Title 105 KAR — Kentucky Public Pension Authority

Chapter 1 General Rules

105 KAR 1:001 Definitions for 105 KAR Chapter 1 {#sec-105-kar-1-001 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:001}

Section 1. Definitions. The following definitions shall apply to 105 KAR Chapter 1 unless otherwise required by context or otherwise defined in a specific administrative regulation:

(1) "AAC" means:

(a) Prior to April 1, 2021, the Administrative Appeals Committee of the Board of Trustees of the Kentucky Retirement Systems; and

(b) Beginning April 1, 2021, the separate or joint Administrative Appeals Committees of the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System in accordance with KRS 61.645(16) and 78.782(16).

(2) "Accumulated account balance" is defined by KRS 16.505(40), 61.510(41), and 78.510(38).

(3) "Accumulated contributions" is defined by KRS 16.505(7), 61.510(12), and 78.510(12).

(4) "Accumulated employer credit" is defined by KRS 16.505(39), 61.510(40), and 78.510(37).

(5) "Act in line of duty" or "in line of duty" is defined by KRS 16.505(19) and 78.510(48).

(6) "Active member" means a member who is participating in the systems.

(7) "Actuarial equivalent" is defined by KRS 16.505(13), 61.510(17), and 78.510(17).

(8) "Agency" means:

(a) Prior to April 1, 2021, the Kentucky Retirement Systems, which administered the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System; and

(b) Beginning April 1, 2021, the Kentucky Public Pensions Authority, which is authorized to carry out the day-to-day administrative needs of the Kentucky Retirement Systems (comprised of the State Police Retirement System and the Kentucky Employees Retirement System) and the County Employees Retirement System.

(9) "Agency reporting official" is defined by KRS 78.510(20).

(10) "Alternate payee" is defined by KRS 16.505(38), 61.510(39), and 78.510(36).

(11) "Authorized leave of absence" is defined by KRS 16.505(14).

(12) "Beneficiary" is defined by KRS 16.505(25), 61.510(26), and 78.510(25).

(13) "Boards" means the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System.

(14) "Bona fide promotion or career advancement" means:

(a) The definition provided in KRS 61.598(1) and 78.545(22); and

(b) Any increases in creditable compensation for all employees in a specified class due to an increase in rate of pay authorized or funded by the legislative or administrative body of the employer, or due to an increase in rate of pay mandated in a collective bargaining agreement approved by the legislative body of the employer.

(15) "Career threshold" is defined by KRS 61.702(4)(e).9.a. and 78.5536(4)(e)9.a.

(16) "County" is defined by KRS 78.510(3).

(17) "Creditable compensation" is defined by KRS 16.505(8), 61.510(13), and 78.510(13).

(18) "Current rate of pay" is defined by KRS 16.505(24), 61.510(25), and 78.510(24).

(19) "Current service" is defined by KRS 16.505(4), 61.510(10), and 78.510(10).

(20) "DAC" means:

(a) Prior to April 1, 2021, the Disability Appeals Committee of the Board of Trustees of the Kentucky Retirement Systems; and

(b) Beginning April 1, 2021, the separate or joint Disability Appeals Committees of the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System in accordance with KRS 61.665(4) and 78.545(11).

(21) "Department" is defined by KRS 61.510(3).

(22) "Dependent child" is defined by KRS 16.505(17) and 78.510(49).

(23) "Disability retirement date" is defined by KRS 16.505(16), 61.590(5)(b), and 78.510(51).

(24) "Duty-related injury" is defined by KRS 61.621(2) and 78.545(20).

(25) "Early retirement date" is defined by KRS 16.505(20), 61.590(5)(c), and 78.545(4).

(26) "Employee" is defined by KRS 61.510(5) and 78.510(6).

(27) "Employer" is defined by KRS 16.505(3), 61.510(6), and 78.510(7).

(28) "Employer's effective cessation date" is defined by KRS 61.522(1)(c) and 78.535(1)(c).

(29) "End of day" means:

(a) 11:59 p.m. Eastern Time, on the date referenced; and

(b) If the date referenced falls on a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the time period shall be met if the application, documentation, form, notice, or other requested or required information is filed or submitted no later than 11:59 p.m. Eastern Time on the next business day following the weekend, holiday, or date of closure.

(30) "Examiner" means the medical examiners as established in KRS 61.665 and 78.545(11).

(31) "File" means a form or document has been received at the retirement office by mail, fax, secure email, in-person delivery, or via Self-Service on the Web site maintained by the agency (if available).

(32) "Final compensation" is defined by KRS 16.505(9), 61.510(14), and 78.510(14).

(33) "Final rate of pay" is defined by KRS 16.505(10), 61.510(15), and 78.510(15).

(34) "Fiscal year" is defined by KRS 16.505(32), 61.510(19), and 78.510(19).

(35) "Full-time student" means a person enrolled in:

(a) A postsecondary program of study that meets the full-time student requirements of the institution in which he or she is enrolled;

(b) A continuing education or training program that meets the full-time requirements of the program or institution in which he or she is enrolled; or

(c) High school or a GED program that meets the full-time student requirements of the program or institution in which he or she is enrolled.

(36) "Gainful employment" means work in any capacity that is, or can be, performed with regularity and is, or may be, usually done for pay, whether or not pay is received, including seasonal, volunteer, part-time, and on-call work.

(37) "Grandfathered service" is defined by KRS 61.552(9)(b) and 78.545(7).

(38) "Hazardous disability" is defined by KRS 16.505(23) and 78.510(47).

(39) "Hazardous position" means a regular full-time officer as defined by 16.505(22), or a "hazardous position" as defined by 61.592(1)(a), 78.510(42), and 78.5520(1).

(40) "Hazardous service" means the number of years and months of employment as an employee in a hazardous position.

(41) "Hospital and medical insurance plan" is defined by KRS 61.702(1)(a) and 78.5536(1)(a).

(42) "In line of duty" or "act in line of duty" is defined by KRS 16.505(19) and 78.510(48).

(43) "Inactive member" means a member who is not participating in the system.

(44) "Increment" is defined by KRS 61.510(29) and 78.510(44).

(45) "Instructional staff" is defined by KRS 61.510(48).

(46) "Invalid," if used in reference to a form, means that the form does not meet the requirements to be valid, and will not be processed by the agency.

(47) "Last day of paid employment" is defined by KRS 16.505(30), 61.510(32), and 78.510(45).

(48) "Level percentage of payroll amortization method" is defined by KRS 61.510(28) and 78.510(43).

(49) "Medical information" as used in KRS 61.610, 61.615, 61.665, 78.5526 and 78.5528:

(a) Means reports of examinations or treatments; medical signs that are anatomical, physiological, or psychological abnormalities that can be observed; psychiatric signs that are medically demonstrable phenomena indicating specific abnormalities of behavior, affect, thought, memory, orientation, or contact with reality; or laboratory findings that are anatomical, physiological, or psychological phenomena that can be shown by medically acceptable laboratory diagnostic techniques, including chemical tests, electrocardiograms, electroencephalograms, X-rays, and psychological tests; and

(b) Does not mean written statements from medical providers alone unless accompanied by supporting contemporaneous records as established in paragraph (a) of this subsection.

(50) "Member" is defined by KRS 16.505(21), 61.510(8), and 78.510(8).

(51) "Membership date" is defined by KRS 16.505(35), 61.510(36), and 78.510(33).

(52) "Month" is defined by KRS 16.505(34), 61.510(35), and 78.510(32).

(53) "Monthly average pay" is defined by KRS 16.505(41), 61.510(45), and 78.510(52).

(54) "Monthly contribution rate" means the maximum contribution the systems will pay toward the premium of a retired member based on the amount:

(a) Determined by the boards as established in KRS 61.702(1)(b), 61.702(4)(b) through (d), 78.5536(1)(b), and 78.5536(4)(b) through (d) for a retired member who began participating in the systems on or before June 30, 2003; or

(b) Per month earned by the retired member based on years of service as established in KRS 61.702(4)(e) and 78.5536(4)(e) for a retired member who began participating in the systems on or after July 1, 2003..

(55) "Nominal fee" is defined by KRS 61.510(43) and 78.510(40).

(56) "Non-core services independent contractor" is defined by KRS 61.5991(9).

(57) "Nonhazardous position" is defined by KRS 61.510(44) and 78.510(41).

(58) "Nonparticipating position" means any position of employment with a participating employer other than a regular full-time position or a regular full-time officer position.

(59) "Normal retirement age" means the age at which the member meets the requirements for his or her normal retirement date.

(60) "Normal retirement date" is defined by KRS 16.505(15), 61.510(18), 61.590(5)(a), and 78.510(18).

(61) "Objective medical evidence" is defined by KRS 16.505(31), 61.510(33), and 78.510(46).

(62) "Officers and employees of the General Assembly" is defined by KRS 61.510(20).

(63) "Optional allowance" is defined by KRS 16.505(18).

(64) "Participant" is defined by KRS 16.505(36), 61.510(37), and 78.510(34).

(65) "Participating" is defined by KRS 16.505(33), 61.510(34), and 78.510(31).

(66) "Participating employer" means any employer that participates in one (1) of the systems operated by the agency.

(67) "Participating position" means a regular full-time position, a regular full-time officer position, or other positions that meet the requirements of KRS 61.680(6)(a) and 78.545.

(68) "Participation date" means the earlier of "membership date" as defined in this section or the date on which the member began participating in another state-administered retirement system if the member has not retired or taken a refund from the other state-administered retirement system.

(69) "Past service" is defined by KRS 61.552(5)(a) and 78.545(7).

(70) "Person" means a natural person.

(71) "Premium" means the monthly dollar cost required to provide hospital and medical insurance plan coverage for a recipient, a recipient's spouse, or a disabled or dependent child.

(72) "Prior service" is defined by KRS 16.505(5), 61.510(11), and 78.510(11).

(73) "Provide," if used in reference to a form or other document, means the agency makes a form or document available on its Web site (if appropriate) or by mail, fax, secure email, or via Self-Service on the Web site maintained by the agency (if available).

(74) "Qualified domestic relations order" is defined by KRS 16.505(37), 61.510(38), and 78.510(35).

(75) "Recipient" is defined by KRS 16.505(26), 61.510(27), and 78.510(26).

(76) "Reemployment" means the retired member's first date of employment with a participating employer following his or her most recent retirement date.

(77) "Regular full-time officers" is defined by KRS 16.505(22).

(78) "Regular full-time position" is defined by KRS 61.510(21) and 78.510(21).

(79) "Retired member" is defined by KRS 16.505(11), 61.510(24), and 78.510(23).

(80) "Retirement allowance" is defined by KRS 16.505(12), 61.510(16), and 78.510(16).

(81) "Retirement date" means a member's effective retirement date as established in KRS 61.590(5) and 78.545(4).

(82) "Retirement office" is defined by KRS 16.505(28), 61.510(31), and 78.510(29).

(83) "School board" is defined by KRS 78.510(4).

(84) "School term or year" is defined by KRS 78.510(28).

(85) "Self-Service Web site" means the secure Member Self-Service or Retiree Self-Service agency Web site.

(86) "Service" is defined by KRS 16.505(6), 61.510(9), and 78.510(9).

(87) "State" means the Commonwealth of Kentucky.

(88) "State-administered retirement system" means the retirement systems with reciprocity as established in KRS 61.680.

(89) "Submit" means the required form, documentation, report, or payment has been received by the retirement office via mail, fax, electronic mail, the Self-Service Web site, the Employer Self-Service Web site, or other mode specifically detailed in an administrative regulation.

(90) "Systems" means the State Police Retirement System (KRS 16.505 through 16.652), the Kentucky Employees Retirement System (KRS 61.510 through 61.705), and the County Employees Retirement System (KRS 78.510 through 78.852).

(91) "Total and permanent disability" is defined by KRS 16.582(1)(a) and 78.5524(1)(a)1.

(92) "Valid," if used in reference to a form, means that all required sections of a form are completed, the form has been fully executed by the required person or the person's legal representative, and all supporting documentation required by the form is included with the form.

(93) "Volunteer" is defined by KRS 61.510(42) and 78.510(39).

History

• RELATES TO: KRS 16.505 - 16.652, 61.510 - 61.705, 78.510 - 78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pension Authority on behalf of the Kentucky Retirement Systems and the County Employees Retirement System to promulgate administrative regulations that are consistent with the provisions of KRS 16.505 through 16.652, 61.505, 61.510 through 61.705, and 78.510 through 78.852. This administrative regulation establishes definitions for terms used in 105 KAR Chapter 1.
• History: 18 Ky.R. 1692; 2195; eff. 1-10-1992; 22 Ky.R. 1325; 3-7-1996; 31 Ky.R. 785; 1049; eff. 1-4-2005; 33 Ky.R. 2-2-2007; 44 Ky.R. 258; eff. 11-3-2017; 49 Ky.R. 1535, 1899; eff. 7-5-2023; 50 Ky.R. 2259; 51 Ky.R. 247; eff. 11-5-2024.

105 KAR 1:020 Reciprocal program between CERS, KERS, SPRS, TRS, JRP and LRP {#sec-105-kar-1-020 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:020}

Section 1. Definitions. "Death benefit" or "survivor benefit" means a payment to a beneficiary of a deceased member who met the eligibility requirements of KRS 16.578(1), 61.640(1), or 78.5532(1) on the date of his or her death.

Section 2. General Provisions.

(1) To determine benefits upon the death, disability, or service retirement of a member having an account in more than one (1) state-administered retirement system, the Kentucky Public Pensions Authority shall:

(a) Combine the member's service in all systems;

(b) Determine eligibility in each system based on combined service;

(c) If eligible in any system, determine benefits; and

(d) Check for specific exceptions such as prior service, request for separate account, or special death or disability exception.

(2) The earliest membership date among the systems in which the member has service shall be used to calculate the benefits in each system.

Section 3. Service Retirement.

(1) A member eligible to retire who elects service retirement from one (1) system, shall be paid from all systems in which the member has an account unless he or she requests that his or her accounts be separated.

(2) The "final compensation" shall be calculated by:

(a) For a member with a membership date prior to September 1, 2008, using the five (5) highest, or three (3) highest, if eligible, fiscal years creditable compensation regardless of the system under which the service was earned, except as provided in KRS 61.680(7); or

(b) For a member with a membership date on or after September 1, 2008 but prior to January 1, 2014 who is employed in a:

1. Nonhazardous position, using the five (5) complete fiscal years immediately preceding retirement regardless of the system under which the service was earned, except as provided in KRS 61.680(7). Fiscal years added to the final compensation calculation to reach sixty (60) months shall be added regardless of the system under which the service was earned; or

2. Hazardous position, by using the highest complete fiscal years regardless of the system under which the service was earned, except as provided in KRS 61.680(7). Fiscal years added to the final compensation calculation to reach thirty-six (36) months shall be added regardless of the system under which the service was earned.

(3) Each system shall determine benefit payments on the basis of the final compensation but using only the service earned in that system. Payments shall be made by each system in accordance with its usual procedures. If a member is not eligible for an unreduced benefit, benefits shall be actuarially reduced based on factors adopted by the respective retirement boards.

(4) The retiring member or beneficiary shall be required to elect the same payment option in each system administered by the Kentucky Public Pensions Authority except that a member of the State Police Retirement System or a member with hazardous service may select the "Ten (10) Year Certain" option established in KRS 16.576(4) irrespective of the option chosen for nonhazardous service in another retirement system administered by the Kentucky Public Pensions Authority..

(5) A member may elect to have each system treat his or her service credit in that system without regard to any other service credit, by:

(a) Requesting that his or her accounts be separated by filing a Form 2022, Separation of Accounts; or

(b) Failing to retire from the other state-administered retirement system within one (1) calendar month of his or her effective retirement date with the retirement systems administered by Kentucky Public Pensions Authority. A member shall not be considered to have failed to retire from the other state-administered retirement system on the basis of the other state-administered retirement system's determination, notwithstanding the provisions of KRS 61.680, that the member is only eligible for a refund of contributions from the other state-administered retirement system .

(6) If so requested, "final compensation" shall be based on the creditable compensation earned under each system separately.

Section 4. Disability Retirement.

(1)

(a) If a contributing member of one (1) of the six (6) state-administered retirement systems qualifies for disability benefits, all systems under which the combined service meets service requirements shall participate in benefit payments unless accounts are separated by provisions of KRS 61.680(2)(b).

(b) Each system shall calculate benefits using the formula in effect in that system.

(c) Service added to County Employees Retirement System, Kentucky Employees Retirement System and State Police Retirement System accounts in accordance with the appropriate disability formula established in 105 KAR 3:210, Section 11, shall be prorated between system accounts based on a percentage of actual earned service in each system unless such proration conflicts with maximum added service permitted by law governing each system.

(d) Service added to Teachers Retirement System accounts pursuant to KRS 161.661(4) shall be actual earned service and upon such an award of service the Kentucky Public Pensions Authority shall recalculate the service to be added to the County Employees Retirement System, Kentucky Employees Retirement System, and State Police Retirement System accounts using the appropriate disability formula as established in 105 KAR 3:210, Section 11.

(2) If the combined service of a member meets service requirements in only one (1) system, then that system shall pay benefits under the disability formula and the other system shall pay:

(a) Benefits based on separate accounts if the member elects to maintain separate accounts;

(b) An actuarial accrued benefit based on the member's age, service and final compensation; or

(c) A refund, if requested by the member.

(3) The medical requirements for disability benefits shall be those of the system to which the member last contributed if combined service meets service requirements of that system. If service requirements are met in only one (1) system, the medical requirements of that system shall prevail.

(4) The process established in this section shall also be followed if the member qualifies for duty-related injury or death benefits pursuant to KRS 61.621.

Section 5. Survivor Benefit. A member contributing to any of the six (6) state-administered retirement systems who has combined service sufficient to qualify his or her beneficiaries for a survivor benefit shall have his or her County Employees Retirement System, Kentucky Employees Retirement System, or State Police Retirement System benefits computed under the regular survivor formula based on his or her service in each of the three (3) systems.

Section 6. Service Purchases. A member having valid service credit in more than one (1) of the retirement systems administered by Kentucky Public Pensions Authority who is eligible to purchase service credit may elect to purchase service credit in one (1) system, or may divide the service credit between the systems permitting purchase. If service is to be divided:

(1) The same years of service shall not be used in more than one (1) system; and

(2) Each system shall calculate the costs of the retirement credit pursuant to the statutes and administrative regulations of that system.

Section 7. Medical Insurance.

(1) A retiring member with service in more than one state-administered retirement system shall have his or her total service in all systems combined to determine his or her eligibility for medical insurance benefits. The systems shall share the cost of the member's premium under this section based on the member's combined service.

(2) If the member meets the minimum eligibility requirements, the member may elect to participate in the insurance program established in KRS 6.577, 16.645, 21.427, 61.702, 78.5536, or 161.675. The premium paid from the insurance funds shall not be more than 100 percent of the single premium amount adopted by the respective boards of trustees or more than the maximum percentage payable under the program established under KRS 6.577, 16.645, 21.427, 61.702, 78.5536, or 161.675.

(3)

(a) If the member elects to participate in the program under KRS 61.702 or 78.5536, the member's service in the state-administered retirement systems shall be combined to determine the applicable percentage that shall be paid toward his or her individual coverage under KRS 61.702(3) and 78.5536(3).

(b) The state-administered retirement systems shall pay a pro rata share of the member's premium based on the service in each system expressed as a percentage of total service credit earned in all systems not to exceed the amount of the single monthly contribution rate adopted by the Board of Trustees of Kentucky Retirement Systems or the Board of Trustees of County Employees Retirement System.

1. The amount paid by the Kentucky Teachers' Retirement System shall not exceed the amount of the single monthly contribution rate adopted by the Board of Trustees of the Kentucky Teachers' Retirement System.

2. The Kentucky Teachers' Retirement System shall not pay a percentage of the premium for a spouse or dependents.

(4)

(a) If the member elects to participate in the program under KRS 161.675, the member's service in the state-administered retirement systems shall be combined to determine the applicable percentage that shall be paid under KRS 161.675(4).

(b) The state-administered retirement systems shall pay a pro rata share of the member's premium based on the service in each system expressed as a percentage of total service credit earned in all systems, not to exceed the amount paid toward the monthly contribution adopted by the Board of Trustees of Kentucky Teachers' Retirement System.

1. The amount paid by the Kentucky Employees Retirement System, County Employees Retirement System, and State Police Retirement System shall not exceed the amount of the single monthly contribution adopted by the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of County Employees Retirement System.

2. The Kentucky Employees Retirement System, County Employees Retirement System and State Police Retirement System shall not pay a percentage of the premium for a spouse or dependents.

(c) Premiums payable pursuant to KRS 161.675 shall be paid by the Kentucky Teachers' Retirement System. The County Employees Retirement System, Kentucky Employees Retirement System, and State Police Retirement System shall reimburse the Teachers' Retirement System for the portion of the premium attributable to service in those systems.

(5)

(a) If the member elects to participate in the program under KRS 6.577 or 21.427, the member's service in the systems shall be combined to determine the applicable percentage that shall be paid under KRS 21.427(2)(a).

(b) The state-administered systems shall each pay a pro rata share of the member's premium based on the service in each system expressed as a percentage of total service credit earned in all state-administered retirement systems, not to exceed the amount paid toward the monthly contribution adopted by the Board of Trustees of the Judicial Form Retirement System.

1. The amount paid by the County Employees Retirement System, Kentucky Employees Retirement System, and State Police Retirement System shall not exceed the amount of the single monthly contribution adopted by the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement Systems.

2. The County Employees Retirement System, Kentucky Employees Retirement System, and State Police Retirement System shall not pay a percentage of the monthly contribution for a spouse or dependents.

(c) Premiums payable pursuant to KRS 6.577 or 21.427 shall be paid by the Judicial Form Retirement System. The County Employees Retirement System, Kentucky Employees Retirement System, and State Police Retirement System shall reimburse Judicial Form Retirement System for the portion of the premium attributable to service in those systems.

(6)

(a) Premiums payable pursuant to KRS 61.702 and 78.5536 shall be paid by the Kentucky Employees Retirement System, County Employees Retirement System, and State Police Retirement System. The Kentucky Teachers' Retirement System or Judicial Form Retirement System shall reimburse the systems for the portion of the premium attributable to service in that system.

(b) Premiums payable pursuant to KRS 161.675 shall be paid by the Kentucky Teachers' Retirement System. The Kentucky Employees Retirement System, County Employees Retirement System, and State Police Retirement System shall reimburse the system for the portion of the premium attributable to service in those systems.

Section 8. Incorporation by Reference.

(1) Form 2022, "Separation of Accounts," 11/25, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601-6124, Monday through Friday, 8 a.m. to 4:30 p.m. and on the agency's website at kyret.ky.gov.

History

• RELATES TO: KRS 6.500-6.577, 16.505 – 16.652, 21.345-21.570, 61.510-61.705, 78.510-78.990, 161.600(3), 161.661, 161.675
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.645(9)(e), 61.680, 78.552
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with the requirements of KRS 13A.105(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) and 61.645(9)(e) authorize the Board of Trustees of the Kentucky Public Pensions Authority to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 16.505 to 16.652, 61.505 to 61.705, and 78.520 to 78.852. KRS 61.680 and 78.5542 provide for the combining of retirement accounts for public employees having a retirement account in more than one (1) of the following state administered retirement systems: County Employees Retirement System, Kentucky Employees Retirement System, Judicial Retirement Plan, Legislators Retirement Plan, State Police Retirement System and Teachers' Retirement System. This administrative regulation establishes requirements to implement KRS 61.680 and 78.5542.
• History: 105 KAR 001:020. 1 Ky.R. 717; eff. 5-14-1975; 9 Ky.R. 1162; eff. 5-4-1983; 19 Ky.R. 962; eff. 12-9-1992; 29 Ky.R. 755; 1243; eff. 11-12-2002; 31 Ky.R. 380; eff. 11-5-2004; TAm eff. 3-5-2019; Crt eff. 3-5-2019; 52 Ky.R. 997, 1505; eff. 6-2-2026; TAm eff. 9-10-2026.

105 KAR 1:150 Installment purchase procedures {#sec-105-kar-1-150 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:150}

Section 1. Definitions.

(1) "Amortization schedule" means a table of installment payments for the entirety of the repayment period that includes each month's interest, principal, and remaining balance.

(2) "Omitted service" is defined by KRS 61.552.

(3) "Recontribution of a refund" is defined by KRS 61.552.

(4) "Remit" means to make payment to the agency through the normal State Treasurer Office process.

(5) "Termination date" means the date on which the member has ceased or will cease his or her employment with the participating employer.

Section 2. Eligibility for installment payment plan.

(1) An employee may purchase or regain service credit by making installment payments in lieu of a lump-sum pursuant to KRS 16.645, 61.552(9)(a)2., and 78.545.

(2) Installment payment plans shall be allowed for participating employees of a participating employer if:

(a) The employee has complied with all requirements to purchase service credit pursuant to 105 KAR 4:130 and 1:260;

(b) One (1) year of installment payments shall be made for each $1,000 or any part thereof of the total cost, except that the total period allowed for installments shall not be less than one (1) year and shall not exceed five (5) years;

(c) The agency has provided notification to the employee that he or she is eligible to purchase or regain service by installment payments; and

(d) The employer certifies its agreement to deduct and remit installment payments on all participating employees by submitting to the agency a completed Form 7280, "Employer Certification for Installment Purchase of Service," incorporated by reference in 105 KAR 4:120.

(3) The agency may refuse to allow new installment purchase agreements for employees of an employer that has previously failed to deduct and remit installment payments for other employees pursuant to administration regulations established in KAR Title 105.

(4)

(a) Multiple service purchases may be combined under a single installment purchase, except that an employee shall not make more than one (1) installment purchase at the same time; and

(b) Once multiple service purchases have been combined in an installment purchase, the employee shall not separate the purchases or pay a portion of one (1) of the purchases even if the installment payment plan ceases.

Section 3. Calculation and Selection.

(1) The agency shall:

(a) Calculate the monthly installment payment necessary to pay the cost of the service being purchased pursuant to KRS 16.645, 61.552(9)(c)1., and 78.545; and

(b) Provide the calculations and monthly payment options to the employee on a:

1. After Tax Installment Purchase of Service Agreement pursuant to KRS 61.645, 61.552(9)(a)2.b., and 78.545, and shall not exceed the limitations for annual additional contributions established in 26 U.S.C. 415; and

2. Before Tax Installment Purchase of Service Agreement pursuant to KRS 16.645, 61.552 (9)(a)2.a, and 78.545.

(2) The employee shall choose, complete, and file his or her selected payment option on the applicable installment agreement.

(3) Installment payments shall be established in accordance with KRS 16.645, 61.552(9)(c)5, and 78.545.

