer contribution
provided in this subdivision in that trust fund; and
(e) Nine and seven hundred seventy-five thousandths percent (9.775%) of total
annual compensation of university members who become members on or after
January 1, 2022. Of this permanent employer contribution rate:
1.
Five and seven hundred seventy-five thousandths percent (5.775%) of
the total annual compensation shall be used to fund pension and life
insurance benefits. The contribution provided by this subparagraph shall
not be used to fund the supplemental benefit account as provided by
KRS 161.636;
2.
Two percent (2%) of the total annual compensation shall be used to fund
the mandatory employer contribution of the supplemental benefit
component, except that the board may direct these contributions on a
prospective basis into the pension and life insurance funds to contain
costs within the provisions of KRS 161.634; and
3.
Two percent (2%) of annual compensation shall be used to provide
funding to the medical insurance fund as provided under KRS
161.420(5). If the board of trustees establishes a trust fund under 26
U.S.C. sec. 115, the board may deposit the employer contribution
provided in this subparagraph in that trust fund.
In addition to the required contributions in subsection (1) of this section, the state
shall contribute annually to the Teachers' Retirement System a percentage of the
total salaries of the state-funded and federally funded members it employs to pay the
cost of health insurance coverage for retirees who are not eligible for Medicare and
who retire on or after July 1, 2010, less the amounts that are otherwise required to
be paid by the retirees under KRS 161.675. The board shall deposit funds in the
medical insurance fund unless the board of trustees has established a trust fund
under 26 U.S.C. sec. 115 for this purpose. In this case, the board may deposit the
employer contribution in that trust fund. This contribution shall be known as the
state medical insurance fund stabilization contribution. The percentage to be
contributed by the state under this subsection:
(a) Shall be determined by the retirement system's actuary for each biennial
(3)
(4)
(5)
budget period;
(b) May be suspended or adjusted by the General Assembly if in its judgment the
welfare of the Commonwealth so demands; and
(c) Shall not exceed the lesser of the actual benefit cost for retirees not eligible for
Medicare who retire on or after July 1, 2010, or the amount contributed by
employers under subsection (3) of this section.
All employers who employ nonuniversity members shall make a contribution for
each payroll on behalf of their active employees who participate in the Teachers'
Retirement System in an amount equal to three percent (3%) of payroll of those
active employees. The contribution specified by this subsection shall be used to
fund retiree health benefits.
When the medical insurance fund established under KRS 161.420(5) achieves a
sufficient prefunded status as determined by the Teachers' Retirement System's
actuary, the board of trustees shall recommend to the General Assembly that the
contributions required under subsections (1)(c)2. and (e)3. and (3) of this section
shall, in an actuarially accountable manner, be either decreased, suspended, or
eliminated. The decrease, suspension, or elimination in contributions required
under subsection (1)(c)2. of this section shall not exceed two and twenty-five
thousandths percent (2.025%) of annual compensation. The decrease, suspension, or
elimination in contributions required under subsection (1)(e)3. of this section shall
not exceed one and twenty-five hundredths percent (1.25%) of annual
compensation.
Each employer shall remit the required employer contributions to the retirement
system under the terms and conditions specified for member contributions under
KRS 161.560. The state shall provide annual appropriations based upon estimated
funds needed to meet the requirements of KRS 161.155, 161.168, 161.507(4),
161.515, 161.545, 161.553, 161.605, 161.612, and 161.620(1), (3), (5), (6), and (7).
In the event an annual appropriation is less than the amount of these requirements,
the state shall make up the deficit in the next biennium budget appropriation to the
retirement system. Employer contributions to the retirement system are for the
exclusive purpose of providing benefits to members and annuitants and these
contributions shall be considered deferred compensation to the members. This
subsection shall not apply to costs applicable to individuals who become members
on or after January 1, 2022.
Effective: January 1, 2022
History: Repealed, reenacted, and amended 2021 Ky. Acts ch. 157, sec. 8, effective
January 1, 2022. -- Amended 2018 Ky. Acts ch. 107, sec. 63, effective July 14, 2018.
-- Amended 2010 Ky. Acts ch. 159, sec. 4, effective July 1, 2010. -- Amended 2006
Ky. Acts ch. 85, sec. 2, effective July 12, 2006. -- Amended 2004 Ky. Acts ch. 121,
sec. 12, effective July 1, 2004. -- Amended 2002 Ky. Acts ch. 275, sec. 20, effective
July 1, 2002. -- Amended 1998 Ky. Acts ch. 515, sec. 8, effective July 1, 1998. -Amended 1996 Ky. Acts ch. 359, sec. 19, effective July 1, 1996. -- Amended 1992
Ky. Acts ch. 192, sec. 9, effective July 1, 1992. -- Amended 1990 Ky. Acts ch. 442,
sec. 11, effective July 1, 1990; and ch. 476, Pt. V, sec. 516, effective July 13, 1990. - Amended 1988 Ky. Acts ch. 363, sec. 12, effective July 1, 1988. -- Amended 1986
Ky. Acts ch. 440, sec. 10, effective July 1, 1986. -- Amended 1984 Ky. Acts ch. 253,
sec. 17, effective July 1, 1984. -- Amended 1982 Ky. Acts ch. 326, sec. 8, effective
July 1, 1982. -- Amended 1978 Ky. Acts ch. 152, sec. 10, effective March 28, 1978. - Amended 1976 Ky. Acts ch. 351, sec. 13, effective July 1, 1976. -- Amended 1960
Ky. Acts ch. 44, sec. 11. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective
October 1, 1942, from Ky. Stat. sec. 4506b-37.
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.
That ruling applies to changes made to this statute in that Act.
Legislative Research Commission Note (7/13/90). In amending this section, 1990
House Bill 653, Acts ch. 442, sec. 11, did not underline the year "1990" which was
intended to be added after "July 1," at the beginning of the section. As directed by
KRS 446.270, the Reviser of Statutes has deleted this material from the text of this
statute. Section 20 of Acts ch. 442 provides, however, that "the provisions of this Act
shall become effective July 1, 1990."
Legislative Research Commission Note (7/13/90). The Act amending this section
prevails over the repeal and reenactment in House Bill 940, Acts ch. 476, pursuant to
sec. 653(1) of Acts ch. 476.
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