2022 Kentucky Revised Statutes Chapter 161 - School employees -- teachers' retirement and tenure 161.634 Foundational component for persons who became university members on or after January 1, 2022 -- Valuation assessment -- Adjustments to maintain funding level and contain costs -- Construction.
Download as PDF
161.634 Foundational component for persons who became university members on
or after January 1, 2022 -- Valuation assessment -- Adjustments to maintain
funding level and contain costs -- Construction.
(1)
(2)
(3)
Individuals who become university 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 161.636, 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
university members of the Teachers' Retirement System on or after January 1, 2022,
with the exception of the supplemental benefit component established by KRS
161.636 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 university 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 university 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 five and seven hundred seventy-five
thousandths percent (5.775%) of annual compensation as provided by KRS
161.550(1)(e)1.:
(a) Utilize moneys from the stabilization reserve account for university
membership and employers established by KRS 161.420(10)(b);
(b) Utilize prospective mandatory employee and employer contributions to the
supplemental benefit component as provided by KRS 161.636 to provide
funding for the foundational benefit component; or
(c) Prospectively adjust for individuals who become university 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)(g);
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
(4)
(5)
(6)
during the entitlement period under KRS 161.661.
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 university 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 university 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. 2, effective January 1, 2022.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.