Section 4. Administration of the Installment Purchase of Service Agreement.

(1) Upon receipt of a valid After Tax Installment Purchase of Service Agreement or Before Tax Installment Purchase of Service Agreement, the agency shall provide the employee with an amortization schedule.

(2) After receipt of any down payment by transfer or rollover from a qualified retirement plan or deferred compensation arrangement pursuant to Section 7 of this administrative regulation, if applicable, the agency shall notify the employee and employer of the:

(a) Amount of the monthly installment payments;

(b) Total installment payments; and

(c) Dates the installment payments shall begin and shall end.

(3) The agency shall reject an Installment Purchase of Service Agreement and shall calculate a new cost of the purchase if the employee:

(a) Does not file a valid Installment Purchase of Service Agreement by the deadline for purchase of the service credit;

(b) Fails to fully and properly complete and sign the Installment Purchase of Service Agreement;

(c) Indicates that a down payment is to be made, but the employee does not pay the down payment pursuant to Section 7 of this administrative regulation; or

(d) Fails to file a corrected valid Installment Purchase of Service Agreement by the end of the thirtieth (30th) calendar day from a recalculation of the cost to purchase.

(4) If the agency rejects an Installment Purchase of Service Agreement pursuant to subsection (3) of this section, any down payment shall be refunded to the member or, if rollover or transfer, returned to the qualified retirement plan or deferred compensation arrangement.

Section 5. After Tax Installment Purchase of Service Agreement.

(1) The employer shall be solely responsible for withholding sufficient amounts through payroll reduction from the employee to allow the payment of After Tax Installment Purchase of Service Agreement installments.

(2) If the employee is not employed twelve (12) months each fiscal year, the employer shall withhold sufficient funds from the employee's wages to allow the employer to remit the required reductions with the employer's contribution reports during any months in which the employee is not paid.

(3)

(a) The employee shall notify the agency in writing if he or she desires to terminate the agreement.

(b) Upon receipt of the notice from the employee, the agency shall notify the employee and employer of the date to stop reductions.

(c) Payments made prior to cancellation shall be credited in accordance with Section 8(2) of this administrative regulation. Any payment amount remaining that does not purchase a full month of service credit shall be refunded.

(4) The employee may request a payoff amount for the After Tax Installment Purchase of Service Agreement and shall have until the end of the sixtieth (60th) calendar day from the payoff date, requested by the employee and agreed to by the agency, to pay the installment agreement in full by lump sum payment, but the payoff shall be made prior to the effective date of retirement to add one or more service purchases if they are otherwise qualified to do so.

(5) The employee may have the installment agreement recalculated to add one (1) or more service purchases if he or she is otherwise qualified to do so.

(6) The employee shall not receive a return of the payroll reductions pursuant to this administrative regulation except pursuant to the normal disbursement procedures for a member's accumulated contributions or accumulated account balance under KRS 61.575 and 78.640.

(7) The After Tax Installment Purchase of Service Agreement shall be void if the employer fails to remit installment payments in accordance with Section 8(1) of this administrative regulation for sixty (60) calendar days. The employee may request a:

(a) Payoff pursuant to subsection (4) of this section; or

(b) New installment agreement for the balance if they are otherwise qualified to do so.

Section 6. Before Tax Installment Purchase of Service Agreement.

(1)

(a) A valid Before Tax Installment Purchase of Service Agreement including all specified payroll reduction authorizations, amounts, and deductions, shall be an irrevocable, binding agreement if properly and fully completed and signed by the employee, authorized by the employer, and accepted by the agency.

(b) Once the employee enters into the irrevocable agreement:

1. Prepayments shall not be accepted for the purchase of service credit that is subject to the installment purchase agreement; and

2. The employee shall not receive the payroll reduction or installment payment directly instead of having it contributed to the systems.

(c) For the purposes of this section, after-tax contributions shall only be received to the extent allowed by 26 U.S.C. 415.

(d) Payroll reductions shall cease only after the installment purchase agreement has expired by its terms or upon:

a. The employee's death if the employee's beneficiary pays the remaining amount owed by lump sum payment using after-tax dollars by the end of the sixtieth (60th) calendar day from the employee's date of death.

b. If the balance is not paid, the beneficiary shall receive credit for each one (1) month period of service credit purchased. The beneficiary shall receive any installment payment that had already been made when the employee's death occurred, and that was not used to purchase a one (1) month period of service credit pursuant to the normal disbursement procedures for a member's accumulated contributions or accumulate account balance pursuant to KRS 61.575 and 78.640; or

a. Termination of the member's employment if the member pays the remaining amount owed by lump sum payment by the end of the sixtieth (60th) calendar day from the member's termination date but prior to the member's effective retirement date.

b. If the balance is not paid, the member shall only be entitled to receive credit for each one (1) month period of service credit actually purchased. The member shall receive any contributions that were not used to purchase one (1) month period of service credit pursuant to the normal disbursement procedures for the member's accumulated contributions or accumulated account balance pursuant to KRS 61.575 and 78.640.

(2)

(a) If a valid Before Tax Installment Purchase of Service Agreement is on file, the monthly reductions for installment payments shall be:

1. Through employer pick-up contributions established in 26 U.S.C. 414(h)(2); and

2. Remitted to the agency from the same funding source used to pay earnings to employees.

(b)

1. The employer shall pick up these contributions by a corresponding reduction in the cash salary of the employees;

2. Although designated as employee contributions, the contributions shall be paid by the employer in lieu of contributions by the employee; and

3. The pick-up shall:

a. Not commence earlier than the month after the authorization is signed; and

b. Only be applicable to contributions to the extent that the compensation that is reduced for the contributions is limited to compensation earned for services after the effective date of the pick-up.

(3) Employee contributions picked up pursuant to this section shall:

(a) Be treated as tax-deferred employer pick-up contributions pursuant to 26 U.S.C. 414(h);

(b) Not be included in the gross income of the employee until they are distributed or made available pursuant to 26 U.S.C. 414(h);

(c) Not have federal income taxes withheld;

(d) Be remitted to the agency in accordance with Section 8 of this administrative regulation; and

(e) Be credited to the employee's account and treated, for all other purposes, as if the amount were part of the employee's annual compensation.

Section 7. Down Payment.

(1) A down payment shall be made by:

(a) Completing and filing a valid Form 4170, "Direct Transfer/Rollover Authorization Form", incorporated by reference in 105 KAR 1:330, for the amount of the down payment; or

(b) Personal check if the service purchase is for:

1. Recontribution of a refund as defined by Section 1 of this administrative regulation;

2. Omitted service as defined by Section 1 of this administrative regulation; or

3. Grandfathered service as defined by 105 KAR 1:001.

(2) The down payment shall be made no later than the end of due date indicated on the Installment Purchase of Service Agreement.

Section 8. Remission of Installment Payments and Service Credit.

(1) The employer shall remit installment payments to the agency:

(a) As required by the Installment Purchase of Service Agreement; and

(b) In conjunction with the employer's contribution report as established in 105 KAR 4:140.

(2) The amount required to purchase one (1) month of service credit shall be calculated by dividing the total of the installment payments due under the agreement by the number of months of service credit being purchased. Upon receipt of installment payments equal to this amount, the agency shall credit one (1) month of service credit to the member's account.

(3) On the end date of the Installment Purchase of Service Agreement:

(a) The agreement shall be terminated;

(b) Any payments received shall be credited for service; and

(c) Any payment amount remaining that does not purchase a full month of service credit shall be refunded.

Section 9. Suspension of Installment Purchase of Service Agreement Due to Military Service.

(1) The employer shall advise the agency in writing or by appropriate personnel action that the employee is on active military duty, and the employee's installment purchase agreement shall be suspended during the period of military duty for which the employee does not receive creditable compensation from the employer.

(2) When an employee who did not receive creditable compensation during military leave returns to employment, the employee's installment purchase agreement shall not be recalculated and the employer shall resume remitting the remaining reductions unless the employee terminates or pays the balance of his or her After Tax Installment Purchase of Service Agreement pursuant to Section 5 of this administrative regulation.

Section 10. Suspension of Installment Purchase Service Agreement Due To Sick Leave Without Pay.

(1) The employer shall notify the agency in writing or by appropriate personnel action that the employee is on sick leave without pay, and the installment purchase agreement shall be suspended during the period of sick leave without pay.

(2) Upon return to the employer from the period of sick leave without pay, the employee's installment purchase agreement shall not be recalculated. The employer shall resume remitting the remaining reductions unless the employee terminates or pays the balance of his or her After Tax Installment Purchase Service Agreement pursuant to Section 5 of this administrative regulation.

History

• RELATES TO: KRS 16.560, 16.645(19), 61.552(9), 61.575, 78.545(7), 78.640, 26 U.S.C. 414(h), 415, 38 U.S.C. 43
• STATUTORY AUTHORITY: KRS 16.645, 61.505(1)(g), 61.552(9), 78.545
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority on behalf of Kentucky Retirement Systems and County Employees Retirement System to promulgate administrative regulations that are consistent with and necessary or proper to carry out the provisions of KRS 16.505 to 16.652, 61.505 to 61.705, and 78.510 to 78.852. KRS 16.645, 61.552(9), and 78.545 permit an employee participating in the Kentucky Retirement Systems or the County Employees Retirement System to purchase service credit by payroll deducted installments. This administrative regulation establishes the process and forms related to this option, and provides for the preservation of installment purchases for military personnel called into service.
• History: 105 KAR 001:150. 18 Ky.R. 924; eff. 11-8-1991; 19 Ky.R. 965; eff. 12-9-1992; 21 Ky.R. 1519; eff. 2-8-1995; 27 Ky.R. 1045; 1441; eff. 12-21-2000; 28 Ky.R. 1668; 2325; eff. 5-16-2002; 29 Ky.R. 758; 1245; eff. 11-12-2002; 2724; 30 Ky.R. 17; eff. 7-17-2003; TAm eff. 6-28-2019; Crt eff. 6-28-2019; 52 Ky.R. 1000, 1507; eff. 6-2-2026; TAm eff. 9-10-2026.

105 KAR 1:170 Membership form requirements {#sec-105-kar-1-170 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:170}

Section 1. An employee eligible for participation on the date his or her employer first participates shall complete a Form 2010, "Election or Rejection of Participation", designating his or her desire to participate in or waive participation and benefits in the retirement system. The original form shall be kept on file at the agency.

Section 2. Within thirty (30) days of participation, an employee who is required to participate or who elects to participate may complete a Form 2001, "Membership Information". The membership form shall be kept on file at the agency.

Section 3. An employee shall file with the agency a validForm 2035, "Beneficiary Designation" to designate or change a beneficiary prior to retirement. If a valid beneficiary designation is not on file at the agency, the employee's estate shall be the beneficiary.

Section 4.

(1) If an employee is participating in a hazardous position, as defined by KRS 61.592, that meets the definition of a regular full-time position under KRS 61.510(21) or 78.510(21) based solely upon his or her service in a hazardous position, and is simultaneously employed in a nonhazardous position with a different participating employer that is not considered a regular full-time position based solely upon his or her service in the nonhazardous position, the employee may make a one (1) time irrevocable election within thirty (30) days of employment in the nonhazardous position to not participate in the system for his or her employment in the nonhazardous position with that employer by filing with the agency a valid Form 2014, "Rejection of Nonhazardous Part-Time Participation".

(2) If the employee does not make an election pursuant to subsection 1 of this section, the employee shall participate in both systems simultaneously and his or her service shall be prorated between the systems pursuant to Section 2 of 105 KAR 1:320.

(3) If the employee makes an election pursuant to subsection 1 of this section, the employer that participates in the system in which the employee rejected participation shall be notified that it shall not report creditable compensation or contributions on the employee while the member is employed by the nonhazardous employer. If contributions were reported prior to the employee making an election, the employer and employee contributions shall be refunded to the employer and employee and all service credit under that system shall be deleted from the employee's account for the period of simultaneous employment.

Section 5. Pursuant to KRS 61.625, a former employee who is not eligible to retire may request a refund of his or her account by filing with the agency a validForm 4525, "Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection". The agency shall not issue a refund to a member unless the member has terminated employment with all employers participating in the retirement system from which the member is attempting to take a refund.

Section 6.

(1) A member may update his or her contact information on file with the agency:

(a) On the Self-Service website at http://myretirement.ky.gov;

(b) By telephone with an agency-issued PIN; or

(c) By submitting a valid Form 2040, Change of Contact Information.

(2) An attorney in fact, guardian, or other fiduciary shall file a valid Form 2040 with the agency to change contact information on behalf of a member.

Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 2010, "Election or Rejection of Participation", KPPA, 1/2026;

(b) Form 2001, "Membership Information", KPPA, 1/2026;

(c) Form 2035, "Beneficiary Designation", KPPA, 6/2026;

(d) Form 4525, "Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection", KPPA, 1/2026;

(e) Form 2040, "Change of Contact Information", KPPA, 1/2026; and

(f) Form 2014, "Rejection of Nonhazardous Part-Time Participation", 1/2026.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, from the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. or on the agency's website at kyret.ky.gov.

History

• RELATES TO: KRS 16.530, 61.510, 61.525, 61.526, 61.540, 61.542, 61.545, 61.625, 78.510, 78.540, 78.545
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 26 C.F.R. 1.401-1(b)(1)(i), 26 U.S.C. 401(a)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. KRS 16.530, 61.526, and 61.540 require a member of the Kentucky Employees Retirement System, County Employees Retirement System, or State Police Retirement System to file information with the Kentucky Public Pensions Authority as a condition of membership. KRS 61.542 requires a member to file a designation of beneficiary. KRS 61.625 establishes the conditions under which a member may apply for a refund. KRS 78.545 requires that designations of beneficiaries and refunds for County Employees Retirement System members be administered in the same manner as for Kentucky Employees Retirement System members. 26 U.S.C. 401(a) provides that a qualified pension plan shall not make distributions prior to normal retirement age if a separation from service has not occurred. This administrative regulation establishes the information and forms required for membership, that the member shall not receive a refund unless the member has terminated employment, when a member serving simultaneously in hazardous and nonhazardous positions may make an irrevocable election to participate only in the hazardous plan, and how to update member contact information with the agency.
• History: 105 KAR 001:170. 18 Ky.R. 927; 1323; eff. 11-8-1991; 19 Ky.R. 2290; eff. 6-7-1993; 25 Ky.R. 589; eff. 11-20-1998; 29 Ky.R. 762; 1247; eff. 11-12-2002; 35 Ky.R. 103; 536; eff. 10-3-2008; TAm eff. 6-28-2019; Crt eff. 6-28-2019; Crt eff. 6-12-2026; 52 Ky.R. 1377, 1797, 53 Ky.R. 201; eff. 7-8-2026.

105 KAR 1:215 Administrative hearing {#sec-105-kar-1-215 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:215}

Section 1. Definitions.

(1) "Administrative hearing" or "hearing" is defined by KRS 13B.010(2).

(2) "Administrative record" means the official record of hearing as defined by KRS 13B.130.

(3) "Affected person" means a member, retired member, beneficiary, or recipient.

(4) "Agency portal" means an online portal which stores and tracks relevant information related to an administrative hearing held in accordance with KRS Chapter 13B, including:

(a) The evidentiary record;

(b) Notices of scheduled pretrial conferences, status conferences, or hearings; and

(c) Reports, findings, briefs, position statements, reply position statements, exceptions, and orders.

(5) "Authorized agency staff" means employees of the agency who are approved parties to access the agency portal.

(6) "Briefing order" means an order issued by the hearing officer that provides deadlines for the parties to file any of the following:

(a) Position statements and reply position statements; or

(b) Briefs containing procedural, factual, or legal arguments.

(7) "Claimant" means an affected person who has filed an appeal due to a substantial impairment or an employer that is required to pay additional actuarial costs pursuant to KRS 61.598 and 78.545, and whose matter is still pending at the administrative or appellate court levels.

(8) "Entry of appearance" means a written statement filed at the retirement office attesting that a claimant is represented by an attorney in an administrative hearing process held in accordance with KRS Chapter 13B.

(9) "Evidentiary record" means all evidence, including video recordings of the administrative hearing, received and considered by the agency pertaining to a specific claimant's administrative hearing held in accordance with KRS Chapter 13B.

(10) "Final order" is defined by KRS 13B.010(6).

(11) "Hearing officer" is defined by KRS 13B.010(7).

(12) "Informal settlement" means a submission to the agency by either party that concludes a request for an administrative hearing prior to the hearing process being initiated.

(13) "Party" is defined by KRS 13B.010(3).

(14) "Position statement" means a written statement to explain a party's arguments of fact and law based upon the evidentiary record and applicable statutory and case law.

(15) "Recommended order" is defined by KRS 13B.010(5).

(16) "Reply position statement" means a written statement to explain a party's rebuttal arguments of fact and law that address the factual and legal arguments in the opposing party's position statement.

(17) "Substantially impair" means:

(a)

1. The denial, discontinuance, or reduction of an affected person's benefits;

2. The final determination by the agency requires that an affected person repay overpaid benefits; or

3. The final determination by the agency that the affected person is not exempt from the reduction of creditable compensation in accordance with KRS 61.598 and 78.545; and

(b) Does not include calculation methodology found in KRS 16.505-16.652, 61.510-61.705, 78.510-78.852, and KAR Title 105.

Section 2. Agency Portal.

(1) The agency shall provide a unique method for approved parties to access the administrative record, including hearing recordings, memorandums, and any other relevant documentation related to administrative hearings held in accordance with KRS Chapter 13B for the matter in which they are directly involved, in the agency portal. Access shall be granted to the following:

(a) Members of the Administrative Appeals Committee (AAC) or Disability Appeals Committee (DAC) as applicable;

(b) The claimant or the claimant's attorney;

(c) The hearing officer assigned to the matter; and

(d) Authorized agency staff.

(2) If a request for an administrative hearing in accordance with Section 5 of this administrative regulation is received by the agency, the agency shall notify the claimant or the claimant's attorney, as indicated on the request or entry of appearance, of the use of the agency portal for administrative hearings. The notice shall include details concerning:

(a) The use of the affected person's personal email, or his or her attorney's email, and how to provide or update that email for access to the agency portal; and

(b) How to request an exemption from use of the agency portal in accordance with Section 3 of this administrative regulation.

(3)

(a) The claimant or the claimant's attorney, the applicable hearing officer, and authorized agency staff shall receive notification when the following becomes available on the agency portal, as applicable:

1. The evidentiary record;

2. Additional documents when they are received and uploaded;

3. Details of scheduled prehearing conferences, status conferences, or hearings;

4. Any additional information related to the administrative record as it becomes available;

5. Reports, findings, briefs, position statements, reply position statements, exceptions and orders; and

6. Video recordings of the administrative hearing.

(b)

1. The agency shall provide notification to the claimant, or the claimant's attorney, detailing how to file and view documentation for inclusion in the evidentiary record and any other relevant documentation related to administrative hearings held in accordance with KRS Chapter 13B, such as motions, briefs, and exceptions.

2. Documentation shall be filed through mail, electronic mail, in-person delivery, or fax as provided in the notice, and shall be considered in compliance with KRS 13B.080(2).

(4) AAC or DAC members shall receive notification when the evidentiary record is ready for review in the agency portal.

Section 3. Agency Portal Use Exemption.

(1)

(a) A claimant may be exempt from use of the agency portal only if he or she files a completed request in accordance with subsection (2) of this section and meets one (1) of the following criteria:

1. The claimant does not have internet access;

2. The claimant does not have access to a computer, smart phone, or tablet capable of allowing him or her to adequately use the agency portal; or

3. The claimant has an impairment or disability that limits his or her ability to use electronic communications.

(b) There shall not be an agency portal use exemption available for hearing officers, DAC or AAC members, authorized agency staff, or attorneys.

(2)

(a) To request an agency portal use exemption, the claimant shall complete and file a valid Form 2940, Agency Portal Exemption.

(b) Once a valid Form 2940 is on file with the agency, the affected person shall only be granted access to the agency portal if he or she completes and files a new valid Form 2940 electing to withdraw the previously filed exemption request and provides a valid email address.

(c) The last valid Form 2940 on file with the agency shall control whether the affected person has access to the agency portal.

(3) Once the valid Form 2940, Agency Portal Exemption, is processed, the claimant shall receive the administrative record, including hearing recordings, memorandums, and any other relevant documentation related to administrative hearings held in accordance with KRS Chapter 13B for the matter in which he or she is directly involved, via first-class mail, except if a different manner of distribution is required by KRS Chapter 13B.

Section 4. Notification of the Right to Request an Administrative Hearing.

(1)

(a) If the agency issues a final determination which substantially impairs an affected person's benefits or rights under KRS 16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852, except as provided in subsection (2) of this section, the agency shall notify the affected person of the opportunity to request an administrative hearing by the end of day thirty (30) calendar days from the date of the notice. The notification shall be contained in the notice of final determination.

(b) If the agency issues a final determination that an employer is required to pay additional actuarial costs pursuant to KRS 61.598 and 78.545, the agency shall notify the affected employer of the opportunity to request an administrative hearing by the end of day thirty (30) calendar days from the date of the notice. The notification shall be contained in the notice of the final determination.

(2)

(a) If the agency issues a final determination which denies an affected person disability retirement benefits, the agency shall notify the affected person of the opportunity to request an administrative hearing by the end of day 180 calendar days from the date of the notice as prescribed by KRS 61.665(2) and 78.545.

(b) If the agency issues a final determination which reduces or discontinues an affected person's disability retirement benefits, or which denies reinstatement of the affected person's disability retirement benefit, the agency shall notify the affected person of the opportunity to request an administrative hearing by the end of day sixty (60) calendar days from the date of the notice as prescribed by KRS 61.615(3) and 78.5528(3).

(c) The notification shall be contained in the notice of the final determination.

Section 5. Request for an Administrative Hearing.

(1) Each request for an administrative hearing shall be in writing and include a short and plain statement of the basis for the request. The request shall be filed as provided in the notice of the right to appeal and within the timeframes prescribed in Section 4 of this administrative regulation.

(2) Failure of the affected person to request a formal hearing within the prescribed timeframes shall preclude the affected person from requesting an administrative hearing at a later time.

(3) An entry of appearance may be filed with the request for an administrative hearing or at any time during the administrative hearing process.

Section 6. Informal Settlements.

(1)

(a) An informal settlement pursuant to KRS 13B.070(3) is an optional way to settle an appeal. Informal settlements shall only be used if:

1. The issue or issues that prompted the administrative hearing have been resolved;

2. The agency has determined it will not take the agency action that resulted in the request for an administrative hearing; or

3. The claimant wishes to withdraw his, her, or its request for an administrative hearing.

(b) Informal settlements pursuant to KRS 13B.070(3) shall not be used other than as described in paragraph (a) of this subsection.

(2) The submission of an informal settlement pursuant to KRS 13B.070(3) shall be made by the party with the burden of proof under KRS 13B.090(7).

(3) An informal settlement pursuant to KRS 13B.070(3) shall be made in writing and filed with the agency. The informal settlement shall include:

(a) The claimant's or relevant member's first name, last name, and member ID or other personal identifying information; and

(b) A brief statement detailing the purpose of the informal settlement.

(4) An informal settlement pursuant to KRS 13B.070(3) shall only be filed and valid if it occurs:

(a) After a request for administrative hearing has been filed in compliance with Section 5 of this administrative regulation; and

(b) Prior to the agency's distribution of an order scheduling the prehearing conference through the agency portal, as described in Section 2 of this administrative regulation, or by first-class mail.

(5)

(a) If an informal settlement is submitted that meets the qualifications established in subsections (1) through (4) of this section, the matter shall be considered resolved, and the agency shall notify both parties in writing that the matter has been resolved and the administrative hearing shall not proceed.

(b) The written notification in paragraph (a) of this subsection shall state that both parties shall have until the end of day fifteen (15) calendar days from the date the notification is provided to file a written objection to the notification that the administrative hearing shall not proceed.

(6) If a written objection as provided in subsection (5)(b) of this section is:

(a) Filed by the end of day on the 15th calendar day, the administrative hearing requested shall proceed; or

(b) Not filed by the end of day on the 15th calendar day, the administrative hearing requested shall not proceed, and the matter shall not be appealable.

(7) This section shall not prevent the parties from engaging in formal settlements and agreements to present to the hearing officer in accordance with Section 9 of this administrative regulation.

Section 7. Prehearing Conference.

(1) The prehearing conference shall be held telephonically. The agency shall provide notice to the affected person or his or her attorney of the date, time, and instructions for providing a phone number.

(2) The prehearing conference shall be initiated by agency staff and shall be presided over by the hearing officer in accordance with KRS 13B.070. During the prehearing conference, the parties shall prepare stipulations, clarify the issues to be decided, request issuance of subpoenas and orders, and address other matters that will promote the orderly and prompt conduct of the hearing.

(3) If at the conclusion of the prehearing conference either party needs time to submit additional documentation, the hearing officer shall schedule a status conference for follow up.

(4) If at the conclusion of the prehearing conference all documentation is submitted and all parties agree to proceed, an administrative hearing shall be scheduled.

Section 8. Status Conference.

(1) If held, a status conference shall be held telephonically. The agency shall provide notice to the affected person or his or her attorney of the date, time, and instructions for providing a phone number for the status conference.

(2) A status conference may be held to discuss any outstanding issues or documentation from the prehearing conference or a previous status conference.

(3) Additional status conferences may be held until pending issues are resolved and the parties agree to proceed with the administrative hearing.

(4) A post administrative hearing status conference may be held to follow up on cases put on hold for further records in accordance with Section 11(5) of this administrative regulation.

Section 9. Agreed Orders and Motions to Dismiss.

(1) If at any time both parties agree to a settlement on the issue of the pending administrative appeal, a settlement agreement may occur through either an Agreed Order or a Motion to Dismiss filed with the hearing officer.

(2) Pursuant to KRS 13B.080(6), a Motion to Dismiss may be filed with the hearing officer if:

(a) The claimant or agency fails to appear at more than one (1) pre-hearing or status conference, and if the agency fails to reschedule or the claimant fails to contact the agency to reschedule, within fourteen (14) calendar days of the second missed conference;

(b) The claimant or agency fails to participate in any stage of the hearing process, or fails to comply with an order of the hearing officer; or

(c) The claimant decides to discontinue his or her appeal for any reason.

(3) The hearing officer may complete a Recommended Order of Dismissal in accordance with Section 14 of this administrative regulation based on the settlement agreement or Motion to Dismiss filed with him or her in accordance with subsection (1) and (2) of this section.

Section 10. Notice of Administrative Hearing. The agency shall notify the affected person of the date, time, and location of the administrative hearing in accordance with KRS 13B.050(2). The notice shall provide the details about the hearing required by KRS 13B.050(3).

Section 11. Administrative Hearing.

(1) Administrative hearings shall be held at the retirement office in Frankfort or by secure video teleconference.

(2) Administrative hearings shall be conducted in accordance with KRS 13B.010-13B.170. Evidence, testimony, motions, and objections may be introduced during the administrative hearing, and shall be accurately and completely recorded by the agency. The hearing officer may issue subpoenas in accordance with KRS 13B.080(3).

(3) The hearing officer presiding over an administrative hearing shall not be bound by factual or legal findings of other state or federal agencies.

(4) Decisions in administrative hearings shall be based on a preponderance of evidence in the record as it relates to the substantial impairment. The party's burden of proof shall be assigned as established in KRS 13B.090(7).

(a) For determinations pursuant to KRS 61.598(2), the agency shall bear the burden of proof to show the propriety of the agency's final determination that the member's creditable compensation shall be reduced and that no exception as set forth in KRS 61.598(4) applies.

(b) For determinations pursuant to KRS 61.598(5), the employer shall bear the burden of proof to show that the increase in the employee's creditable compensation was the result of a bona fide promotion or career advancement.

(5)

(a) The hearing officer may place the case on hold to allow either party additional time to submit further evidence discussed at the hearing. If this occurs, a deadline to file the additional evidence shall be provided by the hearing officer.

(b) The hearing officer may schedule a status conference to follow up on cases held for further evidence.

Section 12. Close of Evidentiary Record.

(1) The hearing officer shall close the evidentiary record once all evidence has been filed.

(2) After the evidentiary record has been closed, the hearing officer, DAC, orAAC may order the evidentiary record reopened for the submission of additional evidence.

Section 13. Briefing Order.

(1)

(a) After the close of the evidentiary record, each party shall have the opportunity to simultaneously file Position Statements. The parties shall further have the opportunity to simultaneously file a Reply Position Statement to the other party's Position Statement.

(b) The hearing officer shall issue a Briefing Order that details deadlines for filing each of the following:

1. Position Statements;

2. Reply Position Statements; and

3. The Recommended Order, the due date for which shall not exceed sixty (60) calendar days from the deadline for the Reply Position Statements.

(2) The hearing officer shall take the Position Statements and Reply Position Statements provided in accordance with subsection (1) of this section into consideration when completing the Recommended Order in accordance with Section 14 of this administrative regulation.

Section 14. Recommended Order.

(1)

(a) The hearing officer shall submit a Recommended Order to the board that contains a recitation of the evidence, the appropriate findings of fact, and conclusions of law.

(b) The hearing officer's findings of fact and conclusions of law shall be based upon the evidentiary record as a whole.

(c) The hearing officer's findings of fact shall include a finding concerning the credibility of each witness whose testimony is included in the evidentiary record.

(2)

(a) The agency's Executive Director of the Office of Benefits shall approve or deny hearing officer requests for an extension time to file his or her Recommended Order.

(b) If any extension of time is granted for a hearing officer to complete his or her Recommended Order, the agency shall notify the claimant or his or her legal representative when the extension is granted. Each extension shall not exceed thirty (30) calendar days. The hearing officer may request multiple extensions in the same administrative case.

(3) A copy of the hearing officer's Recommended Order shall:

(a) Be mailed by first-class U.S. mail; or

(b) Electronically mailed through the agency portal to any party that provides written consent.

(4) Each party may file written exceptions to the Recommended Order detailing any issue the party has with the Recommended Order no later than the end of day fifteen (15) calendar days from the date the Recommended Order was mailed by first class U.S. mail or, if permitted by law, electronically mailed through the agency portal.

Section 15. Board Findings.

(1) The DAC and AAC shall have the authority to act upon the Recommended Order on behalf of the board pursuant to this section and in accordance with KRS 13B.120, 61.615, 61.645, 61.665, 78.545, 78.5528, and 78.782.

(2)

(a) The DAC or AAC shall have ninety (90) calendar days from the date of the Recommended Order to provide a Final Order of the board.

(b) A Final Order of the board shall be based on substantial evidence appearing in the record as a whole and shall set forth the decision of the board and the facts and law upon which the decision is based.

(c) The DAC or AAC shall act in accordance with KRS 13B.120 regarding the Recommended Order.

Section 16. Notification of Findings.

(1) All parties shall be provided with the Final Order of the board.

(2)

(a) The Final Order of the board shall be provided to the claimant or his or her legal representative by certified mail in accordance with KRS 13B.120. The agency shall immediately enter the fact of mailing in the record.

(b) Service by certified mail is complete upon delivery of the envelope. The return receipt shall be proof of the time, place, and manner of service. The agency shall document and file the return receipt when it is received.

(c) If the envelope is returned with an endorsement showing failure of delivery, that fact shall be documented in the record, and the returned envelope shall be filed in the record. The agency shall make at least one (1) additional attempt to provide the Final Order of the board to the affected person or his or her legal representative by certified mail documenting and filing the outcome in accordance with this subsection.

Section 17. Supplemental Copies of an Administrative Record.

(1) A claimant, or his or her attorney, may request a supplemental paper copy of all or part of the administrative record at a rate of ten (10) cents per page, cost of postage, and staff time to process the request consistent with KRS 61.874, if the claimant, or his or her attorney:

(a) Originally received a paper copy of the administrative record;

(b) Met an exemption to receive a paper copy of the administrative record under Section 3 of this administrative regulation; or

(c) No longer has access to the agency portal.

(2) The claimant, or his or her attorney, may request a supplemental copy of all or part of the administrative record on an approved data storage device. Supplemental copies shall be provided at the following rates, if the claimant, or his or her attorney met one (1) of the requirements identified in subsection (1)(a)-(c) of this section:

(a) Ten (10) dollars for each approved data storage device;

(b) Cost of postage; and

(c) Staff time to process the request consistent with KRS 61.874.

(3)

(a) The supplemental copy of the administrative record shall not be mailed or otherwise provided to the claimant, or his or her attorney, until the applicable fees described in subsection (1) or (2) of this section are paid in full.

(b) The agency shall provide the amount of the cost for the applicable supplemental copy in accordance with subsection (1) or (2) of this section to the claimant, or his or her attorney.

(c) Payment for the supplemental copy shall be made by check or money order for the full amount owed and made payable to the Kentucky State Treasurer. The payment shall be mailed or delivered in-person to the retirement office.

Section 18. Judicial Review. Any affected person aggrieved by a Final Order of the board may seek judicial review after all administrative appeals have been exhausted by filing suit in the Franklin Circuit Court within the time period prescribed in KRS 13B.140.

Section 19. Incorporation by Reference.

(1) Form 2940, "Agency Portal Exemption", updated June 2023, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the agency Web site at kyret.ky.gov.

History

• RELATES TO: KRS 13B.010-13B170, 16.505-16.652, 61.510-61.705, 78.510-78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate all administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.645(16) and 78.782(16) provide that an affected person aggrieved by a decision of the agency, which is not a determination relating to disability retirement benefits, or an employer that is required to pay additional actuarial costs pursuant to KRS 61.598 and 78.545, may have the right to request an administrative hearing prior to the filing of an appeal in court. KRS 61.615(3), 61.665(3), 78.545, and 78.5528(3) provide that an affected person whose disability retirement benefits have been denied, reduced, discontinued, or denied for reinstatement may have the right to request an administrative hearing prior to filing of an appeal in court. This administrative regulation establishes the administrative appeal procedures.
• History: 18 Ky.R. 934; 1326; eff. 11-8-1991; 19 Ky.R. 969; eff. 12-9-1992; 21 Ky.R. 1527; eff. 2-8-1995; 22 Ky.R. 777; eff. 12-7-1995; 29 Ky.R. 770; 1252; eff. 11-12-2002; TAm eff. 3-5-2019; Crt eff. 3-5-2019; 50 Ky.R. 1168, 1704, 1865; eff. 6-4-2024.

105 KAR 1:300 Determination of service credit for local school board classified employees {#sec-105-kar-1-300 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:300}

Section 1. For school years beginning July 1, 2000 and after, upon the employee's completion of the school year, termination, or death, whichever occurs first, the retirement system shall determine each employee's fiscal year service credit as established in this section.

(1)

(a) The employee's actual days worked, as reported by the school board, shall be divided by twenty (20) to determine the number of months and fractional months worked during the fiscal year.

(b) The employee's total wages shall be divided by the hourly rate reported by the school board to determine the total number of hours worked during the fiscal year.

(c) The employee's total number of hours worked shall be divided by the employee's months and fractional months worked to determine if the employee worked an average of at least eighty (80) hours per month.

(2)

(a) If the employee does not work an average of at least eighty (80) hours per month over the number of actual days worked, the employee's contract days, as reported by the school board, shall be divided by twenty (20) to determine the number of months and fractional months worked during the fiscal year.

(b) The employee's total wages shall be divided by the hourly rate reported by the school board to determine the total number of hours worked during the fiscal year.

(c) The employee's total number of hours worked shall be divided by the employee's months and fractional months worked to determine if the employee worked an average of at least eighty (80) hours per month.

(3) If the employee does not work an average at least eighty (80) hours per month over the number of actual days worked or contract days, the service credit shall be disallowed and all employer and employee contributions shall be refunded. Individual months in which the employee worked eighty (80) or more hours during the fiscal year may be purchased as established in KRS 61.552.

Section 2. Each school board employee whose employment averages eighty (80) or more hours per month over their actual days worked or contract days as determined in Section 1 of this administrative regulation, shall be credited with total service credit for the school year determined as established in this section.

(1) If the employee worked at least 180 actual or contract days, the employee shall be credited with twelve (12) months of service credit.

(2) If the employee worked fewer than 180 actual or contract days, the employee shall receive the number of months of service credit determined by dividing the actual number of days worked or contract days by 180 and multiplying the resulting ratio by twelve (12) months. The number of months of service shall be rounded to the nearest whole month, except that the employee shall not receive twelve (12) months of service credit unless the employee worked 180 or more actual or contract days during the school year.

Section 3. For school years beginning July 1, 1996 through June 30, 2000, each school board employee whose employment averages eighty (80) or more hours per month over their actual days worked as determined in Section 1(1) of this administrative regulation, shall be credited with total service credit for the school year determined as established in this section.

(1) If the employee worked an average of at least eighty (80) hours per month over the number of actual days worked, as reported by the school board, the employee shall be credited with service based on the number of months and fractional months rounded to the next whole month.

(2)

(a) If the employee does not work an average of at least eighty (80) hours per month over the number of actual days worked, the employee's contract days, as reported by the school board, shall be divided by twenty (20) to determine the number of months and fractional months worked during the fiscal year;

(b) The employee's total wages shall be divided by the hourly rate reported by the school board to determine the total number of hours worked during the fiscal year;

(c) The employee's total number of hours worked shall be divided by the employee's months and fractional months worked to determine if the employee worked an average of at least eighty (80) hours per month; and

(d) Each school board employee who worked an average of at least eighty (80) hours per month over the number of contract days, shall be credited with service based on the number of months and fractional months rounded to the next whole month.

(3) If the employee does not work an average of at least eighty (80) hours per month over the number of actual days worked or contract days, the employee shall be allowed to retain credit for individual months representing at least eighty (80) hours of employment. Contributions and interest, if any, for months not representing eighty (80) hours of employment shall be refunded to the employee and employer.

Section 4. For school years prior to July 1, 1996, the retirement system shall determine each employee's fiscal year service credit as established in this section.

(1)

(a) The employee's total fiscal year wages shall be divided by the hourly rate, as reported by the school board, to determine the total number of hours worked during the fiscal year;

(b) The employee's total number of hours worked during the fiscal year shall be divided by the employee's number of actual months reported by the school board to determine if the employee worked an average of at least eighty (80) hours per month; and

(c) If the employee worked an average of at least eighty (80) hours per month over the number of actual months as reported by the school board, the employee shall be credited with service based on the number of actual months reported.

(2)

(a) If the employee does not work at least an average of eighty (80) hours per month over the number of months reported for each fiscal year, the employee's total calendar wages shall be divided by the hourly rate reported by the school board to determine the number of hours worked during the calendar year;

(b) The employee's total number of hours worked during the calendar year shall be divided by the number of calendar months reported by the school board to determine if the employee worked an average of at least eighty (80) hours per month; and

(c) If the employee worked an average of at least eighty (80) hours per month over the number of calendar months as reported by the school board, the employee shall be credited with service based on the number of calendar months reported.

(3)

(a) If the employee does not work at least an average of eighty (80) hours per month over the number of months reported for each fiscal or calendar year, the employee's contract days, as reported by the school board, shall be divided by twenty (20) to determine the number of months and fractional months worked during the fiscal year;

(b) The employee's total wages shall be divided by the hourly rate reported by the school board to determine the total number of hours worked during the fiscal year;

(c) The employee's total number of hours worked shall be divided by the employee's months and fractional months worked to determine if the employee worked an average of at least eighty (80) hours per month; and

(d) If the employee worked an average of at least eighty (80) hours per month over the number of contract days, as reported by the school board, the employee shall be credited with service based on the number of months and fractional months rounded to the next whole month.

(4)

(a) If the employee does not work at least an average of eighty (80) hours per month over the number of months reported for each fiscal or calendar year, or contract days, the employee's actual days worked, as reported by the school board, shall be divided by twenty (20) to determine the number of months and fractional months worked during the fiscal year;

(b) The employee's total wages shall be divided by the hourly rate reported by the school board to determine the total number of hours worked during the fiscal year;

(c) The employee's total number of hours worked shall be divided by the employee's months and fractional months worked to determine if the employee worked an average of at least eighty (80) hours per month; and

(d) If the employee worked an average of at least eighty (80) hours per month over the number of actual days worked, as reported by the school board, the employee shall be credited with service based on the number of months and fractional months rounded to the nearest whole month.

(5) If the employee does not work an average of at least eighty (80) hours per month over the number of reported months for each fiscal or calendar year, contract days, or actual days worked, the member is allowed to retain credit for individual months representing at least eighty (80) hours of employment. Contributions and interest, if any, for months not representing eighty (80) hours of employment shall be refunded to the employee and employer.

History

• RELATES TO: KRS 61.545, 61.552, 78.615
• STATUTORY AUTHORITY: KRS 61.545(1), 78.615(1)(c)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with the requirements of KRS 13A.105(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.545(1) requires the Kentucky Public Pensions Authority to determine by administrative regulation how much service in any year is the equivalent of a year of service credit. KRS 78.615 establishes the calculation for determination of retirement service credit for classified employees of local school boards. KRS 78.615(1)(c) allows classified employees of local school boards who work less than a complete school year to purchase service credit to complete the fiscal year according to administrative regulations promulgated by the Kentucky Public Pensions Authority. This administrative regulation establishes the formulas to be used to determine the number of months of service credit earned and for the purchase of service credit for local school board classified employees who work less than a complete school year.
• History: 105 KAR 001:300. 27 Ky.R. 1969; 2426; eff. 3-19-2001; 28 Ky.R. 916; 1353; eff. 12-19-2001; 29 Ky.R. 776; 1254; eff. 11-12-2002; TAm eff. 3-5-2019; Crt eff. 3-5-2019; 52 Ky.R. 1006; eff. 6-2-2026.

105 KAR 1:320 Proration of service credit {#sec-105-kar-1-320 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:320}

Section 1. If an employee is employed simultaneously in full-time positions in both the Kentucky Employees Retirement System and the County Employees Retirement System, service in a fiscal year shall be prorated between the systems based on the ratio of creditable compensation earned in each system to the total creditable compensation earned, except that at least one (1) month of service shall be earned in each system.

Section 2. If an employee is employed simultaneously in both hazardous and nonhazardous positions, either full time or part time, within the same retirement system, service in a fiscal year shall be prorated between the hazardous and nonhazardous positions based on the ratio of creditable compensation in each position to the total creditable compensation earned. The prorated creditable compensation shall be rounded to the nearest whole month.

Section 3. If only one (1) month contains both hazardous and nonhazardous employment or positions in both the Kentucky Employees Retirement System and the County Employees Retirement System, service shall be credited to the hazardous or nonhazardous position, or to the retirement system based on the position with the most creditable compensation. If creditable compensation is equal, the service shall be credited to the position in which the most days were worked.

History

• RELATES TO: KRS 61.545, 61.680
• STATUTORY AUTHORITY: KRS 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.545 provides for division of service credit based on the total compensation between systems and between hazardous and nonhazardous positions where the employee earns creditable compensation in more than one (1) position. KRS 61.680 provides for an employee to earn service credit, if the employee works in more than one (1) position with agencies participating in the same retirement system, including part-time positions. This administrative regulation establishes the formula for dividing the service between the positions.
• History: 105 KAR 001:320. 28 Ky.R. 1004; 1354; eff. 12-19-2001; Crt eff. 3-5-2019; Crt eff. 10-3-2025.

105 KAR 1:330 Purchase of service credit {#sec-105-kar-1-330 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:330}

Section 1. Cost Calculation Date for Determining the Cost of the Service Purchase.

(1) The cost calculation date for determining the cost of the service to be purchased shall be the later of the last day of the month:

(a) In which the request for the cost of the service is filed at the agency;

(b) The employee or person designates as the intended purchase date;

(c) In which documentation of the service is filed at the agency;

(d) In which the employee attains sufficient service credit to be eligible to make the purchase; or

(e) In which the employee terminates employment if the employee files a completed Form 4172, Notice of Intent to Transfer Lump Sum Payment(s) to Qualified Employer Sponsored Plan, at the agency indicating that the employee intends to defer the employee's lump sum payment for accrued compensatory and annual leave to be paid to the employee at termination to the Kentucky Public Employees Deferred Compensation Authority or other qualified employer sponsored plan. The employee shall then rollover the funds from the Kentucky Public Employees Deferred Compensation Authority or other qualified employer sponsored plan to the agency as payment, in whole or in part, for the employee's service purchase.

(2)

(a) The purchase deadline date shall be the later of the end of the day as defined by 105 KAR 1:001 on the cost calculation date or thirty (30) days from the date the purchase cost is provided to the employee.

(b) Upon discovery of a delay in providing the purchase cost to the employee or person, the agency may extend the purchase deadline date in paragraph (a).

(3) An employee or person shall not make a new request for cost calculation for purchase of service previously requested until the purchase deadline date has passed.

(4) Payment for purchase of service credit shall be filed at the agency while the employee is participating in an eligible retirement system and prior to the employee's termination date, except if the:

(a) Purchase of service credit is made pursuant to KRS 61.552(2)(a);

(b) Employee files a Form 4170, Direct Transfer/Rollover Authorization Form, at the agency while the employee is participating in an eligible retirement system and prior to the employee's termination date, and the financial institution completes the transfer or rollover within sixty (60) days of the payment due date, the payment for purchase of service credit by transfer or rollover may occur when the employee is no longer participating in an eligible retirement system and after the employee's termination date; or

(c) Agency discovers an error or omission in the service purchase cost, the:

1. Agency may provide corrected costs to the employee, person, member, or retired member; and

2. Employee, person, member, or retired member shall pay any additional amount due for the corrected costs to have the service purchase credited to his or her account.

(5) If the employee elects to purchase only a portion of the service for which he or she has requested a cost calculation, the employee shall be required to obtain a new cost calculation for the remaining service unless the remaining service is service pursuant to KRS 61.552(2) or (3).

Section 2. General Requirements to Purchase Service.

(1) The employee or person shall file at the agency all documentation necessary for the agency to determine that the service meets the eligibility requirements for purchase of service.

(2) The agency may require that any statement, letter, form, or other document required by this administrative regulation be notarized, made under oath as defined in KRS 523.010, or both.

(3) An employee or person shall not certify his or her own service on any of the statements, letters, forms, or other documents required by this administrative regulation.

(4)

(a) The agency shall determine how much service is eligible for purchase by statute and shall notify the employee or person in writing of the cost of the service that qualifies for purchase.

(b) If the agency determines that the service is not eligible for purchase, it shall notify the employee or person in writing of the reasons.

Section 3. Purchase of Omitted Service.

(1)

(a) To purchase omitted service pursuant to KRS 61.552(2) and 78.545, the employee or person shall file at the agency a valid Form 4225, Verification of Past Employment.

(b) If the employee or person is seeking to purchase omitted service based on employment with the Executive Branch, copies of personnel and wage records provided by the employer may be filed at the agency instead of Form 4225.

(c) The agency may determine eligibility to purchase omitted service based on records submitted pursuant to KRS 61.675, 78.625, or 105 KAR 1:130 without an application by the employee.

(2) If the agency determines that the employer records are not sufficient, the agency may require the employee or person to supplement the employer records with copies of check stubs, W-2 forms, personnel action forms, or payroll records in the employee's or person's possession.

(3) If the employee or person does not have additional documentation of the service, the employee or person may file at the agency office a report of detailed earnings from the Social Security Administration for the period of service, along with two (2) Form 4160s, Affidavit and Certification for Documentation of Service completed by persons who earned, or were eligible for, service for the same period in a state-administered retirement system with the same employer. Each affiant shall detail the employee's or person's employment status and length of service.

Section 4. Purchase of School Board Service. For service with a school board, the employee shall file at the agency a valid Form 4225, Verification of Past Employment.

Section 5. Vested Service Purchases.

(1) In order to purchase service credit pursuant to this section, a member shall be:

(a) Participating in one of the retirement systems administered by the Kentucky Public Pensions Authority; and

(b) Vested as defined by KRS 16.505(29), 61.510(22), or 78.510(30).

(2)

(a) To purchase service credit for active duty service in the Armed Forces of the United States pursuant to KRS 61.552(5)(d) and 78.545, the employee shall file at the agency a copy of the federal form DD-214 or other official military documents clearly indicating the:

1. Date of entry into active duty service;

2. Date of discharge from active duty service; and

3. Type of discharge.

(b) To purchase service credit for service in the National Guard or the military reserve forces pursuant to KRS 61.552(5)(e) and 78.545, including periods of active duty training, the employee shall file at the agency copies of official military documents clearly indicating the date of entry and current participation or date of discharge.

(c) The documents required by paragraphs (a) or (b) of this subsection shall be verified by a statement or letter signed by an authorized employee of the military.

(d) The agency shall verify with the employer the beginning and ending dates of the period of leave associated with active duty service in the Armed Forces of the United States, or service in the National Guard or the military reserve forces.

(3)

(a) To purchase service for a period when the employee was on educational, maternity, or sick leave without pay pursuant to KRS 61.552(5)(i) and 78.545, the employee shall file at the agency a statement or letter from the reporting official, personnel director, or agency head certifying the beginning and ending dates of and the type of leave designated by the employer.

(b) The agency shall verify with the employer the beginning and ending dates of educational, maternity, or sick leave without pay.

(4) To purchase state university service pursuant to KRS 61.552(5)(b) and 78.545, the employee shall file at the agency a valid Form 4120, Verification of Employment with a State University.

(5) To purchase federal service pursuant to KRS 61.552(5)(f) and 78.545, the employee shall file at the agency a valid Form 4115, Federal Verification.

(6)

(a) To purchase past seasonal, emergency, interim, probationary, temporary, or part-time employment that averages the required hours of work per month pursuant to KRS 61.552(5)(g) and 78.545, the employee shall file at the agency a valid Form 4225, Verification of Past Employment.

(b) If the employee is seeking to purchase service based on past seasonal, emergency, interim, probationary, temporary, or part-time employment with the Executive Branch, documentation to be filed at the agency shall include:

1. Copies of personnel and wage records provided by the employer;

2. A Form 4225; or

3. Other documentation the agency deems necessary to confirm the employment that the service purchase is being based on.

(7) To purchase service with a non-participating agency whose service is authorized pursuant to KRS 61.552(5)(j) and 78.545, the employee shall file at the agency:

(a) The beginning and ending dates of the service and any breaks that may have occurred during the service, listed by fiscal year;

(b) The number of calendar months worked;

(c) The position title and status, including full-time, part-time, probationary, emergency, seasonal, temporary, or interim;

(d) If the employee participated in a retirement plan, and if so, if the:

1. Plan was a defined contribution or defined benefit plan;

2. Employee has taken a refund of contributions to the plan; and

(e) Any other documentation the agency deems necessary to determine eligibility.

(8) To purchase urban-county government service pursuant to KRS 61.552(5)(k) and 78.545, the employee shall file at the agency a valid Form 4131, Verification of Urban-County Government Service.

(9) Out-of-State Service Credit.

(a) To purchase service credit for any out-of-state public service pursuant to KRS 61.552(5)(c) and 78.545, the employee shall file at the agency a valid Form 4140, Verification of Out-of-State Service.

(b) To purchase nonhazardous out-of-state service credit pursuant to KRS 61.552(5)(c), a member shall:

1. Have been employed in a regular, full-time position;

2. Have earned the out-of-state service credit in a state or local defined benefit plan other than a plan for teachers; and

3. Provide documentation or other evidence that they are not eligible for a retirement benefit from the out-of-state plan for the same period of service.

(c) To purchase out-of-state service credit for a hazardous duty position, the employee shall:

1. File at the agency a Form 4140 and a copy of the description of the duties of the out-of-state position from his or her former out-of-state employer;

2. Meet the eligibility requirements established in subsection (9)(b) of this section;

3. Be vested in any system in which the member has a hazardous service account based solely upon service in that system; and

4. Have been employed in an out-of-state position that is the same as or substantially similar to positions for which hazardous duty credit has been approved pursuant to, and meets the definition of a hazardous position as established in, KRS 61.592 or 78.5522.

(d) Nonhazardous service may not be used to meet the vesting requirement for a hazardous service credit purchase.

Section 6. Service Purchase Calculations Based on Actuarial Cost.

(1) Except for employees of a school board paid under an employment contract, for a purchase based on the actuarial cost, in accordance with KRS 61.552(10)(a) and 78.545, the higher of the current rate of pay, final rate of pay, or final compensation times the actuarial age factor shall be:

(a) Current rate of pay shall be:

1. For an hourly employee paid on a seven and one-half (7 1/2) hour day, the hourly rate times 1,950;

2. For an hourly employee paid on an eight (8) hour day, the hourly rate times 2,080;

3. For an employee paid by the day, the daily rate times 260;

4. For an employee paid by the week, the weekly rate times fifty-two (52);

5. For an employee paid by the month, the monthly rate times twelve (12);

6. For a part-time employee who averages 100 or more hours per month, the hourly rate times hours per day times 260. If the number of hours worked per day is not fixed by the employer, seven and one-half (7 1/2) hours shall be used;

7. For an employee who receives a fixed amount in addition to an hourly, daily, weekly, monthly, or annual rate, the current rate shall include all fixed amounts, averaged into the same period;

8. For an employee simultaneously employed in more than one (1) of the systems, the higher of the combined current rate of pay, combined final rate of pay, or combined final compensation shall be used as of the cost calculation date.

(b) Final compensation shall be determined as of the cost calculation date, except that if the agency provides or corrects a cost calculation for a retired member, final compensation shall be based on the definition of final compensation as established in 105 KAR 1:001 in effect on the member's retirement date. To determine final compensation in effect for the cost calculation or correction for a retired member, the agency shall use the employee's actual service, including:

1. All service that the employee purchased pursuant to KRS 61.552(2), 61.552(3), and 78.545; and

2. The employee's age at retirement.

(c) The benefit factor used to determine the actuarial cost, in accordance with KRS 61.552(10)(a) and 78.545, shall be the benefit factor to which the employee is entitled on the first day of the month following the cost calculation date, except that the benefit factor for nonhazardous employees of the County Employees Retirement System and the Kentucky Employees Retirement System with an effective retirement date within the window established in KRS 61.510(14)(b) and 78.510(14)(b) shall be the highest benefit factor to which the employee would be entitled, assuming total service as determined in paragraph (b) of this subsection.

(2) For employees of a school board paid under an employment contract, for a purchase based on the actuarial cost, in accordance with KRS 61.552(10)(a) and 78.545, the higher of the current rate of pay, final rate of pay, or final compensation times the actuarial age factor shall be:

(a) The current rate of pay shall be equal to the final compensation as of the cost calculation date.

(b) Final compensation shall be determined as of the cost calculation date, except that the final compensation of nonhazardous members of the County Employees Retirement System or Kentucky Employees Retirement System with an effective retirement date within the window established in KRS 61.510(14)(b) and 78.510(14)(b) shall be based on the three (3) fiscal years with the highest average monthly earnings if the sum of the employee's service when added to his or her age would equal at least seventy-five (75), assuming the employee's service includes all service:

1. Remaining on an active installment purchase agreement;

2. Which the employee is eligible to purchase under KRS 61.552(2), 61.552(3), and 78.545; and

3. The employee would accrue if employment continued through December 31, 2008.

(c) The employee's age rounded to the nearest year as of the cost calculation date shall be used.

(d) The benefit factor used to determine the actuarial cost, in accordance with KRS 61.552(10)(a) and 78.545, shall be the benefit factor to which the employee is entitled on the first day of the month following the cost calculation date, except that the benefit factor for nonhazardous employees of the County Employees Retirement System and the Kentucky Employees Retirement System with an effective retirement date within the window established in KRS 61.510(14)(b) and 78.510(14)(b) shall be the highest benefit factor to which the employee would be entitled, assuming total service as determined in paragraph (b) of this subsection.

Section 7. Correction Upon Discovery of Error or Omission in Service Purchase Costs.

(1) After the employee, member, or retired member has purchased service, the agency may recalculate the cost of the service if, upon audit, the agency determines that any of the information utilized to calculate the cost of the service was incorrect.

(2) If the recalculation results in an increase in the cost of $100 or more, the employee or person, member, or retired member shall have thirty (30) days to pay the additional amount.

(3) If the employee, member, retired member, or the employer, fails to pay the additional amount, the employee's, member's, or retired member's service shall be reduced to the next lower increment or number of months for which the employee, member, or retired member is eligible based on the original payment, and the difference shall be refunded to the employee, member, or retired member.

Section 8. Special Considerations for Purchase of Refunded or Past Service.

(1) The verified wages associated with service purchased under the provisions of KRS 61.552 and 78.545 that would have qualified as creditable compensation shall be added to the employee's account and shall be used in determining the employee's final compensation.

(2) An employee purchasing service pursuant to subsection (1) of this section by increments or by installment purchase agreement shall have the service credited in chronological order beginning with the earliest service.

Section 9. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 4172, "Notice of Intent to Transfer Lump Sum Payment(s) to Qualified Employer Sponsored Plan," April 2021;

(b) Form 4170, "Direct Transfer/Rollover Authorization Form" 1/2026;

(c) Form 4225, "Verification of Past Employment," 1/2026;

(d) Form 4160, "Affidavit and Certification for Documentation of Service," 1/2026;

(e) Form 4120, "Verification of Employment with a State University," April 2021;

(f) Form 4115, "Federal Verification," 1/2026;

(g) Form 4131, "Verification of Urban-County Government Service," April 2021; and

(h) Form 4140, "Verification of Out-of-State Service," April 2021.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. or on the agency's website at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 16.545,16.645, 61.505, 61.510, 61.543, 61.552, 61.592, 61.645, 61.685, 78.510, 78.545, 78.5520, 78.610, 26 U.S.C. 415
• STATUTORY AUTHORITY: KRS 61.545(9)(e), 61.505(1)(f)-(g)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(f)-(g) and 61.645(9)(e) authorize the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with and necessary or proper to carry out the provisions of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852. KRS 16.545, 16.645, 61.543, 61.552, 61.592, 78.5520, 61.685, 78.545, and 78.610 provide for purchasing service credit and out-of-state service credit for Kentucky Employees Retirement Systems members. KRS 16.645(19) and 78.545(7) provide that purchase of service credit for members of the State Police Retirement System and County Employees Retirement System, respectively, shall be administered in the same manner subject to the same limitations and requirements as provided for the Kentucky Employees Retirement System. 26 U.S.C. 415 establishes federal requirements regarding purchases of service credit. This administrative regulation establishes the requirements and forms for eligibility and purchase of service credit, and the filing deadlines on which the cost calculation shall be made.
• History: 105 KAR 001:330. 28 Ky.R. 1005; Am. 1354; eff. 12-19-2001; 29 Ky.R. 780; 1256; eff. 11-12-2002.; 31 Ky.R. 395; eff. 11-5-2004; 33 Ky.R. 1878; 2932; eff. 4-6-207; 35 Ky.R. 124; eff. 10-3-2008; Crt eff. 1-29-2020; 48 Ky.R. 873, 2393; eff. 5-31-2022; 52 Ky.R. 1380, 1798; eff. 8-4-2026.

105 KAR 1:365 Hybrid cash balance plan {#sec-105-kar-1-365 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:365}

Section 1. Definitions.

(1) "Nonvested member" means a member of the Systems who has less than five (5) years of service credited under KRS 16.543, 61.543, and 78.615 and who participates in the hybrid cash balance plan tier based on:

(a) A participation date on or after January 1, 2014, or

(b) Opting into the hybrid cash balance plan with a participation date between September 1, 2008 and December 31, 2013.

(2) "Vested member" means a member of the Systems who has five (5) or more years of service credited under KRS 16.543, 61.543, and 78.615 and who participates in the hybrid cash balance plan tier based on:

(a) A participation date on or after January 1, 2014, or

(b) Opting into the hybrid cash balance plan with a participation date between September 1, 2008 and December 31, 2013.

Section 2. Military Service Credit.

(1)

(a) Decompression service shall mean service purchased by a member for a period of time not to exceed ninety (90) days between the member's discharge from active-duty military service and the member's return to employment with a participating employer, if the member returned from military leave and did not immediately return to work, in accordance with the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. 4301-4333.

(b) Decompression shall be credited to the member's account after the member has paid the employee contributions that would have been paid by the member for this period of time in accordance with KRS 16.543, 61.543, and 78.615.

(c) The employer shall pay the employer contributions for the period of decompression in accordance with KRS 61.565 and 78.635.

(2)

(a) Military omitted service shall mean service purchased by a member with a participation date on or after January 1, 2014, who was called to active-duty military in accordance with KRS 61.552(1) and 78.545.

(b) Military omitted shall be credited to the member's account only if the member has paid the employee contributions that would have been paid by the member for this period of time in accordance with KRS 16.543, 61.543, and 78.615.

(c) The employer shall pay the employer contributions for the period of military omitted in accordance with KRS 61.565 and 78.635.

Section 3. Application.

(1) Systems. This administrative regulation shall apply to the hybrid cash balance plan tier within each of the Systems.

(2) Members. Except as provided in subsections (3) and (4) of this section, this administrative regulation shall apply solely to members who begin participating in the Systems on or after January 1, 2014, and who do not have a participation date in any other state-administered retirement system that is prior to January 1, 2014.

(3) Irrevocable Election. This subsection shall apply only to members with a participation date in the Systems between September 1, 2008 and December 31, 2013, who have not received a retirement benefit from the Systems.

(a) Pursuant to KRS 61.5955 and 78.545, a member with a participation date in the Systems between September 1, 2008 and December 31, 2013, may make a one-time, irrevocable election to receive the benefits and rights provided under the hybrid cash balance plan tier as defined in KRS 16.583, 61.597, 78.5512, and 78.5516 in lieu of benefits he or she is currently eligible to receive from the Systems.

1. A member with a participation date based on service in the Systems or service in another state-administered retirement system prior to September 1, 2008 shall not be eligible to make this one-time, irrevocable election upon separation of accounts in accordance with KRS 61.680, 78.5542, and 105 KAR 1:020.

2. A member with a participation date in the Systems between September 1, 2008 and December 31, 2013 who also has service in another state-administered retirement system between September 1, 2008 and December 31, 2013 shall be eligible to make this one-time, irrevocable election only upon separation of the member's account in the Systems from the member's account in the other state-administered retirement system as established in Section 6(6) of this administrative regulation and in accordance with KRS 61.680, 78.5542, and 105 KAR 1:020.

(b)

1. Eligible members who make the one-time, irrevocable election as described in paragraph (a) of this subsection shall only be entitled to retain purchased service that is recontribution of a refund, omitted, omitted with interest, decompression, or service purchased in accordance with the Uniformed Services Employment and Reemployment Rights Act (USERRA); the agency shall remove any other purchased service from total months of service credit and refund the cost of that service back, plus interest, to the source of the purchase.

2. Eligible members who make the one-time, irrevocable election as described in paragraph (a) of this subsection shall not retain any active duty military service pursuant to KRS 61.552(1) and 78.545, unless the eligible member is currently participating in one (1) of the systems and pays the military omitted.

(c) Members eligible to make the one-time, irrevocable election as described in paragraph (a) of this subsection shall be provided information detailing the potential results of that election via Member Self Service on the Web site maintained by the agency, which shall reflect service credit purchases retained and refunded as described in paragraph (b) of this subsection, and may receive additional information from the agency's counselors upon request.

(d) The agency shall provide Form 2013, Hybrid Cash Balance Plan Opt-In Election, on which the member can make a one-time, irrevocable election as described in paragraph (a) of this subsection, available to the member via Member Self Service on the Web site maintained by the agency.

(e) The agency shall not process an eligible member's one-time, irrevocable election as described in paragraph (a) of this subsection until a complete and correct Form 2013, Hybrid Cash Balance Plan Opt-In Election, is on file at the retirement office.

(f) The effective date of the eligible member's one-time, irrevocable election as described in paragraph (a) of this subsection shall be the date on which the completed Form 2013, Hybrid Cash Balance Plan Opt-In Election, is received at the retirement office.

(4) Prior Participation that has been refunded. This subsection shall apply to a member with a participation date with the Systems prior to January 1, 2014, who terminates employment, and who takes a refund of accumulated contributions pursuant to KRS 61.625 and 78.545.

(a) If that person is reemployed on or after January 1, 2014, in a regular full-time position required to participate in one of the Systems and does not have a participation date with any other state-administered retirement plan prior to January 1, 2014, the person shall become a member of the hybrid cash balance plan tier.

(b) If that member purchases his or her previously refunded service in accordance with KRS 61.552(3) and 78.545(7), the purchased service shall only be used to determine the member's years of service credited and shall not be used to determine the member's participation date.

Section 4. Construction of Administrative Regulation. KRS 16.505 to 16.652, KRS 61.510 to 61.705, KRS 78.510 to 78.852, and KAR Title 105 shall apply to the hybrid cash balance plan tier except if required by or as necessary for the administration of the hybrid cash balance plan tier under KRS 16.583, 61.597, 78.5512, and 78.5516.

Section 5. Trust Assets. All contributions made with respect to each Systems' hybrid cash balance plan tier shall be held in the trust for the respective System. Assets for the hybrid cash balance plan tier shall not be segregated from the assets for other tiers for the respective System.

Section 6. Reciprocity.

(1) All service credit with other state-administered retirement systems, including the Judicial and Legislators' Plan and the Teachers' Retirement System, shall be used for determining a member's years of service credited for purposes of eligibility for annuitization, unless:

(a) The member has separated the member's account with another state-administered retirement systems by filing a complete Form 2022, Separation of Accounts; or

(b) The member previously retired based on the service with the other state-administered retirement system.

(2) Service credit in another state-administered retirement system shall not be used for determining whether a member who is not eligible to retire in the hybrid cash balance plan tier has the five (5) years of service required in order to receive a full refund of his or her accumulated account balance under KRS 16.583(5)(b), 61.597(5)(b), 78.5512(5)(b), and 78.5516(5)(b).

(3) Service credit in the cash balance plan tier shall be counted as service for the other state-administered retirement systems and as service for hospital and medical insurance and managed care plan coverage pursuant to KRS 61.702 and 78.5536.

(4) The same service credit shall not be counted for benefit calculation purposes for more than one state-administered retirement system or tier under any circumstances.

(5) A member who is participating in the hybrid cash balance tier in more than one of the Systems shall have to retire at the same time and elect the same retirement benefit option in all applicable Systems, unless the member has requested that his or her accounts be separated in accordance with 105 KAR 1:020.

(6) A member with a participation date in the Systems between September 1, 2008 and December 31, 2013 may make a one-time, irrevocable election to have each system treat his or her service credit in that system without regard to any other service credit, by filing a Form 2022, Separation of Accounts, requesting that his or her accounts be separated in accordance with KRS 61.680 and 78.5542. If so requested, "final compensation" shall be based on the creditable compensation earned under each system separately.

(a) Members who are eligible and seeking to make the one-time, irrevocable election to separate accounts shall be provided information detailing the potential results of that election from the agency's counselors.

(b) The agency shall provide Form 2022, Separation of Accounts, on which the member can make the one-time, irrevocable election to separate accounts.

(c) The agency shall not process an eligible member's one-time, irrevocable election to separate accounts until the member has received the information required by paragraph (a) of this subsection and a complete and correct Form 2022, Separation of Accounts, is on file at the retirement office.

(d) The effective date of the eligible member's one-time, irrevocable election to separate accounts shall be the date on which the completed Form 2022, Separation of Accounts, is received at the retirement office.

Section 7. Lump-sum Distributions upon Termination of Employment or Death for Nonvested Members.

(1) Termination of Employment. A nonvested member eligible for a refund pursuant to KRS 61.625 and 78.545 shall only be refunded his or her accumulated contributions, and shall forfeit any accumulated employer credit.

(2) Death before Retirement. Upon the death of a nonvested member, the beneficiary designated by the member pursuant to KRS 61.542(1)-(2) and 78.545(2) (or if no designated beneficiary, the member's estate) shall only be entitled to receive a lump-sum payment of the nonvested member's accumulated contributions, and shall not be entitled to receive payment of any accumulated employer credits.

(3) Rollovers. A nonvested member or the designated beneficiary of a nonvested member who receives a refund of accumulated contributions may elect to have the refunded accumulated contributions paid directly to an eligible retirement plan in accordance with 105 KAR 002:270 and 105 KAR 002:345.

Section 8. Lump-sum Distributions upon Termination or Distributions upon Death of Vested Members.

(1) Termination of Employment.

(a) Upon termination of employment with all employers participating in the same Systems in which the member has service credit, a vested member who is not otherwise eligible to retire may elect to take a refund of his or her accumulated account balance.

(b)

1. Upon termination of employment with all employers participating in one or more of the Systems, a vested member who is eligible for retirement may elect to take a refund of his or her accumulated account balance, in lieu of other retirement payment options provided in KRS 16.583(7), 61.597(7), 78.5512(7), and 78.5516(7).

2. The member's election to take a refund of his or her accumulated account balance as described in subparagraph 1 of this paragraph shall be treated as a retirement and the member shall be a retired member ineligible to participate or accrue additional benefits in the Systems upon subsequent reemployment with any participating employer pursuant to KRS 61.637 and 78.5540. Additionally, the member who has made the election described in subparagraph 1 of this paragraph shall be subject to all requirements and restrictions for reemploying with a participating employer in KRS 61.637, 78.5540 and 105 KAR 5:390.

(2) Death before Retirement.

(a) Upon the death of a vested member participating in the Systems, the vested member's designated beneficiary (or if no designated beneficiary, the member's estate) shall be entitled to a lump-sum distribution of the vested member's accumulated account balance in accordance with KRS 61.625(1)(a) and 78.545(5). The designated beneficiary may also be entitled to the other payment options available for a death before retirement pursuant to KRS 16.578, 61.640, and 78.5532.

(b) Upon the death of a vested member who is not participating in the Systems at the time of death and who has not taken a refund or retirement benefit, if the vested member has fewer than twelve (12) years of service credited, the vested member's designated beneficiary (or if no designated beneficiary the member's estate) shall be entitled to a lump-sum distribution of the member's accumulated account balance in accordance with KRS 61.625(1)(a) and 78.545(5). If the vested member has twelve (12) or more years of service credited, the designated beneficiary may also be entitled to other payment options available for a death before retirement pursuant to KRS 16.578, 61.640, and 78.5532.

(3) Rollover. A vested member or the designated beneficiary of a vested member who takes a lump-sum distribution of the vested member's accumulated account balance under this section may elect to have the lump-sum distribution paid directly to an eligible retirement plan in accordance with 105 KAR 002:270 and 105 KAR 002:345.

Section 9. Eligibility for an Annuity.

(1) At Normal Retirement Age. Subject to Section 6 of this administrative regulation, a vested member who reaches normal retirement age under the applicable System's statutory provisions and who terminates employment with all participating employers shall be eligible to retire and may elect to annuitize his or her accumulated account balance or take a lump-sum distribution of his or her accumulated account balance as provided in Section 8(1)(b) of this administrative regulation.

(2) Additional Eligibility for Annuitization for Members with Hazardous position Service. A member who has hazardous position service as provided in KRS 16.505-16.652, 61.592 and 78.5520, who has 25 or more years of service credited under KRS 16.543(1), 61.543(1), or 78.615(1) or any other Kentucky state-administered system, and who terminates employment with all employers participating in the Systems shall be eligible to retire and may elect to annuitize his or her accumulated account balance or take a lump-sum distribution of his or her accumulated account balance as provided in Section 8(1)(b) of this administrative regulation.

(3) Additional Eligibility for Annuitization for Members with Service Only in a Nonhazardous Position. A member with exclusively nonhazardous position service who is at least age fifty-seven (57), who has an age plus years of service total of at least eighty-seven (87) years, and who terminates employment with all employers participating in the Systems shall be eligible to retire and may elect to annuitize his or her accumulated account balance or take a lump-sum distribution of his or her accumulated account balance as provided in Section 8(1)(b) of this administrative regulation.

(4) Annuitization. A member who elects to annuitize his or her accumulated account balance may receive a retirement benefit determined in accordance with actuarial assumptions and actuarial methods adopted under subsection (6) of this section and in effect on the member's retirement date.

(5) Return of Contributions. If the retirement benefit payment option selected by the vested member includes a guaranteed return of contributions, that retirement benefit payment option shall be interpreted to mean that guarantee applies to the accumulated account balance.

(6) Board Action with respect to Annuitization. The Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System shall adopt actuarial assumptions and methods that will apply to a specific fiscal year prior to the start of that fiscal year.

(7) Eligibility for Retiree Hospital and Medical Benefit. Only a member who is receiving a monthly annuitized benefit shall be eligible for hospital and medical insurance and managed care plan coverage. A member who takes a lump-sum refund or lump-sum retirement benefit shall not be eligible for hospital and medical insurance and managed care plan coverage.

Section 10. Disability retirement. A member participating in the hybrid cash balance plan tier in one or more of the Systems whose disability retirement allowance is discontinued pursuant to KRS 61.615 and 78.5528 shall begin receiving retirement benefits, if eligible, under KRS 16.583(6), 61.597(6), 78.5512(6), or 78.5516(6), but shall not be eligible for early retirement benefits under KRS 61.559, 78.5510, 78.5514, or 16.577.

Section 11. Purchase of Service Credit.

(1) Members participating in the hybrid cash balance plan tier shall only be eligible to purchase service credit that is recontribution of a refund, omitted, omitted with interest, military omitted, decompression, or under the Uniformed Services Employment and Reemployment Rights Act (USERRA), and shall not be eligible to make any other types of service purchases.

(2) Uniformed Services Employment and Reemployment Rights Act (USERRA) Service.

(a) Years of service credited shall be determined as required by USERRA.

(b) In order to receive service credit for military omitted, decompression, or under the Uniformed Services Employment and Reemployment Rights Act (USERRA), the member shall pay the member contributions in accordance with KRS 16.543, 61.543, and 78.615, as though the member was employed during the period of his or her active military duty or decompression.

(c) The employer shall pay all employer contributions owed in accordance with KRS 61.552, 61.565, 78.545, and 78.635.

(3) Repayment of Refunded Contributions Plus Interest Credits or Accumulated Account Balance.

(a) Upon reemployment with a participating employer in a regular full-time position required to participate in the Systems or participation in another state-administered retirement system, a nonvested member who took a refund of his or her member contributions plus interest credits may regain the refunded service credit by repaying, with interest at a rate determined by the board of the respective retirement system, the amount refunded with post-tax employee contributions or a rollover or transfer allowed under the Internal Revenue Code. Although the repayments of refunded contributions plus interest credit shall be used to determine the member's service credited, the repayment of the amount refunded shall not be used to determine a member's participation date.

(b) Upon reemployment with a participating employer in a regular full-time position required to participate in the Systems or participation in another state-administered retirement system, a vested member who was not eligible to retire and who took a refund of his or her accumulated account balance may regain the refunded service credit by repaying, with interest at a rate determined by the board of the respective retirement system, the amount refunded with post-tax employee contributions or a rollover or transfer allowed under the Internal Revenue Code. Although the repayments of the refunded accumulated account balance shall be used to determine the member's service credited, the repayment of the amount refunded shall not be used to determine a member's participation date.

(4) Omitted Service. Any person who is entitled to service credit in the hybrid cash balance plan tier that was not reported in accordance with KRS 16.543, 61.543, or 78.615 may pay the amount of member contributions that would have been due on that service in order to receive credit for the service in the hybrid cash balance plan tier. However, the service shall not be credited to the member's account until employer contributions for the service are received by the Systems. Once member and employer contributions have been received, accumulated employer credits shall be reflected in the member's account.

Section 12. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 2013, "Hybrid Cash Balance Plan Opt-In Election", February 2021; and

(b) Form 2022, "Separation of Accounts", September 2022.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the Kentucky Public Pensions Authority's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 16.543, 16.577, 16.578, 16.583, 61.505, 61.510, 61.542, 61.543, 61.552, 61.559, 61.565, 61.592, 61.5955, 61.597, 61.615, 61.625, 61.637, 61.640, 61.680, 61.702, 78.510, 78.545, 78.5510, 78.5512, 78.5514, 78.5516, 78.5520, 78.5528, 78.5532, 78.5536, 78.5540, 78.5542, 78.615, 78.635, 38 U.S.C. 4301-4335, 26 U.S.C. 414(u)
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority on behalf of the Kentucky Retirement Systems and the County Employees Retirement System to promulgate administrative regulations that are consistent with the provisions of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852. KRS 16.583, 61.597, 78.5512, and 78.5516 create a hybrid cash balance plan tier for members of the State Police Retirement System, Kentucky Employees Retirement System, and County Employees Retirement System with participation dates on or after January 1, 2014, or members making an election pursuant to KRS 61.5955 and 78.545. This administrative regulation establishes the procedures and requirements for the administration of the hybrid cash balance plan tier.
• History: 105 KAR 001:365.49 Ky.R. 1537, 1900; eff. 7-5-2023; TAm eff. 9-10-2026.

105 KAR 1:440 Kentucky Retirement Systems Trustee Education Program {#sec-105-kar-1-440 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:440}

Section 1. Each trustee shall comply with the Kentucky Retirement Systems Trustee Education Program.

Section 2. Incorporation by Reference.

(1) The "Kentucky Retirement Systems Trustee Education Program", adopted August 18, 2011, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road, Frankfort, Kentucky, Monday through Friday, 8 a.m. to 4:30 p.m.

History

• RELATES TO: KRS 61.645(18)
• STATUTORY AUTHORITY: KRS 61.645(9)(e), 61.645(18)(c)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Board of Trustees of Kentucky Retirement Systems to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. KRS 61.645(18) requires the board to shall establish a formal trustee education program for all trustees of the board, which shall be incorporated by reference in an administrative regulation. This administrative regulation establishes the Kentucky Retirement Systems Trustee Education Program.
• History: 35 Ky.R. 1953; 2212; eff. 5-1-2009; 38 Ky.R. 813; 1116; eff. 1-6-2012; TAm eff. 6-11-2019; Crt eff. 6-11-2019; Crt eff. 6-11-2026

105 KAR 1:445 Trustee elections {#sec-105-kar-1-445 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:445}

Section 1. Definitions.

(1) "Ballot" means an electronic or paper document that meets the requirements of KRS 61.645(4)(c) and 78.782(4)(c), and for each candidate includes:

(a) A recent photograph;

(b) City and county of residence;

(c) Employer and position title, or the employer from which the candidate last worked or retired, and the position title of the last position held;

(d) Education, including schools and universities attended and degrees earned;

(e) Any professional licenses or certifications;

(f) Any organization of which the candidate is a member that is listed on the candidate's application; and

(g) The website address where each candidate's materials are available for viewing.

(2) "Board" means the Board of Trustees of the Kentucky Retirement Systems or the Board of Trustees of the County Employees Retirement System.

(3) "Candidate" means a participant of the system for which the election is being held who is nominated by:

(a) The relevant board; or

(b) Petition of the members of the relevant system.

(4) "Election year" means the year of the:

(a) Expiration of a trustee's term of office; and

(b) Trustee election.

(5) "Eligible voter" means any person who:

(a) Is a participant of the system for which the vote is being taken on or before December 31 of the year preceding the election year; and

(b) Has on file:

1. A valid email address; or

2. If a paper ballot is requested pursuant to KRS 61.645(4)(j), a valid physical mailing address.

(6) "Plurality of votes" means a majority of valid votes cast in an election.

(7) "Resume" means a document that at a minimum includes the participant's:

(a) First and last name;

(b) Address;

(c) Phone number;

(d) E-mail address;

(e) Educational background; and

(f) Professional employment history that includes dates of employment, job title, employer name and address, and type of business.

(8) "Term of Office" means the period of membership on the relevant Board, which begins on April 1 of the year elected or appointed and ends on March 31 four (4) years thereafter.

(9) "Valid email address" means an email address the agency has on file for a participant that is operational and able to receive messages, or has not otherwise been deemed an invalid email address by the agency.

(10) "Valid physical mailing address" means the mailing address on file at which a participant is able to receive U.S. mail, including a:

(a) Current street address;

(b) Post Office box registered with the United States Postal Service; or

(c) Private mailbox registered with a commercial mail receiving agency established pursuant to the United States Postal Service regulation.

(11) "Valid vote" means a timely cast vote by an eligible voter that clearly designates the voter's choice of an eligible candidate or candidates.

(12) "Write-in" means casting a valid vote for an eligible candidate not listed on the ballot as a candidate by:

(a) Inserting his or her name in the designated place when casting the vote by mail or electronically; or

(b) Providing his or her name when casting the vote by telephone.

(13) "Write-in candidate" means a person who is not listed on the ballot as a candidate and has been inserted or provided as a write-in.

Section 2. Use of Third-party Vendors. Subject to KRS 61.505(3)(d), the agency may contract with third-party vendors to provide services for the trustee election process as provided by KRS 61.645(4) and 78.782(4).

Section 3. Election and ballot requirements.

(1) At the expiration of an elected trustee's term of office, an election shall occur for the:

(a) Kentucky Retirement Systems Board of Trustees pursuant to KRS 61.645; and

(b) County Employees Retirement System Board of Trustees pursuant to KRS 78.782.

(2) Ballots shall include:

(a) Candidates nominated by the Board in accordance with Section 4 of this administrative regulation;

(b) Candidates nominated by Petition in accordance with Section 5 of this administrative regulation; or

(c) A write-in option.

(3)

(a) On or before June 30 of the year immediately preceding an election year, the agency shall provide notice to current participants detailing the steps he or she shall take to become a potential candidate.

(b) A participant shall only be a potential candidate if he or she:

1. Is a member or retired member of the system in which he or she is seeking placement on the ballot;

2. Is a member or a retired member of County Employees Retirement System if he or she is seeking placement on the ballot for the County Employees Retirement System, and the agency verifies the majority of his or her service was earned in that system in a:

a. Nonhazardous position if he or she is seeking placement on the ballot for a trustee position under KRS 78.782(1)(a)(1); or

b. Hazardous position if he or she is seeking placement on the ballot for a trustee position under KRS 78.782(1)(a)(2);

3. Is not statutorily prohibited by virtue of term limits as established in KRS 61.645(3) and 78.782(3);

4. Completes the requirements of paragraph (c) of this subsection;

5. Passes the background check in accordance with subsection (4)(b) of this section;

6. Is determined constitutionally compatible in accordance with subsection (4)(c) of this section;

7. Is not a current or former employee of the agency, Kentucky Retirement Systems, or County Employees Retirement System, or is not otherwise prohibited from being placed on the ballot, pursuant to KRS 61.545(6)(c) or 78.782(6)(c); and

8. Is not in violation of any provision of KRS 11A.020 or 11A.040 by a court of competent jurisdiction or any other statute.

(c) Each participant seeking to be a potential candidate shall file in accordance with paragraph (a) of this subsection:

1. A valid Application for Trustee;

2. A resume with cover letter;

3. A recent color photograph; and

4. An authorization for the agency to complete a background check.

(4)

(a) The agency shall review the filed documentation to ensure a potential candidate meets the requirements established in subsection (3)(b) of this section, and completed the requirements established in subsection (3)(c) of this section and KRS 61.645 and 78.782.

(b) A background check shall be completed for each potential candidate.

(c) If currently employed, the Kentucky Attorney General's Office shall review the potential candidate's employment to determine if it is constitutionally compatible with the trustee position in accordance with KRS 61.080, 61.645, 78.782, and the Kentucky Constitution Section 165. If the Kentucky Attorney General's Office indicates that the potential candidate's employment is not constitutionally compatible with the trustee position, the potential candidate shall be:

1. Excluded from placement on the ballot; or

2. Included for possible placement on the ballot if he or she provides a written statement confirming his or her agreement to resign from his or her current position if elected.

Section 4. Nomination by the Board.

(1) The agency shall provide the respective Board of each system with a list of potential candidates who meet the requirements of Section 3(3) and (4) of this administrative regulation, and each of his or her completed corresponding Applications for Trustee.

(2) The name of each candidate nominated by the respective Board within six (6) months prior to the end of a term of office shall be placed on the ballot.

Section 5. Petitions.

(1) To be included on the ballot by petition, the potential candidate shall file a valid petition no later than October 31 of the year preceding the election year.

(2) A valid petition is a petition that meets the requirements of:

(a) Section 3(3) and (4) of this administrative regulation; and

(b) KRS 61.645(4)(b) or 78.782(4)(b).

(3) Each petition shall be reviewed by the agency to verify that each signature belongs to a participant of the respective system.

(4) The name of each candidate who meets the requirements of this section shall be placed on the ballot.

Section 6. Default to electronic ballots.

(1) The agency shall notify each eligible voter that an electronic ballot shall be provided unless he or she requests a modification to the ballot type received in accordance with subsection (2) of this section.

(2)

(a) A request to modify the ballot type shall be received on or before November 30 of the year preceding the election year in order to be effective for the upcoming election. Modifications of the ballot type include changing from:

1. An electronic ballot to a paper ballot; and

2. A paper ballot to an electronic ballot.

(b) An eligible voter shall request a change in the type of ballot:

1. Through the Self-Service Web site;

2. Via phone by calling the agency and providing his or her agency-issued personal identification number (PIN); or

3. By filing a signed written request.

(3) Once an eligible voter modifies the ballot type he or she receives, the eligible voter shall receive the specified ballot type until he or she requests a change in the ballot type in accordance with subsection (2) of this section.

Section 7. Ballot Preparation and Delivery.

(1) The agency or its third-party vendor shall prepare the official ballot within four (4) months of the nominations of the respective Board. The ballot shall:

(a) Provide a unique voter identification number;

(b) Provide details on how to vote;

(c) Contain instructions defining what constitutes a valid vote; and

(d) Indicate that any invalid vote shall not be counted.

(2) Ballots shall be provided to eligible voters on or before January 28 of the election year.

(a) The agency or its third-party vendor shall email electronic ballots to the email address on file unless the eligible voter:

1. Has requested a paper ballot, which shall be sent to his or her last valid physical mailing address on file; or

2. Only has a valid physical mailing address on file to which a paper ballot shall be sent.

(b) The ballot shall not be provided if there is no valid physical mailing address and no valid email address on file.

(3) The agency and its third-party vendor shall be held harmless for any incorrect email address or mailing address submitted by the participant or inadvertently entered by the agency or its third-party vendor.

Section 8. Casting of Votes.

(1) In order to be accepted and counted as a valid vote pursuant to KRS 61.645:

(a) Electronic votes and votes by telephone shall be cast on or before March 1 of the election year; and

(b) Paper votes shall be on a ballot postmarked to the required address by March 1 of the election year.

(2)

(a) For an electronic or paper ballot, the eligible voter shall:

1. Indicate the candidate or candidates of his or her choice pursuant to KRS 61.645(4)(f) and 78.782(4)(f); or

2. Indicate a write-in option and add the name of an eligible participant as specified by the Board for which the vote is being cast.

(b) To cast a vote by electronic ballot, the eligible voter shall electronically sign the completed ballot on the Web site provided and follow any other prompts.

(c) To cast a vote by paper ballot, the eligible voter shall sign the completed ballot and mail it to the address indicated on the paper ballot.

(3) To cast a vote by telephone, the eligible voter shall:

(a) Call the number provided on the paper or electronic ballot;

(b) Provide his or her unique voter identification number;

(c) Indicate the candidate or write-in candidate of his or her choice verbally; and

(d) Follow any other prompts.

(4) Each eligible voter shall cast only one (1) vote per open position in each applicable system and any subsequent vote received or submitted shall be invalid and not accepted.

Section 9. Review of Cast Votes.

(1) The third-party vendor shall review each cast vote to determine whether it is a valid vote.

(2)

(a) Invalid votes shall include ballots:

1. Returned to the agency or third-party vendor for faulty or invalid physical mailing addresses or email addresses;

2. Incorrectly returned or mailed to the street address of the agency or third-party vendor; or

3. That do not comply with Section 8 of this administrative regulation.

(b) Invalid votes shall not be considered or counted. Once the final results are announced, the ballots from these invalid votes shall be shredded or otherwise electronically destroyed by the third-party vendor and a certificate shall be provided to the agency confirming the shredding or destruction of these ballots.

Section 10. Tabulation of Votes.

(1) After totaling the valid votes, the third-party vendor shall certify the results of the election in writing to the Chair of the respective Board in care of the Chief Executive Officer. The certified results shall be provided to the agency on or before March 15 of the election year.

(2) Once all valid votes have been counted and the results are final, the third-party vendor shall destroy all ballots, including ballots or data generated and stored from electronic or telephone votes, and provide a certificate confirming the destruction of the ballots or data to the agency.

(3) The candidate or write-in candidate with the plurality of votes is elected to the vacant trustee position and shall begin his or her term of office on April 1 of the election year.

(4) The agency shall notify each balloted candidate of the outcome of the election.

Section 11. Board Vacancies.

(1) The agency shall notify participants of the vacancy of an elected trustee during an unexpired term within thirty (30) days of the vacancy occurring. The notice shall detail the steps members or retired members shall take to become a potential candidate.

(2) In order to be an eligible candidate for the trustee vacancy, a participant shall:

(a) Meet the requirements established in Section 3(3)(b) of this administrative regulation; and

(b) File the materials established in Section 3(3)(c) of this administrative regulation with the agency no later than sixty (60) days after the vacancy occurs.

(3) The agency shall provide a list of eligible candidates to the applicable board for consideration and appointment by majority vote of the remaining elected trustees pursuant to KRS 61.645(5) or 78.782(5)(a).

Section 12. Incorporation by reference.

(1) "Application for Trustee", March 2022, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the agency's website at https://kyret.ky.gov.

History

• RELATES TO: KRS 11A.020, 11A.040, 61.080, 61.505, 61.645, 78.782
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.645(4)(j), 78.782(4)(j)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with the requirements of KRS 13A.105(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.645(4)(j) and 78.782(4)(j) authorize the systems to promulgate an administrative regulation to implement the use of electronic and telephonic ballots in the trustee election process and requires paper ballots to be mailed upon request of any eligible voter. This administrative regulation establishes the procedures and requirements for preparing and casting electronic, telephonic, and paper ballots, and the tabulation of the ballots for trustee elections.
• History: 105 KAR 001:445. 46 Ky.R. 2001, 2396; eff. 6-2-2020; 51 Ky.R. 967, 1422; eff. 5-6-2025; 52 Ky.R. 1013, 1512; eff. 6-2-2026.

105 KAR 1:470 Agency communications {#sec-105-kar-1-470 omnilex-key=us-ky-regs-official--title-105--105 KAR 1:470}

Section 1. Definitions.

(1) "Agency account" means the member account or other agency issued account assigned to a COR.

(2) "COR" means a communications recipient; including a member, retired member, beneficiary, alternate payee, or recipient.

(3) "Electronic notification" means the process of delivering information, messages, or alerts through digital means, such as email, Short Message Service (SMS), Multimedia Messaging Service (MMS) notification, push notifications, or other digital communication methods.

(4) "Invalid email address" means an email address that is not valid or is no longer operational or associated with the COR, as verified by the agency through a COR's self-report, an audit, or other means.

(5) "Paperless communication" means communication provided by the agency in an electronic format through electronic notifications and the Self-Service Web site.

(6) "Self-Service Web site" means the secure Member Self-Service or Retiree Self-Service agency Web site at myretirement.ky.gov that allows a COR to access his or her agency account information and services related to that account.

(7) "Valid email address" means an email address the agency has on file for a COR that is operational and able to receive messages, or has not otherwise been deemed an invalid email address by the agency.

(8) "Valid physical mailing address" means the mailing address on file for a COR where he or she is able to receive U.S. mail, including:

(a) A current street address;

(b) A Post Office box registered with the United States Postal Service; or

(c) A private mailbox registered with a commercial mail receiving agency established pursuant to the United States Postal Service regulation.

Section 2. Agency Default to Paperless.

(1) Beginning May 1, 2024, the agency shall default to paperless communications for all CORs who have a valid email address on file. The agency shall provide CORs with notification of the default to paperless communication and information on how to opt-out.

(2)

(a) Any COR that has a valid email address on file as of May 1, 2024, that has not elected to opt-out in accordance with Section 5 of this administrative regulation, shall receive paperless communication from the agency, apart from limited exceptions as specified in Section 10 of this administrative regulation.

(b) A COR who has a valid email address on file, but does not have a valid physical mailing address on file, shall not be given the ability to opt-out.

(3) Any COR that does not have a valid email address on file as of May 1, 2024, shall not receive paperless communication until the COR's communication preferences change in accordance with Section 6 of this administrative regulation.

Section 3. Email Addresses.

(1)

(a) If a COR needs to add or update his or her email address, the COR shall complete one (1) of the following:

1. Update and save the email address on the Self-Service Web site;

2. Update the email address via phone by calling the agency and providing his or her agency issued personal identification number (PIN);

3. File a valid Form 2040, Change of Contact Information; or

4. Provide the email address on any valid filed agency form that has the option to update the email address.

(b)

1. The most recent update to the COR's email address that complies with this subsection shall be the email address used for paperless communication.

2. The agency shall notify the COR of the update to his or her email address.

(2) If a participating employer provides an email address to the agency and the COR does not already have a valid email address on file, the agency shall use the email address provided by the employer until either:

(a) The email address is identified by the agency as invalid; or

(b) The COR changes the email address in accordance with subsection (1) of this section.

(3) The agency shall perform tests and audits to assist in determining if an email address is valid.

(4) A COR shall routinely be requested to confirm his or her email address on the Self-Service Web site.

(5) If the agency determines an email address is invalid for a COR receiving paperless communication, he or she shall stop receiving paperless communication. The agency shall send the COR notification of the change via U.S. mail, which shall include information on how to update his or her email address and how to change his or her communication preferences.

(6) The agency shall maintain an internal record of changes made to a COR's email address.

Section 4. Paperless communication Notifications and Access.

(1) The agency shall provide paperless communication through the Self-Service Web site messaging center to all CORs with a valid email address on file who have not elected to opt-out in accordance with Section 5 of this administrative regulation.

(2)

(a) When a new message becomes available for a COR on the Self-Service Web site, he or she shall receive an electronic notification indicating that there is a message in the message center on the Self-Service Web site.

(b) If a COR has not set up a Self-Service Web site account, the COR's electronic notification shall include a hyperlink to view details of how to set up his or her Self-Service Web site account and access the message.

(c) A COR shall access the message by logging into the Self-Service Web site and viewing the message in the message center.

Section 5. Opt-out of Paperless Communications.

(1) To opt-out of paperless communications, a COR shall:

(a) File a valid Form 2040, Change of Contact Information, indicating the election to opt-out;

(b) Update via phone by calling the agency, providing his or her agency issued PIN, and notifying the agency of his or her election to opt-out; or

(c) Update and save the opt-out preference in his or her Self-Service Web site account.

(2)

(a) A COR that does not update his or her communication preference in accordance with this subsection shall continue to receive paperless communication from the agency, apart from limited exceptions as specified in Section 10 of this administrative regulation.

(b) The COR shall stop receiving paperless communication as soon as the request is processed by the agency, apart from limited exceptions as specified in Section 9 of this administrative regulation.

(c) The agency shall provide the COR with notice of the change in communication preferences.

Section 6. Changing to Paperless Communications.

(1) A COR who previously did not have a valid email address on file, shall complete one (1) of the following to change his or her communication preferences to paperless communications:

(a) File a valid Form 2040, Change of Contact Information, indicating the election to receive paperless communication and provided a valid email address;

(b) Update the email address via phone by calling the agency, providing his or her agency issued PIN and valid email address, and notifying the agency of his or her communication preferences;

(c) Update and save the preference to receive paperless communications in his or her Self-Service Web site account; or

(d) Provide the agency with a valid email address on any filed valid agency form that has the option to update the email address, except if the COR simultaneously elects to opt-out in accordance with Section 5 of this administrative regulation.

(2) A COR who previously elected to opt-out of paperless communications shall complete one (1) of the following to change his or her communication preferences to paperless communications:

(a) File a valid Form 2040, Change of Contact Information, indicating the election to receive paperless communication;

(b) Update via phone by calling the agency, providing his or her agency issued PIN, confirming the email address, and notifying the agency of his or her communication preference; or

(c) Update and save the preference to receive paperless communications in his or her Self-Service Web site account.

(3)

(a) A COR that does not update his or her communication preference in accordance with this subsection shall not receive paperless communication from the agency, apart from limited exceptions as specified in Section 9 of this administrative regulation.

(b) The agency shall provide the COR with notice of the change in communication preferences.

Section 7. New CORs.

(1) Beginning May 1, 2024, a default to paperless communications for a new COR shall occur when:

(a) A member with a valid email address on file begins participating in the systems; or

(b) An agency account is created for a new beneficiary, new alternate payee, or other new recipient.

(2) The agency shall provide the persons indicated in subsection (1) of this section notification of the default to paperless communication, how to access the Self-Service Web site, and how to update paperless communication preferences.

(3) If the person indicated in subsection (1) of this section does not opt-out in accordance with Section 5 of this administrative regulation, he or she shall receive paperless communication from the agency, apart from limited exceptions as specified in Section 10 of this administrative regulation.

(4) Beginning May 1, 2024, when a member begins participating in the systems, or an agency account is created for a new beneficiary, new alternative payee, or other new recipient, and there is no valid email address on file, the agency shall provide the person with information on how to update his or her email address and communication preferences, and how to access the Self-Service Web site. The person shall not receive paperless communication from the agency until the person changes his or her communication preferences in accordance with Section 6 of this administrative regulation and provides a valid email address.

Section 8. Termination of Employment with a Participating Employer.

(1) Except as provided in subsection (2) of this section, when the agency becomes aware that a member has terminated employment with a participating employer, the agency shall provide the member with notification indicating:

(a) The status of the member's current communication preference;

(b) If applicable, the valid email address currently on file for the member; and

(c) Information on how to update his or her email address and paperless communication preferences.

(2) If the member has requested an accumulated account balance refund in accordance with KRS 61.625(1) and 78.545, the agency shall not provide the member with the notification required in subsection (1) of this section.

Section 9. Exceptions to Paperless Communication Opt-out. A COR who is not receiving paperless communication, but has a valid email address on file, shall at times receive general member information that is not specific to the COR through his or her email address.

Section 10. Exceptions to Paperless Communication. A COR who is receiving paperless communication shall, at times, receive communication via other methods when required by:

(1) Local, state, or federal law, including tax laws;

(2) Third-party vendors;

(3) Medicare or other hospital and medical insurance; or

(4) At the discretion of the agency.

Section 11. Updating a Physical Mailing Address.

(1) For a COR to update his or her physical mailing address, the COR shall do one (1) of the following:

(a) Update and save the physical mailing address on the Self-Service Web site;

(b) Update the physical mailing address via phone by calling the agency and providing his or her agency issued PIN and the updated physical mailing address; or

(c) Provide the physical mailing address on any filed agency form that has the option to update the physical mailing address.

(2) The most recent update to the COR's physical mailing address that complies with this subsection (1) of this section shall be the physical mailing address used for non-paperless communication.

Section 12. Guardianship or Power of Attorney Communication.

(1) If a COR has a valid Guardianship Order, Conservatorship Order, or a Power of Attorney on file:

(a) All changes to the COR's agency account shall be made by filing the appropriate valid form or document; and

(b) No changes to the COR's agency account shall be made through the Self-Service Web site or by phone.

(2) Nothing in this section shall prevent the agency from providing paperless communications in compliance with Section 4 of this administrative regulation for a COR with a valid Guardianship Order, Conservatorship Order, or Power of Attorney on file.

Section 13. Incorporation by Reference.

(1) Form 2040, "Change of Contact Information", updated December 2023, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8:00 a.m. to 4:30 p.m. This material is also available on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505 – 16.652, 61.510 – 61.705, 78.510 – 78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. This administrative regulation establishes how the Kentucky Public Pensions Authority shall communicate with members, retired members, beneficiaries, alternate payees, and other recipients of a retirement allowance, and the procedures to change communication preferences.
• History: 50 Ky.R. 1622, 2015; eff. 7-2-2024.

Chapter 2 Accounts, Financials, and Federal Taxation

105 KAR 2:190 Qualified domestic relations orders {#sec-105-kar-2-190 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:190}

Section 1. Definitions.

(1) "Basic retirement allowance" means the basic payment option as defined by KRS 61.542(5)(f) and 78.545.

(2) "Benefit" means the retirement allowance as defined by KRS 16.505(12), 61.510(16), and 78.510(16).

(3) "Date of divorce" means the date the decree of dissolution of marriage is entered by a court of competent jurisdiction.

(4) "Effective retirement date" means the first date upon which a member's early, normal, or disability retirement benefits began or will begin.

(5) "Marital service" means the amount of service earned and purchased during the marriage.

(6) "Unreduced retirement benefit" means the full retirement allowance for which a participant is entitled in accordance with KRS 16.576, 16.577, 16.583, 61.559, 61.595, 61.597, 78.5510, 78.5512, 78.5514, and 78.5516.

Section 2. Information Requests.

(1) If information is necessary for the Court to calculate the amount due to the alternate payee for the purposes of a QDRO, the participant shall complete, sign, and file a valid Form 6433, Authorization for Release of Information and Request for Information for Qualified Domestic Relations Order, to obtain the needed information.

(2) In response to a filed valid Form 6433, if the participant has not yet retired, the agency shall provide as of the date of the divorce indicated on the QDRO, or if the date of divorce is not provided the last date contributions were reported, the participant's:

(a) Accumulated account balance during the marriage in each of the systems in which the participant has marital service;

(b) Total number of months of service credit earned and purchased in each of the systems in which the participant has service;

(c) The number of months of service credit earned and purchased during the marriage in each of the systems in which the participant has marital service;

(d) The hypothetical monthly retirement allowance pursuant to KRS 16.576, 16.577, 16.583, 61.559, 61.595, 61.597, 78.5510, 78.5512, 78.5514, and 78.5516 the participant would receive beginning on the date the participant is eligible for an unreduced retirement benefit, and broken down by each of the systems in which the participant has marital service. The hypothetical monthly retirement allowance shall be based on:

1. The participant's final compensation and service credit; or

2. The participant's accumulated account balance;

(e) The hypothetical partial lump sum payment option without survivor rights with a one (1) time lump-sum payment equal to twelve (12) monthly retirement allowances and the reduced ongoing monthly retirement allowance pursuant to KRS 61.635(12) and 78.545 that the participant would receive beginning on the date the participant is eligible for an unreduced retirement benefit, and broken down by each of the systems in which the participant has marital service. The hypothetical partial lump sum payment option and reduced ongoing monthly retirement allowance shall be based on:

1. The participant's final compensation and service credit; or

2. The participant's accumulate account balance; and

(f) The hypothetical actuarial equivalent refund payment or accumulated account balance refund payment the participant would receive, broken down by each of the systems in which the participant has marital service, when the participant is eligible for an unreduced retirement benefit based on:

1. The final compensation and service credit; or

2. The participant's accumulated account balance.

(3) In response to a filed valid Form 6433, if the participant retired prior to the effective date of the divorce indicated on the QDRO, the agency shall provide the participant's:

(a) Current monthly retirement benefit in each of the systems from which the participant is receiving a monthly retirement benefit;

(b) Total number of months of service credit earned and purchased during the marriage in each of the systems from which the participant is receiving a monthly retirement benefit; and

(c) Total number of months of service credit in each of the systems from which the participant is receiving a monthly retirement benefit.

(4)

(a) The alternate payee may request and obtain the information necessary for the court to calculate the amount due to the alternate payee for purposes of the QDRO by completing and filing a valid Form 6433, Authorization for Release of Information and Request for Information for Qualified Domestic Relations Orders, and an attached court issued subpoena or order compelling the release of the requested information.

(b) The agency shall respond to a valid Form 6433 filed in accordance with this subsection in the same manner as established in subsection (2) or (3) of this section as applicable.

(5)

(a) If information other than the information supplied by the agency in accordance with subsections (2) through (3) of this section is required:

1. The participant shall file an additional signed request for information in writing;

2. The alternate payee shall file an additional signed request for information in writing, and an attached court issued subpoena or order compelling the release of the requested information; or

3. Legal counsel shall file an additional signed request for information in writing, and documentation that he or she represents the participant or alternate payee, as applicable. An alternate payee's legal counsel shall also file a court issued subpoena or order compelling the release of the requested information.

(b) Requests for information, other than the information supplied by the agency in accordance with subsections (2) through (4) of this section, shall be answered pursuant to KRS 61.661 and 78.545.

Section 3. QDROs Prior to July 14, 2000. The provisions of this section shall only apply to QDROs that were approved for enforcement by the agency prior to July 14, 2000. After the participant notifies the agency of his or her requested effective retirement date, the agency shall administer a valid QDRO approved by the agency that was entered prior to the participant's effective retirement date as established in subsections (1) through (5) of this section.

(1) The agency shall provide the participant and the alternate payee, information regarding the amount of the benefits payable pursuant to the QDRO.

(2) The amount of the benefits payable pursuant to a valid QDRO shall be determined as established in paragraphs (a) through (f) of this subsection.

(a) The percentage of benefit due to the alternate payee shall be computed based on the following calculation.

(b) If a lump sum payment equal to the balance of the participant's accumulated account balance is to be made, the percentage due to the alternate payee as calculated by paragraph(a) of this subsection shall be multiplied by the participant's accumulated account balance and the result paid to the alternate payee. The participant shall be paid all amounts in excess of the amounts paid the alternate payee.

(c) If a monthly payment is to be made, the percentage due to the alternate payee, as calculated by paragraph(a) of this subsection, shall be multiplied by the participant's basic retirement allowance and the result shall be paid monthly to the alternate payee. The participant shall be paid all amounts in excess of the amounts paid to the alternate payee.

(d) Service credit added for disability retirement benefits under KRS 16.582, 61.600, 61.605, 78.5522, or 78.5524 shall not be included in determining the amount payable to the alternate payee. Service credit purchased during the period of marriage shall be included in the calculation under this paragraph.

(e) The payment options offered to the alternate payee:

1. Shall be based on the alternate payee's life expectancy;

2. Shall include only the payment options established in KRS 61.635 and 78.545, which do not provide lifetime benefits to a beneficiary; and

3. If the participant is eligible, shall include the ten (10) year certain option as established in KRS 16.576(4).

(f) The alternate payee of a QDRO approved for enforcement by the agency prior to July 14, 2000, shall receive increases given recipients under KRS 61.691 and 78.5518.

(3)

(a) If the participant dies prior to his or her effective retirement date and prior to the death of the alternate payee, the participant's account shall be divided in accordance with the QDRO between the alternate payee and the participant's beneficiary.

1. If the death benefit is a refund of the participant's accumulated account balance, the alternate payee shall only be offered a lump sum payment representing a portion of the participant's accumulated account balance calculated in accordance with subsection (2)(b) of this section.

2. If the death benefit is calculated under KRS 16.578, 61.640, or 78.5532, the alternate payee shall be allowed to choose a lifetime annuity, a sixty (60) month certain payment, a 120 month payment, or an actuarial equivalent refund.

(b)

1. If a participant with a pre-retirement QDRO dies after his or her effective retirement date and prior to the death of the alternate payee, there shall be no change to the alternate payee's benefits.

2. If a participant with a post-retirement QDRO dies prior to the death of the alternate payee, the QDRO on file shall be void and no further payment shall be made to the alternate payee.

(4)

(a) If the alternate payee predeceases the participant after the participant's effective retirement date, a lump sum, determined actuarially, of the payments remaining to the alternate payee, if any, shall be paid to the alternate payee's estate.

(b) If the alternate payee predeceases the participant prior to the participant's effective retirement date or withdrawal of account, the QDRO on file shall be void and payment shall not be made to the alternate payee or his or her estate.

(5) When benefits become payable to the alternate payee, the agency shall establish a separate account for the alternate payee, which shall consist of the alternate payee's pro rata share determined pursuant to subsection (2) of this section. Once the alternate payee's account has been established, the alternate payee shall not be entitled to further benefits acquired by the participant.

Section 4. QDROs On or After July 15, 2010.

(1) This section and Sections 5 through Section 20 of this administrative regulation shall only apply to QDROs approved for enforcement by the agency on or after July 15, 2010.

(2) A QDRO may apply to any of the systems in which the participant has marital service that is the subject of the QDRO and from which the participant will receive retirement benefits, except for the excess benefit plans established by KRS 16.568, 61.663, and 78.652.

(3) A valid QDRO shall be complete and contain all information required on the form that applies to the subject matter of the order:

(a) Form 6434, Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property, for a QDRO concerning the division of marital property that is completed pre-retirement;

(b) Form 6435, Post-Retirement Qualified Domestic Relations Order for Division of Marital Property, for a QDRO concerning the division of marital property that is completed post-retirement;

(c) Form 6436, Qualified Domestic Relations Order for Child Support, for a QDRO concerning the order of child support;

(d) Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency, for a QDRO concerning child support when completed by an Administrative Agency with the statutory authority to complete it; or

(e) Form 6438, Qualified Domestic Relations Order for Alimony/Maintenance, for a QDRO concerning alimony or maintenance.

Section 5. Pre-retirement QDROs for the Division of Marital Property.

(1) Only a QDRO for the purpose of the division of marital property shall be filed prior to a participant's effective retirement date.

(2) A QDRO issued for purpose of the division of the participant's retirement account, pursuant to a divorce entered prior to the participant's effective retirement date, shall be filed prior to retirement on a valid Form 6434, Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property. A Form 6434 entered or initially filed after the participant's retirement date shall be in compliance with Section 6 of this administrative regulation.

(3) The effective date of the Form 6434, Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property, shall be the participant's effective retirement date as established in KRS 61.590 and 78.545, or if the Form 6434 is approved following the participant's effective retirement date, the month following the month the Form 6434 was approved for enforcement by the agency.

(a) If the participant receives a lump-sum payment representing monthly retirement benefits paid retroactively to the participant's effective retirement date, the alternate payee shall receive a portion of the lump sum payment as included on the Form 6434.

(b) If the participant is not receiving a retirement benefit, then the alternate payee shall not receive a retirement benefit.

(4)

(a) A Form 6434, Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property, filed on or after July 1, 2024 shall include the amount to be paid to the alternate payee. The court shall use one (1) of the following methods to calculate the amount to be paid to the alternate payee:

1. A dollar amount;

2. A percentage of the participant's marital service; or

3. An alternative percentage of the participant's retirement payment option or accumulated account balance refund.

(b) If the court determines a dollar amount to be paid to the alternate payee, then the court shall complete all fields to indicate:

1. A monthly dollar amount if the participant elects a monthly retirement allowance;

2. A one (1) time lump-sum dollar amount if the participant elects the actuarial equivalent refund payment option pursuant to KRS 61.635(11) and 78.545;

3. A lump-sum dollar amount from participant's refund of his or her accumulated account balance if the participant elects to terminate his membership pursuant to KRS 61.625 and 78.545; and

4. A one (1) time lump-sum payment and a monthly dollar amount if the participant elects a partial lump-sum payment option pursuant to KRS 61.635(12) and 78.545.

(c)

1. If the court determines that a percentage of the participant's marital service be paid to the alternate payee, the percentage shall be determined based on the following calculation.

2. The agency shall determine the marital service based on the marital period as determined by the court in the QDRO;

3. The participant's total service credit shall be determined by the agency prior to the participant's filing of a request for a refund of the accumulated account balance, and shall be the total number of months of service credit used to calculate the participant's retirement payment options or the total number of months of service credit the participant had at the time of the request for refund of the accumulated account balance; and

4. To determine the amount due to the alternate payee, the percentage calculated in subparagraph 1. of this paragraph shall be applied to the following as appropriate:

a. The participant's basic monthly retirement allowance pursuant to KRS 16.576, 16.577, 16.583, 61.559, 61.595, 61.597, 78.5510, 78.5512, 78.5514, and 78.5516;

b. The participant's actuarial equivalent refund;

c. The participant's refund of his or her accumulated account balance; or

d. The one (1) time lump-sum payment, and to either the reduced monthly retirement allowance payment with no survivor rights option elected by the participant pursuant to KRS 61.635(12)(a) and 78.545, or if the participant elected a payment option with survivor rights pursuant to KRS 61.635(12)(b) and 78.545, the correlating reduced monthly retirement allowance payment without survivor rights.

(d)

1. If the court determines that an alternative percentage of the participant's retirement payment option or accumulated account balance refund be paid to the alternate payee, the payment to the alternate payee shall not exceed the participant's:

a. Retirement allowance amount elected at retirement;

b. Actuarial equivalent refund pursuant to KRS 61.635(11) and 78.545; or

c. Refund of his or her accumulated account balance pursuant KRS 61.625 and 78.545.

2. To determine the amount due to the alternate payee, the percentage indicated on the QDRO shall be applied to the following as appropriate:

a. The participant's basic monthly retirement allowance pursuant to KRS 16.576, 16.577, 16.583, 61.559, 61.595, 61.597, 78.5510, 78.5512, 78.5514, and 78.5516;

b. The participant's actuarial equivalent refund;

c. The participant's refund of his or her accumulated account balance; or

d. The one (1) time lump-sum payment, and to either the reduced monthly retirement allowance payment with no survivor rights option elected by the participant pursuant to KRS 61.635(12)(a) and 78.545, or if the participant elected a payment option with survivor rights pursuant to KRS 61.635(12)(b) and 78.545, the correlating reduced monthly retirement allowance payment without survivor rights.

(5)

(a) If a Form 6434, Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property, is filed prior to July 1, 2024 and the participant elects to receive a partial lump sum payment option pursuant to KRS 61.635(12) and 78.545, the alternate payee:

1. Shall receive a dollar amount or percentage applied to the participant's basic monthly retirement allowance; and

2. Shall not receive a portion of the partial lump-sum payable to the participant.

(b) A Form 6434 filed prior to July 1, 2024 shall include the amount to be paid to the alternate payee. The court shall use one (1) of the following methods to calculate the amount to be paid to the alternate payee:

1. A dollar amount;

2. A percentage of the participant's marital service; or

3. An alternative percentage of the participant's retirement payment option or accumulated account balance refund.

(c) If the court determines a dollar amount to be paid to the alternate payee, then the court shall complete all fields to indicate:

1. A monthly dollar amount if the participant elects a monthly retirement allowance, including the reduced monthly retirement allowance payable under a partial lump-sum option pursuant to KRS 61.635(12) and 78.545;

2. A one (1) time lump-sum dollar amount if the participant elects the actuarial equivalent refund payment option pursuant to KRS 61.635(11) and 78.545; and

3. A lump-sum dollar amount from the participant's refund of his or her accumulated account balance if the participant elects to terminate his or her membership pursuant to KRS 61.625 and 78.545.

(d)

1. If the court determines that a percentage of the participant's marital service be paid to the alternate payee, the percentage shall be determined based on the following calculation.

2. The agency shall determine the marital service based on the marital period as determined by the court in the QDRO;

3. The participant's total service credit shall be determined by the agency prior to the participant's filing of a request for a refund of the accumulated account balance, and shall be the total number of months of service credit used to calculate the participant's retirement payment options or the total number of months of service credit the participant had at the time of the request for refund of the accumulated account balance; and

4. To determine the amount due to the alternate payee, the above percentage shall be applied to the following as appropriate:

a. The participant's basic monthly retirement allowance pursuant to KRS 16.576, 16.577, 16.583, 61.559, 61.595, 61.597, 78.5510, 78.5512, 78.5514, and 78.5516;

b. The participant's actuarial equivalent refund; or

c. The participant's refund of his or her accumulated account balance.

(e)

1. If the court determines that an alternative percentage of the participant's retirement payment option or accumulated account balance refund be paid to the alternate payee, the payment to the alternate payee shall not exceed the participant's:

a. Retirement allowance amount elected at retirement;

b. Actuarial equivalent refund pursuant to KRS 61.635(11) and 78.545; or

c. Refund of his or her accumulated account balance pursuant KRS 61.625 and 78.545.

2. To determine the amount due to the alternate payee, the percentage indicated on the QDRO shall be applied to the following as appropriate:

a. The participant's basic monthly retirement allowance pursuant to KRS 16.576, 16.577, 16.583, 61.559, 61.595, 61.597, 78.5510, 78.5512, 78.5514, and 78.5516;

b. The participant's actuarial equivalent refund; or

c. The participant's refund of his or her accumulated account balance.

Section 6. Post Retirement QDRO for the Division of Marital Property.

(1) A QDRO issued for purposes of division of the participant's retirement account pursuant to a divorce decree entered after the participant's effective retirement date, or initially filed following the participant's effective retirement date, shall be filed on a valid Form 6435, Post-Retirement Qualified Domestic Relations Order for Division of Marital Property.

(2) The Form 6435, Post-Retirement Qualified Domestic Relations Order for Division of Marital Property, shall include the amount to be paid to the alternate payee. The court shall use one (1) of the following methods to calculate the amount to be paid to the alternate payee:

(a) A monthly dollar amount;

(b)

1. A percentage of the participant's selected monthly retirement benefit attributable to the marital service, which shall be determined based on the following calculation.

2. The agency shall determine the marital service based on the marital period as determined by the court in the QDRO; or

(c) An alternative percentage of the participant's selected monthly retirement benefit in the system or systems affected by the QDRO.

Section 7. Child Support QDROs.

(1) A QDRO issued for purposes of payment of child support shall be filed on:

(a) A valid Form 6436, Qualified Domestic Relations Order for Child Support entered by a court of competent jurisdiction; or

(b) A valid Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency, completed by an administrative agency with statutory authority to issue an order for child support in accordance with the laws governing child support.

(2) The QDRO shall include the monthly dollar amount of child support to be paid.

(3) The agency shall remit the payment for child support to the centralized registry established pursuant to KRS 205.712 and defined by 921 KAR 1:001, Section 1(5).

(a) The payment for child support shall be made payable to "Kentucky Child Support Enforcement."

(b) The participant's name and Social Security number shall be noted on the payment.

(4) The agency shall only accept a Form 6436, Qualified Domestic Relations Order for Child Support, or a Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency, if the participant is retired and is receiving a monthly retirement benefit.

Section 8. Alimony or Maintenance QDROs.

(1) A QDRO issued for purposes of payment of alimony or maintenance pursuant to KRS 403.200 shall be filed on a valid Form 6438, Qualified Domestic Relations Order for Alimony/Maintenance completed by a court of competent jurisdiction in accordance with the laws governing alimony or maintenance.

(2) The QDRO shall include the monthly dollar amount or percentage of the participant's monthly retirement allowance to be paid to the alternate payee for alimony or maintenance.

(3) The agency shall only accept a Form 6438, Qualified Domestic Relations Order for Alimony/Maintenance if the participant is retired and is receiving a monthly retirement allowance.

Section 9. Filing a QDRO.

(1) A QDRO shall be on the form incorporated by reference in this administrative regulation that applies to the subject matter of the order.

(a) A QDRO shall be signed by the judge of a court with jurisdiction over the case, and entered and certified by the Clerk of the Court, except as established in paragraph (b) of this subsection.

(b) The Form 6437, Qualified Domestic Relations Order for Payment of Child Support by an Administrative Agency, shall be signed by the head of the administrative agency, or his or her designee, with statutory authority to issue a QDRO.

(2) A valid copy of the QDRO that meets the requirements of subsection (1) of this section shall be filed.

(3)

(a) No one shall file a QDRO that is before an appellate court and is not final.

(b) The agency shall not have responsibility or liability for payments made pursuant to a QDRO filed in violation of this subsection that was altered or dissolved by an order of an appellate court of competent jurisdiction.

(4) A fee of fifty (50) dollars shall be submitted by certified check or money order in the amount of fifty (50) dollars made payable to the Kentucky State Treasurer as a nonrefundable processing fee with a filed QDRO, except as established in paragraph (b) or (c) of this subsection. The agency shall not review the QDRO to approve for enforcement unless the fee is submitted with the QDRO.

(a) Only one (1) certified check or money order shall be submitted in payment of the fee.

(b) There shall not be a fee required for a Form 6436, Qualified Domestic Relations Order for Child Support, or a Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency.

(c) If the dissolution of marriage action was filed in forma pauperis, then the agency shall waive the filing fee. A copy of the order allowing the dissolution of marriage action to be filed in forma pauperis shall be filed with the valid entered and certified QDRO.

(5)

(a) If the agency determines that the QDRO does not comply with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), or this administrative regulation, the participant, alternate payee, or their legal counsel shall have until the end of day ninety (90) calendar days from the date the agency's notification of the deficiency was provided, as detailed in Section 11(4) of this administrative regulation, to file a corrected QDRO without an additional fee.

(b) If a corrected valid QDRO is not filed by the end of day ninety (90) calendar days from the date of notification, then an additional nonrefundable fifty (50) dollar fee with any new or corrected QDRO filed after the ninety (90) calendar days shall be required.

(c) If the participant requests and receives a refund of his or her accumulated account balance during the ninety (90) calendar day period established in this subsection, and a corrected QDRO is filed after the participant has received a refund of his or her accumulated account balance, then the QDRO shall not be valid and enforceable by the agency.

Section 10. Deposit of Fees. All fees collected pursuant to this administrative regulation shall be deposited in the Retirement Allowance Account established in KRS 61.580 and 78.640.

Section 11. Determining if a QDRO is Approved for Enforcement.

(1) The agency shall determine if the QDRO is complete and qualifies as a valid QDRO pursuant to KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), and this administrative regulation.

(a) A QDRO shall not be effective until the agency has determined that it complies with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), and this administrative regulation, and approves the QDRO for enforcement.

(b) The agency shall provide notification of its determination by the end of day forty-five (45) calendar days from the date the QDRO is filed on or after July 15, 2011.

(2) The agency shall provide notification to the participant; the participant's legal counsel, if known; the alternate payee; and alternate payee's legal counsel, if known, that the QDRO has been approved for enforcement.

(a) If the participant has not yet retired, the agency shall place an otherwise valid and approved QDRO on file until the participant files a notification of retirement or an application for a refund of his or her accumulated account balance.

(b) If the participant has retired, the agency shall begin to enforce the QDRO the month after it is approved for enforcement by the agency.

(3)

(a) Except as provided in paragraph (c) of this subsection, the alternate payee shall complete and file a valid Form 6130, Authorization for Deposit of Retirement Payment, or if he or she does not have an account with a financial institution, a valid Form 6135, Payment of Retirement Payment by Check, prior to receiving payment under a QDRO.

(b) If the alternate payee has not filed a valid Form 6130, or a valid Form 6135, by the last day of the month before the first payment under the QDRO is due to be paid to the alternate payee, the agency shall segregate and hold the alternate payee's payments for a period of no more than eighteen (18) calendar months, with the period beginning on the first day of the month following the date the first payment was required by the QDRO approved for enforcement by the agency. The agency shall:

1. Pay the segregated amount to the alternate payee, if a valid Form 6130, or a valid Form 6135 is filed within the eighteen (18) calendar month hold period;

2. Pay the segregated amount to the participant, if a valid Form 6130, or a valid Form 6135 is not filed within the eighteen (18) calendar month hold period; or

3. Apply the QDRO prospectively only, if after the eighteen (18) calendar month hold period expires a valid Form 6130, or a valid Form 6135, is filed.

(c) An alternate payee listed on a valid Form 6436, Qualified Domestic Relations Order for Child Support, or a valid Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency shall not file a Form 6130 or a Form 6135.

(4)

(a) If the agency determines that the QDRO does not comply with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), or this administrative regulation, the agency shall provide written notification to the participant, the participant's legal counsel, if known, the alternate payee, and alternate payee's legal counsel, if known, including:

1. That the agency has determined the QDRO does not comply with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), or this administrative regulation;

2. The reason for the determination that the QDRO does not comply with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), or this administrative regulation; and

3. The changes necessary to make the QDRO in compliance with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), and this administrative regulation.

(b) If the sole deficiency is that the QDRO is not entered or certified, the agency shall segregate and hold any payments due the alternate payee pursuant to the QDRO for up to eighteen (18) calendar months, with the period beginning the first day of the month after the date the QDRO was found to be noncompliant in accordance with this subsection.

1. If within the eighteen (18) calendar month hold period, the entered and certified QDRO is filed, the agency shall pay the segregated amount to the alternate payee; or

2. When the eighteen (18) calendar month hold period ends, if the entered and certified QDRO is not on file, the agency shall pay the segregated amount to the participant.

3. If an entered and certified QDRO is filed after the eighteen (18) calendar month hold period expires, the QDRO shall only be applied prospectively.

Section 12. Multiple QDROs.

(1) If there are multiple QDROs on file for a participant's account, the QDROs shall be administered in the following order:

(a) QDROs for the Division of Marital Property;

(b) QDROs for Child Support; and

(c) QDROs for Alimony/Maintenance.

(2) If multiple QDROs for the Division of Marital Property are on file, they shall be administered in the order of approval by the agency.

(3) If multiple QDROs for Child Support are on file, they shall be administered in the order of approval by the agency.

(4) If multiple QDROs for Alimony/Maintenance are on file, they shall be administered in the order of approval by the agency.

(5) The agency shall not administer a QDRO if enforcement of the QDRO would result in the total amount of payments due to the alternate payees to exceed the participant's monthly retirement benefit under the multiple QDROs approved for enforcement by the agency. The agency shall notify the participant and alternate payees if a QDRO cannot be administered due to the exhaustion of the participant's monthly retirement benefit.

Section 13. Multiple Retirement Accounts. For participants who retired and subsequently reemployed with an employer in a regular full-time position prior to September 1, 2008, new QDROs affecting the participant's retirement account shall be administered as established in subsections (1) and (2) of this section.

(1) A valid Form 6434, Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property, that is filed and approved for enforcement by the agency shall be applied to any retirement account of the participant from which the participant has not retired.

(2) Any of the following valid QDROs that are filed and approved for enforcement by the agency shall be applied to any retirement account of the participant from which the participant has retired:

(a) Form 6435, Post-Retirement Qualified Domestic Relations Order for Division of Marital Property;

(b) Form 6436 Qualified Domestic Relations Order for Child Support;

(c) Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency; or

(d) Form 6438, Qualified Domestic Relations Order for Alimony/Maintenance.

Section 14. Amending or terminating QDRO's.

(1) If a QDRO approved for enforcement by the agency is amended or terminated, the participant, alternate payee, or their legal counsel shall file:

(a) The amended entered and certified valid QDRO as established in Section 9 of this administrative regulation; or

(b) The entered and certified order from a court of competent jurisdiction terminating the QDRO.

(2) Except as established in paragraph (a) or (b) of this subsection, a fee of twenty-five (25) dollars shall be submitted by certified check or money order made payable to the Kentucky State Treasurer as a nonrefundable processing fee for the amended QDRO or order terminating the QDRO. The agency shall not review the amended QDRO or order terminating the QDRO unless the fee is submitted with the amended QDRO or order terminating the QDRO.

(a) If the dissolution of marriage action was filed in forma pauperis, then the agency shall waive the filing fee. A copy of the order allowing the dissolution of marriage action to be filed in forma pauperis shall be filed with the entered and certified valid QDRO.

(b) There shall not be a fee required for a Form 6436, Qualified Domestic Relations Order for Child Support, or a Form 6437, Qualified Domestic Relations Order for Child Support by an Administrative Agency.

(3) The agency shall review the amended QDRO using the same procedures established in Section 11 of this administrative regulation.

(4) If the agency determines that the amended QDRO does not comply with KRS 16.645, 61.690, 78.545, 26 U.S.C. 414(p), and this administrative regulation, or that the order terminating the QDRO is insufficient, the participant, alternate payee, or their legal counsel shall have until the end of day ninety (90) calendar days from the date of the agency's notification of the deficiency, as established in Section 11(4) of this administrative regulation, was provided to file a corrected amended valid QDRO or a corrected order terminating the QDRO. If a corrected amended valid QDRO or a corrected order terminating the QDRO is not filed by the end of day ninety (90) calendar days from the date of notification, then an additional nonrefundable twenty-five (25) dollar fee shall be submitted with an amended valid QDRO or order terminating the QDRO that is filed after the ninety (90) calendar day period.

(5) An amended valid QDRO or an order terminating a QDRO approved by the agency shall only be administered prospectively.

Section 15. Disability Retirement Benefits for Members Participating Prior to August 1, 2004.

(1) The provisions of this section shall only apply to participants who were participating prior to August 1, 2004.

(2) If a participant with a QDRO on file is awarded disability retirement benefits pursuant to KRS 16.582, 61.600, 61.621, 78.545, 78.5522, or 78.5524, the alternate payee's portion of the participant's disability retirement benefit shall be calculated as established in paragraph (a) or (b) of this subsection.

(a) If the QDRO ordered that the alternate payee be paid a specific dollar amount from the participant's retirement benefit as established in Section 5(5)(a), Section 7, or Section 8 of this administrative regulation, the agency shall pay the specific dollar amount regardless of any enhancement of the participant's retirement benefit.

(b) If the QDRO ordered that the alternate payee be paid a percentage of the participant's retirement benefit as established in Section 5(5)(b) and (c) or Section 8 of this administrative regulation, the agency shall not use the service credit added to the participant's account pursuant to KRS 16.582(5)(a), 61.605(1), 78.5522(6), or 78.5524(5) for calculating the amount the alternate payee is due under the QDRO on file at the agency.

(3) If the participant's disability retirement benefits are discontinued pursuant to KRS 61.610, 61.615, 78.5526, and 78.5528, then:

(a) If the participant does not begin receiving early retirement benefits, the alternate payee's payment shall be discontinued;

(b) If the participant's benefit is changed to the participant's early retirement benefit, the alternate payee shall receive payment from the early retirement benefit pursuant to the QDRO;

(c) If the participant's disability retirement benefits are reinstated pursuant to KRS 61.615 and 78.5528, the alternate payee's payment shall be reinstated;

(d) If the participant later begins receiving early retirement benefits, the alternate payee shall receive payment from the early retirement benefit pursuant to the QDRO; or

(e) If the participant later begins receiving retirement benefits at normal retirement age, the alternate payee shall receive payment pursuant to subsection (2)(a) and (b) of this section.

Section 16. Disability Retirement Benefits for Members Participating on or after August 1, 2004.

(1) The provisions of this section shall only apply to participants whose participation began on or after August 1, 2004.

(2) If a participant who has a QDRO on file is awarded disability retirement benefits pursuant to KRS 16.582, 61.600, 61.621, 78.545, 78.5522, or 78.5524 the alternate payee's portion of the participant's disability retirement benefit shall be calculated as established in paragraph (a) or (b) of this subsection.

(a) If the QDRO ordered that the alternate payee be paid a specific dollar amount from the participant's retirement benefit as established in Section 5(5)(a), Section 7, or Section 8 of this administrative regulation, the agency shall pay the specific dollar amount regardless of any enhancement of the participant's retirement benefit.

(b) If the QDRO ordered that the alternate payee be paid a percentage of the participant's retirement benefit as provided in Section 5(5)(b) and (c) or Section 8 of this administrative regulation, the agency shall use the participant's benefit pursuant to KRS 16.582(5)(b) and (c), 61.605(2), 78.5522(6)(b) and (c), or 78.5524(5)(b) and (c) for calculating the amount the alternate payee is due under the QDRO on file.

(3) If the participant's disability retirement benefits are discontinued pursuant to KRS 61.610, 61.615, 78.5526, and 78.5528, then:

(a) If the participant does not begin receiving early retirement benefits, the alternate payee's payment shall be discontinued;

(b) If the participant's benefit is changed to the participant's early retirement benefit, the alternate payee shall receive payment from the early retirement benefit pursuant to the QDRO;

(c) If the participant's disability retirement benefits are reinstated pursuant to KRS 61.615 and 78.5528, the alternate payee's payment shall be reinstated;

(d) If the participant later begins receiving early retirement benefits, the alternate payee shall receive payment from the early retirement benefit pursuant to the QDRO; or

(e) If the participant later begins receiving retirement benefits at normal retirement age, the alternate payee shall receive payment pursuant to subsection (2)(a) and (b) of this section.

Section 17. Events That End or Amend a QDRO for Division of Marital Property, Alimony, or Maintenance.

(1) The participant, the alternate payee, or legal counsel for either party shall be responsible for notifying the agency of an event that causes payments to the alternate payee under a QDRO for Division of Marital Property or a QDRO for Alimony/Maintenance to end in accordance with KRS 16.645, 61.690(7), and 78.545.

(2) In the event of the participant or alternate payees' death, the QDRO on file shall be void and payment shall not be made to the alternate payee or his or her estate.

(3) The agency shall segregate and hold any payments due the alternate payee beginning the month after the agency's receipt of the notification until one (1) of the following occurs:

(a) The participant, alternate payee, or either party's legal counsel files proof of the event that causes payments to the alternate payee to end; or

(b) The agency independently verifies the event that causes payments to the alternate payee to end.

(4) As applicable, the participant, alternate payee, or either party's legal counsel shall file a copy of the alternate payee's marriage certificate or the alternate payee's or participant's death certificate as proof of the event that causes payment to the alternate payee to end.

(5) If a QDRO includes the number of months of payments, payment to the alternate payee shall cease after the designated number of months expire, and a notice of the exhaustion of payments shall not be required.

(6) If proof is not filed or obtained by the end of day ninety (90) calendar days from the notification to the agency, the payments being held shall be released to the alternate payee.

(7) The agency shall not be liable for any payments made to the alternate payee if the participant failed to provide proper notification and documentation of the event that causes payments to the alternate payee to end.

Section 18. Event That Ends or Amends a QDRO for Child Support.

(1) The participant shall be responsible for notifying the agency of an event that causes payments to the alternate payee under a QDRO for Child Support to be amended or to end.

(2)

(a) The agency shall segregate and hold the payments due to the alternate payee under a valid QDRO for child support if one (1) of the following is filed:

1. An order changing the custody of the child to someone other than the alternate payee;

2. A copy of the child's marriage certificate;

3. A letter from the child's high school indicating the child's graduation date, if the child is age of eighteen (18) or older;

4. The child's birth certificate indicating the child is age eighteen (18) or older;

5. An order of emancipation of the minor child; or

6. The child's death certificate.

(b) If the QDRO for child support is for the support of more than one (1) child, the agency shall not segregate or hold payments due to the alternate payee.

(c) If the participant does not file documentation to amend or terminate the QDRO for child support in accordance with Section 14 of this administrative regulation by the end-of-day ninety (90) calendar days from the participant's submission as established in paragraph (a) of this subsection, the payments being held shall be released to the alternate payee.

(3) The agency shall not be liable for any payments made to the alternate payee if the participant failed to provide proper notification, documentation of the event, the amended QDRO, or the court order that causes payments to the alternate payee to end or be amended.

Section 19. Correction or Change to Retirement Benefits.

(1) If the participant's retirement benefit is corrected pursuant to KRS 61.685 and 78.545, the alternate payee's payment shall also be corrected.

(a) If the alternate payee was overpaid because of the error that is being corrected pursuant to KRS 61.685 and 78.545, the agency shall withhold the amount of the overpayment from the alternate payee's payment.

(b) If the alternate payee was underpaid because of the error that is being corrected pursuant to KRS 61.685 and 78.545, the agency shall pay the alternate payee a lump sum payment of the additional funds due from the participant's payment.

(2) After the effective date of any cost-of-living increase established pursuant to KRS 61.691 and 78.5518, the agency shall recalculate the amounts due under a QDRO being administered by the agency.

(3) Payment to the alternate payee shall not change as a result of a change in the participant's retirement benefits as established in KRS 61.542(5)(b) and 78.545.

Section 20. Alternate Payee's Contact Information. The alternate payee shall be responsible for notifying the agency in writing of any change in mailing address. The agency shall contact the alternate payee at the last known mailing address on file to notify the alternate payee if a benefit under the QDRO becomes payable. The agency shall not have a duty or obligation to search for or locate an alternate payee.

Section 21. Hospital and Medical Insurance. Eligibility for a hospital or medical insurance plan administered by the agency shall not be established or required by a QDRO.

Section 22. Agency Subpoena or As a Party to a Domestic Relations Action.

(1) Any person or party who attempts to make the agency a party to a domestic relations action regarding a QDRO, or who requests a subpoena be issued for the personal appearance of a representative of the agency to appear at a deposition or in a court or administrative proceeding regarding a QDRO, shall reimburse the agency for the travel expenses and services of the agency's representative, or representatives, and the agency's legal counsel, as an administrative fee including:

(a) The Internal Revenue Service standard mileage rate;

(b) Parking and tolls;

(c) Meals if the agency's personnel are required to travel and be away from the retirement office from 6:30 a.m. to 9 a.m., 11 a.m. to 2 p.m., or 5 p.m. to 9 p.m.;

(d) The wages earned by the agency's employees during the time period they are away from the retirement office calculated by multiplying the hourly rate of each employee by the number of hours each employee was away from the office;

(e) The agency's costs and legal fees; and

(f) Lodging expenses, if necessary.

(2) The agency shall send an estimated amount owed for expenses to the person or party requesting the subpoena.

(a) The person or party shall remit payment via a certified check or money order for the estimated expenses made payable to the Kentucky State Treasurer before the date of appearance ordered in the subpoena.

(b) The agency shall send an invoice for any additional expenses owed by the party or issue a refund for any amount over the cost of the expenses.

Section 23. Agency Liability. Neither the agency nor its trustees nor its employees shall have any liability for making or withholding payments in accordance with the provisions of this administrative regulation.

Section 24. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6434, "Pre-Retirement Qualified Domestic Relations Order for Division of Marital Property", July 2024;

(b) Form 6435, "Post-Retirement Qualified Domestic Relations Order for Division of Marital Property", July 2024;

(c) Form 6436, "Qualified Domestic Relations Order for Child Support", July 2024;

(d) Form 6437, "Qualified Domestic Relations Order for Child Support by an Administrative Agency", October 2025;

(e) Form 6438, "Qualified Domestic Relations Order for Alimony/Maintenance", July 2024;

(f) Form 6130, "Authorization for Deposit of Retirement Payment", June 2023;

(g) Form 6135, "Payment of Retirement Payment by Check", June 2023; and

(h) Form 6433, "Authorization for Release of Information and Request for Information for Qualified Domestic Relations Orders", March 2024.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority,1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8 a.m. to 4:30 p.m. This material is also available on the agency's website at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 16.568, 16.576, 16.577, 16.578, 16.582, 16.583, 16.645(5), 61.505, 61.510, 61.542, 61.559, 61.580, 61.583, 61.590, 61.595, 61.597, 61.600, 61.605, 61.610, 61.615, 61.621, 61.625, 61.635, 61.637, 61.640, 61.661, 61.663, 61.690, 61.691, 78.510, 78.545, 78.5510, 78.5512, 78.5514, 78.5516, 78.5518, 78.5522, 78.5524, 78.5526, 78.5528, 78.5532, 78.5540, 78.640, 78.652, 205.712, 26 U.S.C. 414(p)
• STATUTORY AUTHORITY: KRS 16.645, 61.505(1)(g), 61.690, 78.545
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 through 16.652, 61.510 through 61.705, and 78.510 through 78.852. KRS 16.645, 61.690(3)(b), and 78.545 require the Kentucky Retirement Systems and the County Employees Retirement System to promulgate an administrative regulation establishing the requirements, procedures, and forms necessary to administer qualified domestic relations orders (QDROs). This administrative regulation establishes the requirements, procedures, and forms necessary to administer QDROs.
• History: 105 KAR 001:190. 18 Ky.R. 929; eff. 11-8-1991; 21 Ky.R. 1521; 1881; eff. 2-8-1995; 37 Ky.R. 945; 11-5-2010; 38 Ky.R. 494; eff. 9-28-2011; TAm eff. 6-11-2019; Cert eff. 6-11-2019; TAm eff. 4-25-2023; 50 Ky.R. 2265; 51 Ky.R. 251; eff. 11-5-2024; TAm eff. 10-3-2025, Recodified to 105 KAR 002:190; eff. 8-5-2026.

105 KAR 2:270 Federal tax withholding or direct rollover of eligible distributions {#sec-105-kar-2-270 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:270}

Section 1. Definitions.

(1) "Beneficiary" means:

(a) A person designated by the member in accordance with KRS 61.542 and 78.545 to receive any available benefits in the event of the member's death; or

(b) A person to whom the member's assets are ordered to be transferred pursuant to KRS 395.455.

(2) "Death benefit beneficiary" means:

(a) A person designated by the member in accordance with KRS 61.705 and 78.5538 to receive the $5,000 death benefit in the event of the member's death; or

(b) A person to whom the member's assets are ordered to be transferred pursuant to KRS 395.455.

(3) "Eligible beneficiary" means a person who:

(a) Meets the eligibility qualifications for in-line-of-duty death benefits as provided by KRS 16.601(1)-(3) and 78.5534(1)-(3) or duty-related death benefits as provided by KRS 61.621(3) and 78.545; and

(b) Elects, or has a parent or guardian who elects on his or her behalf, the payment option for benefits that includes the one-time payment of $10,000 in accordance with:

1. KRS 16.601(1)(b) or (3) and 78.5534(1)(b) or (3); or

2. KRS 61.621(3)(b) and 78.545.

Section 2. Application for Refund of Accumulated Account Balance.

(1)

(a) To apply for a refund of an accumulated account balance in accordance with KRS 61.625 and 78.545, a member shall complete and file a valid Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, selecting the option for payment.

(b) If the member intends to have the funds from the refund of an accumulated account balance rolled over directly into an IRA or other qualified plan, the member shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, certifying that the rollover will be accepted.

(c) The employer or employers may complete the applicable portion of the Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, verifying termination of employment.

(2) Upon request by the member, the agency shall provide the Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, and a copy of the Special Tax Notice Regarding Payments, to the member.

(3)

(a) The refund of the accumulated account balance shall not be processed unless the member is eligible to receive a refund pursuant to KRS 61.625 and 78.545 and the valid Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, is filed.

(b) The refund of the accumulated account balance shall not be processed earlier than forty-five (45) calendar days from the date of the member's termination of employment with the participating employer or employers that previously employed the member.

(c)

1. The member's refund of the accumulated account balance shall not be processed if within forty-five (45) calendar days of the date of the member's termination of employment with the employer or employers:

a. The member reemploys in any position, including a full-time, part-time, seasonal, temporary, emergency, interim, probationary, or intermittent position with one (1) or more employers through which he or she has participated; or

b. The member participates in the system or systems from which his or her accumulated account balance refund has been requested.

2. A member whose accumulated account balance refund is not processed pursuant to subparagraph 1. of this paragraph may reapply for a refund in accordance with subsection (1) of this section if the member again becomes eligible to receive a refund of his or her accumulated account balance pursuant to KRS 61.625 and 78.545.

(4) The member shall be required to repay the accumulated account balance refund to the systems in compliance with KRS 61.685(1) and 78.545 if, at the time of the member's receipt of the accumulated account balance refund, the member is:

(a) Reemployed in any position, including a full-time, part-time, seasonal, temporary, emergency, interim, probationary, or intermittent position, with one (1) or more employers through which he or she participated; or

(b) Participating in the system from which the accumulated account balance refund has been requested.

Section 3. Required Form for Member Selection of an Actuarial Refund Retirement Payment Option, Lump-sum Refund of the accumulated account balance, or Partial Lump-sum Retirement Payment Option.

(1) Along with each Form 6010, Estimated Retirement Allowance, the agency shall provide the member with the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, and the Special Tax Notice Regarding Payments.

(2)

(a) If the member files a valid Form 6010, Estimated Retirement Allowance, on which an actuarial refund retirement payment option, lump-sum refund of the accumulated account balance, or partial lump-sum retirement payment option is selected, the member shall also file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, selecting the option for payment.

(b) If the member intends to have the funds rolled over directly into an IRA or other qualified plan, the member shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, certifying that the rollover will be accepted.

(3) The agency shall not process payment of an actuarial refund retirement payment option, lump-sum refund of the accumulated account balance, or partial lump-sum retirement payment option to the member unless the following are on file:

(a) A valid Form 6010, Estimated Retirement Allowance, with the actuarial refund retirement payment option, lump-sum refund of the accumulated account balance, or partial lump-sum retirement option for payment selected; and

(b) A valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

Section 4. Required Form for Beneficiary Selection of Lump-sum Payment Option or Sixty (60) Months Certain Payment Option, or if Beneficiary Eligible for Lump-sum Refund of the Accumulated Account Balance Only.

(1) Single beneficiary.

(a)

1. Along with each Form 6010, Estimated Retirement Allowance, the agency shall provide the beneficiary with the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, and the Special Tax Notice Regarding Payments.

2. If the beneficiary is only eligible for a lump-sum refund of the deceased member's accumulated account balance, the agency shall provide the Form 6025, Direct Rollover, Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding Eligible Rollover Distribution, and the Special Tax Notice Regarding Payments, to the beneficiary.

(b)

1. If the beneficiary files a valid Form 6010, Estimated Retirement Allowance, on which a lump-sum actuarial refund, lump-sum refund of the deceased member's accumulated account balance, or sixty (60) months certain payment option is selected, or if the beneficiary is only eligible for a lump-sum refund of the deceased member's accumulated account balance, the beneficiary shall also file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, selecting the option for payment.

2. If the beneficiary intends to have the funds rolled over directly into an IRA or other qualified plan, the beneficiary shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, certifying that the rollover will be accepted.

(c) The agency shall not process payment to the beneficiary of a lump-sum actuarial refund, lump-sum refund of the deceased member's accumulated account balance, or sixty (60) months certain payment option unless the following are on file:

1. A valid Form 6010, Estimated Retirement Allowance, with the actuarial refund retirement payment option, lump-sum refund of the accumulated account balance, or partial lump-sum retirement payment option selected; and

2. A valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(2) Multiple beneficiaries.

(a) If there are multiple beneficiaries and the beneficiaries have elected a lump-sum actuarial refund, lump-sum refund of the deceased member's accumulated account balance, or sixty (60) months certain payment option, all beneficiaries shall agree to the option for payment selected and file a single valid Form 6010, Estimated Retirement Allowance, indicating the selection agreed upon, and signed by all beneficiaries. Each beneficiary shall also file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(b) If there are multiple beneficiaries and the beneficiaries are only eligible for a lump-sum refund of the deceased member's accumulated account balance, each beneficiary shall file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(c) Any beneficiary that intends to have his or her portion of the funds rolled over directly into an IRA or other qualified plan shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, certifying that the rollover will be accepted.

(d) The agency shall not process payment of a lump-sum actuarial refund, lump-sum refund of the deceased member's accumulated account balance, or sixty (60) months certain payment option to a beneficiary unless the following are on file for all beneficiaries:

1. A single valid Form 6010, Estimated Retirement Allowance, completed in accordance with paragraph (a) of this subsection, if applicable; and

2. A valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, for each beneficiary completed in accordance with paragraphs (b) and (c) of this subsection.

(3) This section solely establishes the forms and requirements for beneficiaries related to direct rollovers of distributions and the withholding of federal income tax on distributions that are not rolled over to an IRA or other qualified plan. Beneficiaries subject to this section may also be subject to additional requirements under 105 KAR 4:180 and 105 KAR 3:240.

Section 5. Required Form for Death Benefit Beneficiaries.

(1) Upon a member's death, the agency shall provide the Form 6025, Direct Rollover, Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding Eligible Rollover Distribution, and the Special Tax Notice Regarding Payments, to the death benefit beneficiary.

(2)

(a) The death benefit beneficiary shall file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(b) If the death benefit beneficiary intends to have the funds rolled over directly into an IRA or other qualified plan, the death benefit beneficiary shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, certifying that the rollover will be accepted.

(3) Payment to the death benefit beneficiary shall not be processed unless the member is deceased and the valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, is filed.

(4) This section solely establishes the forms and requirements for death benefit beneficiaries related to direct rollovers of distributions and the withholding of federal income tax on distributions that are not rolled over to an IRA or other qualified plan. Death benefit beneficiaries subject to this section may also be subject to additional requirements under 105 KAR 3:240.

Section 6. Required Form for Eligible Beneficiaries.

(1) The agency shall provide the Form 6025, Direct Rollover, Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding Eligible Rollover Distribution, and the Special Tax Notice Regarding Payments, to the eligible beneficiary.

(2)

(a) The eligible beneficiary shall file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(b) If the eligible beneficiary intends to have the funds rolled over directly into an IRA or other qualified plan, the eligible beneficiary shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, certifying that the rollover will be accepted.

(3) Payment to the eligible beneficiary shall not be processed unless the member is deceased and the valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, is filed.

(4) This section solely establishes the forms and requirements for eligible beneficiaries related to direct rollovers of distributions and the withholding of federal income tax on distributions that are not rolled over to an IRA or other qualified plan. Eligible beneficiaries subject to this section may also be subject to additional requirements under 105 KAR 3:457.

Section 7. Required Form for Alternate Payee who is Eligible for Actuarial Refund or Partial Lump-sum Payment Option, or Eligible for a Portion of the Lump-sum Refund, Partial Lump-sum, or Actuarial Refund Retirement Payment Option selected by the Member.

(1) If the alternate payee is eligible for a lump-sum portion of the member's accumulated account balance, actuarial refund, or partial lump-sum payment option pursuant to a qualified domestic relations order, or an actuarial refund or partial lump-sum payment option pursuant to a qualified domestic relations order, the agency shall provide the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, and the Special Tax Notice Regarding Payments, to the alternate payee.

(2)

(a) To receive a lump-sum portion of the member's accumulated account balance, actuarial refund, or partial lump-sum payment option pursuant to a qualified domestic relations order, or to receive an actuarial refund or partial lump-sum payment pursuant to a qualified domestic relations order, the alternate payee shall file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(b) If the alternate payee intends to have the funds described in paragraph (a) of this subsection rolled over directly into an IRA or other qualified plan, the alternate payee shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, certifying that the rollover will be accepted.

(3) The payment to an alternate payee of an actuarial refund or lump-sum refund pursuant to a qualified domestic relations order, or a portion of the member's accumulated account balance, actuarial refund, or partial lump-sum payment option pursuant to the qualified domestic relations order shall not be processed until the valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, is filed.

(4)

(a) If the alternate payee does not file the valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, by the end of day thirty (30) calendar days from the date the form and the Special Tax Notice Regarding Payments were provided to the alternate payee, the alternate payee's payment shall be processed and treated for federal income tax purposes as if the alternate payee had made an election to directly receive the funds instead of rolling over the payment to an IRA or other qualified plan.

(b)

1. The agency shall hold the amount payable to the alternate payee under this section for at least 180 calendar days after the payment becomes payable.

2. The agency shall make all reasonable efforts to locate the alternate payee during the 180 calendar days, and shall make payment to the alternate payee if he or she is located within that period.

3. If the alternate payee has not been located during the time period described in subparagraph 1. of this paragraph and the agency has exhausted all reasonable efforts to locate the alternate payee, the agency shall pay the payment held to the member and shall assign the federal tax liability for this payment to the member. Interest shall not accrue on this lump-sum payment during the 180 calendar day period or thereafter. If the alternate payee is subsequently located, any amounts already paid to the member shall no longer be payable to the alternate payee.

Section 8. Optional Form for Qualified Public Safety Employee electing to receive an Actuarial Refund Retirement Payment Option, Lump-sum Refund, Partial Lump-sum Refund, or Ten (10) Year Certain Retirement Payment Option.

(1) A member who was last employed as a "qualified public safety employee" as defined in 26 U.S.C. Internal Revenue Code, Section 72(t), and who is electing to receive an actuarial refund, lump-sum refund of the accumulated account balance, partial lump-sum refund, or the ten (10) years certain option, shall not be subject to the ten (10) percent early distribution tax penalty if the member files the following valid forms:

(a) The Form 4527, Certification by a "Qualified Public Safety Employee" and Request for an Exception to the 10% Early Distribution Penalty in IRC 72(t); and

(b) The Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, or the Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution.

(2) Upon request by the member, the agency shall provide the Form 4527, Certification by a "Qualified Public Safety Employee" and Request for an Exception to the 10% Early Distribution Penalty in IRC 72(t), to the member.

Section 9. Optional Form for Greater Federal Tax Withholding.

(1)

(a) If the member does not elect to have the refund of the accumulated account balance rolled over directly into an IRA or other qualified plan, except as provided in paragraph (b) of this subsection, twenty (20) percent for federal taxes shall be withheld from funds paid to a member who files a valid Form 4525, Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection, in accordance with Section 2 of this administrative regulation.

(b) If the member wants to withhold more than the mandatory twenty (20) percent of the funds for federal taxes, the member shall file a valid Form 6028, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions.

(2)

(a) If the member, beneficiary, death benefit beneficiary, eligible beneficiary, or alternate payee does not elect to have the funds rolled over directly into an IRA or other qualified plan, except as provided in paragraph (b) of this subsection, twenty (20) percent for federal taxes shall be withheld from funds paid to the member, beneficiary, or alternate payee who files a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, in accordance with Sections 3 through 7 of this administrative regulation.

(b) If the member, beneficiary, death benefit beneficiary, eligible beneficiary, or alternate payee wants to withhold more than the mandatory twenty (20) percent of the funds for federal taxes, the member, beneficiary, or alternate payee shall file a valid Form 6028, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions.

(c) If an invalid, incomplete, or incorrect Form 6028, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions, is filed, the agency shall notify the person who filed the incomplete or incorrect Form 6028 that he or she has until the end of day forty-five (45) calendar days from the date of notification to file a corrected valid Form 6028, or the funds will be paid with the regular twenty (20) percent withholding for federal taxes.

Section 10. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Special Tax Notice Regarding Payments", July 2023;

(b) Form 4525, "Application for Refund of Member Contributions and Direct Rollover/Direct Payment Selection", April 2021;

(c) Form 4527, "Certification by a "Qualified Public Safety Employee" and Request for an Exception to the 10% Early Distribution Penalty in IRC 72(t)", September 2023;

(d) Form 6010, "Estimated Retirement Allowance", April 2021;

(e) Form 6025, "Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution", June 2023; and

(f) Form 6028, "Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions", November 2022.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8 a.m. to 4:30 p.m., or on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 16.578, 16.601, 16.645, 61.505(1)(g), 61.510, 61.542, 61.621, 61.625, 61.635, 61.640, 61.685, 61.690, 61.705, 78.510, 78.545, 78.5534, 78.5538, 395.455, 26 U.S.C. 72(t), 401(a), 402
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. 26 U.S.C. 402 establishes the federal taxation requirements regarding direct rollovers of distributions and the withholding of federal income tax on distributions that are not rolled over to an IRA or other qualified plan. This administrative regulation establishes the procedure for informing affected members, beneficiaries, and alternate payees of their rights with regard to federal taxation rules and provides forms for members, beneficiaries, and alternate payees to indicate their preference for federal tax withholding or direct rollover of eligible distributions. This administrative regulation also establishes a procedure to issue a check to an alternate payee of a qualified domestic relations order if the alternate payee does not file the form required for federal income tax purposes within a reasonable time, and a procedure if an alternate payee cannot be located.
• History: 105 KAR 001:270. 19 Ky.R. 2352; eff. 6-7-1993; Am. 20 Ky.R. 830; eff. 12-6-1993; 21 Ky.R. 1532; eff. 2-8-1995; 29 Ky.R. 773; eff. 11-12-2002; 34 Ky.R. 121; 545; eff. 10-5-2007; 35 Ky.R. 119; eff. 10-3-2008; Crt eff. 2-24-2020; 47 Ky.R. 2623; 48 Ky.R. 767; eff. 11-30-2021; 50 Ky.R. 1173, 1654; eff. 5-7-2024; Recodified to 105 KAR 002:270; eff. 8-5-2026.

105 KAR 2:340 Rollovers and transfers of contributions in other plans {#sec-105-kar-2-340 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:340}

Section 1.

(1)

(a) An eligible employee may purchase service credit under KRS 16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852 by:

1. Transferring funds through a direct trustee-to-trustee transfer pursuant to applicable sections of the Internal Revenue Code and associated regulations or rulings;

2. Direct rollover pursuant to 26 U.S.C. sec. 401(a)(31) and associated regulations or rulings; or

3. Rollover of funds pursuant to 26 U.S.C. sec. 402(c) or 408(d)(3).

(b) The Kentucky Public Pensions Authority shall accept the transfer or rollover to the extent permitted by law pursuant to applicable provisions of the Internal Revenue Code and associated regulations and rulings.

(2) The agency shall not accept a rollover or transfer of funds from a retirement plan or deferred compensation arrangement unless the employee has obtained a calculation of the cost of the service from the agency.

Section 2.

(1) An employee who intends to rollover or transfer eligible funds from a retirement plan or deferred compensation arrangement shall complete Section 1 of "Form 4170, Direct Transfer/Rollover Authorization Form", incorporated by reference in 105 KAR 1:330.

(2) The financial institution or plan administrator responsible for the employee's account in the retirement plan or deferred compensation arrangement shall complete Section 2 of Form 4170.

(3) The completed Form 4170 shall be filed at the agency by the payment due date. A completed form not filed by the payment due date shall be void.

(4) The financial institution shall complete the rollover or transfer within sixty (60) days from the payment due date.

Section 3. If the employee is making a lump sum purchase by rollover or transfer from a retirement plan or deferred compensation arrangement and the total distribution amount at the time of transfer or rollover by the financial institution or plan administrator responsible for the employee's account in the retirement plan or deferred compensation arrangement is less than total cost of the service:

(1) Upon notification, the employee shall pay the additional cost by the purchase due date.

(2) If the transfer or rollover amount is not known until after the purchase due date, the employee shall have ten (10) working days from the date of notification to submit the additional cost due.

(3) If the employee does not timely submit the payment pursuant to subsection 1 or 2 of this section for the additional cost due to the agency, the agency shall credit the employee's account with the maximum service credit that may be purchased under the applicable statute for the type of service, whether in months or increments, by an amount equal to or less than the total distribution. The agency shall return any excess amount to the retirement plan or deferred compensation arrangement.

Section 4. If the total distribution amount at the time of transfer or rollover by the financial institution or plan administrator responsible for the employee's account in the retirement plan or deferred compensation arrangement is less than total cost of the service, and the employee is paying the remaining principal of an installment purchase agreement under KRS 61.552(9)(a)2.:

(1) The employee shall pay the additional cost due within sixty (60) days of termination of the installment purchase agreement.

(2) If the employee does not submit the payment to the agency by the purchase due date or within sixty (60) days of termination of the installment purchase agreement, the agency shall return the total distribution to the retirement plan or deferred compensation arrangement.

Section 5. If the actual total distribution at the time of transfer by the financial institution responsible for the employee's account in the retirement plan or deferred compensation arrangement is greater than the amount certified on Form 4170, Direct Transfer/Rollover Authorization Form, the amount in excess of the cost of the service shall be returned:

(1) First, to the employee from funds paid by the employee toward the service purchase; and

(2) Second, to the financial institution responsible for the employee's account in the retirement plan or deferred compensation arrangement.

History

• RELATES TO: KRS 16.505 – 16.652, 61.505, 61.552, 78.510 – 78.852, 26 U.S.C. secs. 401(a)(31), 402(c), 408(d)(3)
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority on behalf of the County Employees Retirement System and Kentucky Retirement System to promulgate all administrative regulations that are consistent with and are necessary or proper in order to carry out the provisions of duties authorized by KRS 16.505 to 16.652 and 61.505 to 61.705. KRS 61.552(9)(a)3. authorizes an eligible employee to purchase service credit in the County Employees Retirement System, Kentucky Employees Retirement System, or State Police Retirement System by rollover or transfer of funds from a retirement plan or deferred compensation arrangement, to the extent allowed under the Internal Revenue Code. This administrative regulation establishes the procedures and the form for purchasing service credit by rollover or transfer of funds from a retirement plan or deferred compensation arrangement.
• History: 105 KAR 001:340. 28 Ky.R. 1007; 1355; eff. 12-19-2001; 29 Ky.R. 782; 1256; eff. 11-12-2002; TAm eff. 3-5-2019; Crt eff. 3-5-2019; 52 Ky.R. 1009; eff. 6-2-2026; Recodified to 105 KAR 002:340; eff. 8-5-2026.

105 KAR 2:345 Rollovers and transfers of contributions to other plans {#sec-105-kar-2-345 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:345}

Section 1. "Eligible rollover distribution" shall include any distribution of all or any portion of the balance to the credit of the distributee, except:

(1) Any distribution that is one (1) of a series of substantially equal periodic payments made at least annually:

(a) For the life or life expectancy of the distributee and the distributee's designated beneficiary;

(b) The joint lives or joint life expectancies of the distributee and the distributee's designated beneficiary; or

(c) For a specified period of ten years or more;

(2) Any distribution to the extent the distribution is required under 26 U.S.C. 401(a)(9), except as provided in Section 2 of this administrative regulation;

(3) The portion of any distribution that is not includable in gross income; and

(4) Any other distribution that is reasonably expected to total less than $200 during the year.

Section 2.

(1) Effective January 1, 2002, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includable in gross income. However, this portion may be transferred:

(a) Only to:

1. An individual retirement account or annuity described in 26 U.S.C. 408 (a) or (b);

2. A qualified defined contribution plan described in 26 U.S.C. 401(a);

3. On or after January 1, 2007, a qualified defined benefit plan described in 26 U.S.C. 401(a); or

4. An annuity contract described in 26 U.S.C. 403(b); and

(b) An account or plan provided for in Section 2(1)(a)2.-4. of this administrative regulation that agrees to separately account for amounts so transferred, and earnings on those amounts, including separately accounting for the portion of the distribution:

1. That is includable in gross income; and

2. That is not so includable.

(2) Effective January 1, 2002, the definition of eligible rollover distribution shall also include a distribution to a surviving spouse, or to a spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in 26 U.S.C. 414(p).

(3) "Eligible retirement plan" shall include any of the following that accepts the distributee's eligible rollover distribution:

(a) An individual retirement account described in 26 U.S.C. 408(a);

(b) An individual retirement annuity described in 26 U.S.C. 408(b);

(c) An annuity plan described in 26 U.S.C. 403(a);

(d) A qualified trust described in 26 U.S.C. 401(a);

(e) Effective January 1, 2002, an annuity contract described in 26 U.S.C. 403(b),

(f) Effective January 1, 2002, a plan eligible under 26 U.S.C. 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into that plan from the retirement system, or

(g) Effective January 1, 2008, a Roth IRA described in 26 U.S.C. 408A.

(4)

(a) "Distributee" shall include an employee or former employee and the following:

1. The employee's or former employee's surviving spouse; and

2. The employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order as defined in 26 U.S.C. 414(p).

(b) Effective January 1, 2007, a "distributee" shall also include a nonspouse beneficiary who is a designated beneficiary as defined by 26 U.S.C. 401(a)(9)(E). However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution, and the account or annuity shall be treated as an inherited individual retirement account or annuity.

(c) "Direct rollover" shall include a payment by the plan to the eligible retirement plan specified by the distributee.

History

• RELATES TO: KRS 16.510-16.652, 61.515-61.705, 78.520-78.852, 26 U.S.C. secs. 401(a)(31), 402(c), 408(d)(3)
• STATUTORY AUTHORITY: KRS 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(g) requires the Board of Trustees of the Kentucky Retirement Systems to promulgate administrative regulations necessary or proper in order to carry out the provisions of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852. This administrative regulation establishes what constitutes eligible rollover distributions, eligible retirement plans, distributions, distributees, and direct rollovers for purposes of compliance with 26 U.S.C. 401(a).
• History: 105 KAR 001:345. 35 Ky.R. 1094; 1721; eff. 2-6-2009; TAm eff. 3-5-2019; Crt eff. 3-5-2019; Crt eff. 10-3-2025; TAm eff. 10-7-2025; Recodified to 105 KAR 002:345; eff. 8-5-2026.

105 KAR 2:380 Minimum distribution {#sec-105-kar-2-380 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:380}

Section 1. Definitions.

(1) "Applicable age" means the age established in 26 U.S.C. 401(a)(9)(C)(v).

(2) "Designated beneficiary" means:

(a) An individual designated as the beneficiary under applicable plan provisions or by a participant's affirmative election; or

(b) A special needs trust as defined by KRS 16.505, 61.510, or 78.510 that is also a trust described in 26 C.F.R. 1.401(a)(9)-(4)(f)(1)(i) designated as the beneficiary under applicable plan provisions or by a participant's affirmative election.

(3) "Required beginning date" means April 1 of the calendar year following the later of the calendar year in which the member attains the applicable age or retires.

Section 2.

(1) This administrative regulation shall apply to members of a fund established in accordance with KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852.

(2) Kentucky Public Pensions Authority shall pay all benefits in accordance with 26 U.S.C. 401(a)(9) and the Code of Federal Regulations in effect under that section, as applicable to a governmental plan within the meaning of 26 U.S.C. 414(d). The requirements of 26 U.S.C. 401(a)(9) and Title 26 of the Code of Federal Regulations shall take precedence over any inconsistent provisions of this administrative regulation or KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852.

(3) The member's entire interest shall be distributed over the member's life or lives of the member and a designated beneficiary, or over a period not extending beyond the life expectancy of the member or of the member and a designated beneficiary.

Section 3.

(1) Except as provided in subsection (2) of this section, the member's entire interest shall be distributed or begin to be distributed no later than the member's required beginning date.

(2) If the member dies before distributions begin, the member's entire interest shall be distributed, or begin to be distributed, no later than as established in this subsection.

(a) Except as provided in subsection (3) of this section, distributions to a member's sole designated beneficiary shall begin by the later of:

1. December 31 of the calendar year immediately following the calendar year in which the member died; or

2. December 31 of the calendar year in which the member would have attained the applicable age.

(b) If there is no designated beneficiary as of September 30 of the year following the year of the member's death, or if the beneficiary on file is a trust other than a trust that is a designated beneficiary, the member's entire interest shall be distributed by December 31 of the calendar year containing the fifth anniversary of the member's death.

(c) If the member's surviving spouse is the member's sole designated beneficiary and the surviving spouse dies after the member but before distributions to the surviving spouse begin, this subsection, except for paragraph (a), shall apply as if the surviving spouse were the member as established in 26 C.F.R. 1.401(a)(9)-3(e).

(3) If a member dies after the required distribution of benefits has begun, the remaining portion of the member's interest shall be distributed at least as rapidly as under the method of distribution before the member's death.

(4)

(a) For purposes of Section 3(2) to (3) and Section 6 of this administrative regulation, distributions shall begin on the member's required beginning date.

(b) If annuity payments irrevocably commence to the member before the member's required beginning date, or to the member's surviving spouse before the date distributions are required to begin to the surviving spouse pursuant to subsection (2)(a) of this section, the date distributions are considered to begin shall be the date distributions actually commence.

Section 4.

(1) If the member's interest is paid in the form of annuity distributions, payments pursuant to the annuity shall:

(a) Be paid in monthly periodic payments;

(b) Have a distribution period over a life or lives, or over a period certain not longer than the period established in Title 26 of the Code of Federal Regulations;

(c) Not change the period certain once payments have begun over a period certain, even if the period certain is shorter than the maximum permitted; and

(d) Increase payments only:

1. By the annual percentage increase provided for pursuant to KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852;

2. To the extent of the reduction in the amount of the member's payments to provide for a survivor benefit upon death, but only if the beneficiary whose life was being used to determine the distribution period described in this section dies, or if the beneficiary is the member's spouse and they divorce, as provided in KRS 61.635(10);

3. To provide cash refunds of employee contributions upon the member's death; or

4. To pay any increased benefits that result from a plan amendment.

(2)

(a) The amount that shall be distributed on or before the member's required beginning date, or if the member dies before distributions begin, the date distributions are required to begin pursuant to Section 3 of this administrative regulation, shall be the payment that is required for one (1) month.

(b) The second payment shall not be required to be made until the end of the next payment interval even if that payment interval ends in the next calendar year.

(c) All of the member's benefit accruals as of the last day of the first distribution calendar year shall be included in the calculation of the amount of the annuity payments for months ending on or after the member's required beginning date.

Section 5.

(1) The amount of annuity paid to a member's beneficiary shall not exceed the maximum determined under the incidental death benefit requirement established in 26 U.S.C. 401(a)(9)(G), and the minimum distribution incidental benefit rule established in 26 C.F.R. 1.401(a)(9)-6(b).

(2) The death and disability benefits provided by Kentucky Retirement Systems and County Employees Retirement System shall be limited by the incidental benefit rule established in 26 U.S.C. 401(a)(9)(g) and 1.401-1(b)(1)(i). As a result, the total death or disability benefits payable shall not exceed twenty-five (25) percent of the cost of all of the members' benefits received from Kentucky Retirement Systems and County Employees Retirement System.

(3)

(a) Unless the member's spouse who is more than ten (10) years younger than the member is the sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain for an annuity distribution commencing during the member's lifetime shall not exceed the applicable distribution period for the member pursuant to the uniform lifetime table established in 26 C.F.R. 1.401(a)(9)-9 for the calendar year that contains the annuity starting date.

(b) If the member is younger than the applicable age on the member's birthday in the calendar year that includes the annuity starting date, the period certain may not exceed the limitation on the period certain for a person who has attained the applicable age, increased by the number of years the member is younger than the applicable age on that birthday.

(4) If the member's spouse is ten (10) years younger than the member and is the member's sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain shall not exceed the longer of the member's applicable distribution period, as determined pursuant to this subsection, or the joint life and last survivor expectancy of the member and the member's spouse as determined pursuant to the joint and last survivor table established in 26 C.F.R. 1.401(a)(9)-9, using the member's and spouse's attained ages as of the member's and spouse's birthdays in the calendar year that contains the annuity starting date.

Section 6.

(1) If the member dies before the date distribution of the member's interest begins and there is a designated beneficiary, the entire interest payable to the member shall be distributed, beginning no later than the time established in Section 3(2)(a) or (b) of this administrative regulation, over the life of the designated beneficiary or over a period certain not exceeding:

(a) Unless the annuity starting date is before the first distribution calendar year, the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar year immediately following the calendar year of the member's death; or

(b) If the annuity starting date is before the first distribution calendar year, the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar year that contains the annuity starting date.

(2) If the member dies before the date distribution of his or her interest begins, the member's surviving spouse is the member's sole designated beneficiary, and the surviving spouse dies before distributions to the surviving spouse begin, this section shall apply as if the surviving spouse were the member, except that the time by which distributions are required to begin shall be determined without regard to Section 3(2)(a) of this administrative regulation.

History

• RELATES TO: KRS 61.645(9)(e), 26 C.F.R. 1.401(a)(9)-1-1.401(a)(9)-9, 26 U.S.C. 401(a)(9), 414(d)
• STATUTORY AUTHORITY: KRS 61.635(16)(b)4., 61.645(9)(e)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.105(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Kentucky Public Pensions Authority on behalf of the Kentucky Retirement Systems and the County Employees Retirement System to promulgate administrative regulations necessary to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. KRS 61.645(9)(e) and this administrative regulation implement the statutory requirements of IRC Section 401(a)(9), which is codified as 26 U.S.C. 401(a)(9). KRS 61.635(16)(b)4. authorizes the KPPA to promulgate administrative regulations regarding beneficiaries of state-administered plans that are special needs trusts. This administrative regulation establishes minimum distribution requirements as applied to a governmental plan pursuant to 26 U.S.C. 414(d), 401(a)(9), and the federal SECURE Act of 2022.
• History: 105 KAR 001:380. 30 Ky.R. 1137; 1457; eff. 1-5-2004; 34 Ky.R. 124; 547; eff. 10-5-2007; 35 Ky.R. 973; 1722; eff. 2-6-2009; TAm eff. 3-5-2019; Crt eff. 3-5-2019; 52 Ky.R. 1385, 1837, 2050; Recodified to 105 KAR 02:380; eff. 9-1-2026.

105 KAR 2:400 Federal taxation limitation year {#sec-105-kar-2-400 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:400}

Section 1. Definitions.

(1) "Annual addition" is defined by 26 U.S.C. 415(c)(2).

(2) "Annual benefit" is defined by 26 U.S.C. 415(b)(2).

(3) "Fiscal year" is defined by KRS 16.505(32), 61.510(19), and 78.510(19).

(4) "415(b) limit" means the limitation on benefits established by 26 U.S.C. 415(b).

(5) "415(c) limit" means the limitation on annual additions established by 26 U.S.C. 415(c).

Section 2. The limitation year established in 26 U.S.C. Section 415 for determining contribution and benefit limits in the plans administered by the Kentucky Retirement Systems or County Employees Retirement System shall be the fiscal year.

Section 3. This administrative regulation shall apply to all plans administered by Kentucky Retirement Systems or County Employees Retirement System. Subject to the provisions of this administrative regulation, benefits paid from, and employee contributions made to, these plans shall not exceed the maximum benefits and the maximum annual addition, respectively, as established in 26 U.S.C. 415. The provisions of this section shall not prevent the member receiving benefits from the funds created by KRS 16.568, 61.663, and 78.652.

Section 4. Participation in Other Qualified Plans: Aggregation of Limits. The 415(b) limit with respect to any member who at any time has been a member in any other defined benefit plan as defined in 26 U.S.C. 414(j) maintained by the member's employer in a Kentucky Retirement Systems or County Employees Retirement System plan shall apply as if the total benefits payable under all those defined benefit plans in which the member has been a member were payable from one (1) plan.

Section 5. The 415(c) limit with respect to any member who at any time has been a member in any other defined contribution plan as defined in 26 U.S.C. 414(i) maintained by a participating employer shall apply as if the total annual additions under all those defined contribution plans in which the member has been a member were payable from one (1) plan.

Section 6. Basic 415(b) Limitation. On and after January 1, 1995, a member shall not receive an annual benefit that exceeds the dollar amount established in 26 U.S.C. 415(b)(1)(A), subject to the applicable adjustments established in 26 U.S.C. 415(b) and subject to any additional limits established in this section. A member's annual benefit payable in any limitation year from a Kentucky Retirement Systems or County Employees Retirement System plan shall not be greater than the limit applicable on the annuity starting date, as increased in subsequent years pursuant to 26 U.S.C. 415(d) and 26 C.F.R. 1.415(d)-1.

Section 7. Annual Benefit.

(1) For purposes of 26 U.S.C. 415(b), the "annual benefit" is the benefit payable annually in the form of a straight life annuity with no ancillary benefits without regard to the benefit attributable to:

(a) After-tax employee contributions other than permissive service credit as defined by 26 U.S.C. 415(n); or

(b) Rollover contributions as defined by 26 U.S.C. 415(b)(2)(A).

(2) The "benefit attributable" shall be determined in accordance with 26 C.F.R. 1.415(b)-1(b)(2).

Section 8. Adjustments to Basic 415(b) Limitation for Form of Benefit.

(1) If the benefit under a Kentucky Retirement Systems or County Employees Retirement System plan is other than the form specified in Section 6 of this administrative regulation, then the benefit shall be adjusted so that it is the equivalent of the annual benefit, using factors established in 26 C.F.R. 1.415(b)-1(c).

(2) If the form of benefit without regard to the automatic benefit increase feature is not a straight life annuity or a qualified joint and survivor annuity, then subsection (1) of this section shall be applied by either reducing the section 415(b) limit applicable at the annuity starting date or adjusting the form of benefit to an actuarially equivalent amount using the assumptions established in Treasury Regulation Section 1.415(b)-1(c)(2)(ii) that take into account the additional benefits under the form of benefit as established in this subsection.

(a) For a benefit paid in a form to which 26 U.S.C. 417(e)(3) does not apply a monthly benefit, the actuarially equivalent straight life annuity benefit that is the greater of, or the reduced 415(b) limit applicable at the annuity starting date which is the "lesser of" when adjusted in accordance with the assumptions established in subparagraphs 1 and 2 of this paragraph.

1. The annual amount of the straight life annuity payable to the member under the Kentucky Retirement Systems or County Employees Retirement Systems plan commencing on the same annuity starting date as the form of benefit to the member; or

2. The annual amount of the straight life annuity commencing on the same annuity starting date that has the same actuarial present value as the form of benefit payable to the member, computed using a five (5) percent statutory interest assumption established in 26 U.S.C. 415(b)(2) E)(i); and009 the applicable mortality tables established in 26 U.S.C. 417(e)(3)(B); or

(b) For a benefit paid in a form to which 26 U.S.C. 417(e)(3) applies, the actuarially equivalent straight life annuity benefit that is the greatest of, or the reduced 415(b) limit applicable at the annuity starting date which is the "least of" when adjusted in accordance with the assumptions established in subparagraphs 1 through 3 of this paragraph.

1. The annual amount of the straight life annuity commencing on the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using the interest rate and mortality table, or tabular factor, established in the Kentucky Retirement Systems or County Employees Retirement System plan for actuarial experience;

2. The annual amount of the straight life annuity commencing on the annuity starting date that has the same actuarial present value as the particular form of benefit payable, computed using a five and one-half (5.5) percent statutory interest assumption established in 26 U.S.C. 415(b)(E)(ii)(I) and the009 mortality tables established in 26 U.S.C. 417(e)(3)(B); or

3. The annual amount of the straight life annuity commencing on the annuity starting date that has the same actuarial present value as the particular form of benefit payable using the applicable interest rate for the distribution established in 26 C.F.R. 1.417(e)-1(d)(3) in effect for the first day of the plan year with a one (1) year stabilization period and009 the applicable mortality tables established in 26 U.S.C. 417(e)(3)(B) divided by 1.05.

Section 9. Benefits Not Taken into Account for 415(b) Limit. For purposes of this administrative regulation, the following benefits shall not be taken into account in applying these limits:

(1) Any ancillary benefit that is not directly related to retirement income benefits;

(2) That portion of any joint and survivor annuity that constitutes a qualified joint and survivor annuity pursuant to 26 U.S.C. 415(b)(2)(g); and

(3) Any other benefit not required under 26 U.S.C. 415(b)(2) and 26 C.F.R. 1.415(b)-1 to be taken into account for purposes of the limitation of 26 U.S.C. 415(b)(1).

Section 10. Other Adjustments in 415(b) Limitation.

(1) If the member's retirement benefits become payable before age sixty-two (62), the limit established in this section shall be reduced in accordance with 26 C.F.R. 1.415(b)-1(d), so that the reduced limit equals an annual straight life benefit when the retirement income benefit begins, which is equivalent to an adjusted $160,000 annual benefit beginning at age sixty-two (62).

(2) If the member's benefit is based on at least fifteen (15) years of service as a full-time employee of any police or fire department or on fifteen (15) years of military service, the adjustments established in subsection (1) of this section shall not apply.

(3) The reductions established in subsection (1) of this section shall not apply to preretirement disability benefits or preretirement death benefits.

Section 11. Less than Ten (10) Years of Participation.

(1) The maximum retirement benefits payable to any member who has completed less than ten (10) years of participation in a system shall be the amount determined under Section 6 of this administrative regulation as adjusted under Sections 8 or 10 of this administrative regulation multiplied by a fraction, the numerator of which is the number of the member's years of service and the denominator of which is ten (10).

(2) The reduction established in this section shall not:

(a) Reduce the maximum benefit below ten (10) percent of the limit determined without regard to this section; or

(b) Apply to preretirement disability benefits or preretirement death benefits.

Section 12. $10,000 Limit Less than Ten (10) Years of Service.

(1) Notwithstanding any provision of this administrative regulation to the contrary, the retirement benefit payable shall be deemed not to exceed the limit established in this section if the benefits payable under a Kentucky Retirement Systems or County Employee Retirement System plan and under all other qualified defined benefit pension plans to which the member's employer contributes:

(a) Do not exceed $10,000 for the applicable limitation year and for any prior limitation year; and

(b) The employer has not at any time maintained a qualified defined contribution plan in which the member participated.

(2) If the member has completed less than ten (10) years of service with the employer, the limit under this section shall be a reduced limit equal to $10,000 multiplied by a fraction, the numerator of which is the number of years of service the member has and the denominator of which is ten (10).

Section 13. Effect of COLA without a Lump Sum Component on 415(b) Testing. On and after January 1, 2003, for purposes of applying the 415(b) limit to a member with no lump sum benefit:

(1) A member's 415(b) limit shall be applied to the member's annual benefit in the member's first limitation year without regard to any automatic cost of living adjustments;

(2) To the extent that the member's annual benefit equals or exceeds the limit, the member shall not be eligible for cost of living increases from the funds created by KRS 16.510, 61.515, 78.520, until the benefit added to the accumulated increases are less than the 415(b) limit; and

(3) In any subsequent limitation year, a member's annual benefit, including any automatic cost of living increases, shall be tested under the current 415(b) limit including any adjustment to the 26 U.S.C. 415(b)(1)(A) dollar limit under 26 U.S.C. 415(d), and 26 C.F.R. 1.415(b)-1(d).

Section 14. Effect of COLA with a Lump Sum Component on 415(b) Testing. On and after January 1, 2009, with respect to a member who receives a portion of his or her annual benefit in a lump sum, the limit shall be applied taking into consideration cost of living increases as required by 26 U.S.C. 415(b) and 26 C.F.R. 1.415(b)-1.

Section 15. 415(c) Limit. After-tax member contributions or other annual additions with respect to a member shall not exceed the lesser of $40,000, as adjusted pursuant to 26 U.S.C. 415(d), or 100 percent of the member's compensation.

(1) For purposes of applying the 415(c) limits only, compensation shall be compensation actually paid or made available during a limitation year, except as established in subsection (3) of this section and as permitted by Treasury Regulation Section 1.415(c)-2, except that member contributions picked up under 26 U.S.C. 414(h) shall not be treated as compensation.

(2)

(a) Unless another definition of compensation that is permitted by Treasury Regulation Section 1.415(c)-2 is specified by a Kentucky Retirement Systems or County Employees Retirement System plan, compensation shall be:

1. Wages as defined by 26 U.S.C. 3401(a);

2. All other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement under 26 U.S.C. 6041(d), 6051(a)(3), and 6052; and

3. Determined without regard to any rules under 26 U.S.C. 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed, including the exception for agricultural labor in 26 U.S.C. 3401(a)(2).

(b) For limitation years beginning on and after January 1, 1998, compensation shall also include amounts that would otherwise be included in compensation but for an election under 26 U.S.C. 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).

(c) For limitation years beginning on and after January 1, 2001, compensation shall also include any elective amounts that are not includible in the gross income of the employee by reason of 26 U.S.C. 132(f)(4).

(d) For limitation years beginning on and after January 1, 2009, compensation shall also include compensation paid by the later of two and one-half (2 1/2) months after an employee's severance from employment or the end of the limitation year that includes the date of the employee's severance from employment if:

1. The payment is:

a. Regular compensation for services during the employee's regular working hours;

b. Compensation for services outside the employee's regular working hours, including overtime or shift differential; or

c. Commissions, bonuses, or other similar payments; and

2. Absent a severance from employment, the employee would have been able to use the payments including unused accrued bona fide sick, vacation or other leave if employment had continued.

(e) Any payments not established in paragraph (d) of this subsection shall not be considered compensation if paid after severance from employment, even if they are paid within two and one half (2 1/2) months following severance from employment, except for payments to the individual who does not currently perform services for the employer by reason of qualified military service as established in 26 U.S.C. 414(u)(1) to the extent these payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the employer rather than entering qualified military service. An employee who is in qualified military service shall be treated as receiving compensation from the employer during the period of qualified military service equal to:

1. The compensation the employee would have received during the period if the employee were not in qualified military service, determined based on the rate of pay the employee would have received from the employer but for the absence during the period of qualified military service; or

2. If the compensation the employee would have received during the period was not reasonably certain, the employee's average compensation from the employer during the twelve (12) month period immediately preceding the qualified military service or, if shorter, the period of employment immediately preceding the qualified military service.

(f) Back pay, as established in 26 C.F.R. 1.415(c)-2(g)(8), shall be treated as compensation for the limitation year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.

Section 16. Service Purchases Under Section 415(n).

(1) Beginning after December 31, 1997, if a member makes one (1) or more contributions to purchase permissive service credit under a Kentucky Retirement Systems or County Employees Retirement System plan, the requirements of 26 U.S.C. 415(n) shall be treated as met only if determined by treating:

(a) The accrued benefit derived from all these contributions as an annual benefit for purposes of the 415(b) limit; or

(b) All of the contributions made pursuant to this subsection as annual additions for purposes of the 415(c) limit.

(2) For purposes of applying this section, a Kentucky Retirement Systems or County Employees Retirement System plan shall not fail to meet solely by reason of this section the:

(a) Reduced limit under 26 U.S.C. 415(b)(2)(C); and

(b) Percentage limitation under 26 U.S.C. 415(c)(1)(B).

(3)

(a) For purposes of this section the term "permissive service credit" shall mean service credit:

1. Recognized by a Kentucky Retirement Systems or County Employees Retirement System plan for purposes of calculating a member's benefit under a Kentucky Retirement Systems or County Employees Retirement System plan;

2. That the member has not received under a Kentucky Retirement Systems or County Employees Retirement System plan; and

3. That the member may receive only by making a voluntary additional contribution, in an amount determined under a Kentucky Retirement Systems or County Employees Retirement System plan, which does not exceed the amount necessary to fund the benefit attributable to the service credit.

(b) Permissive service credit contributions made in limitation years beginning after December 31, 1997 may include service credit for periods for which there is no performance of service, and, notwithstanding paragraph (a)2 of this subsection, may include service credited to provide an increased benefit for service credit which a member is receiving under a Kentucky Retirement Systems or County Employees Retirement System plan.

(4) The Kentucky Retirement Systems or County Employees Retirement System plan shall fail to meet the requirements of this section if:

(a) More than five (5) years of nonqualified service credit are taken into account for purposes of this section; or

(b) Any nonqualified service credit is taken into account under this section before the member has at least five (5) years of participation under a Kentucky Retirement Systems or County Employees Retirement System plan.

(5) For purposes of subsection (4) of this section, for permissive service credit contributions made in limitation years beginning after December 31, 1997, "nonqualified service credit" shall be permissive service credit other than that allowed with respect to:

(a) Service as an employee of the Government of the United States, any state or political subdivision thereof, or any agency or instrumentality of any of the foregoing other than military service or service for credit which was obtained as a result of a repayment described in 26 U.S.C. 415(k)(3);

(b) Service as an employee other than that established in paragraph (a) of this subsection of an education organization established in 26 U.S.C. 170(b)(1)(A)(ii) which is a public, private, or sectarian school which provides elementary, secondary through grade twelve (12), or a comparable level of education, pursuant to the applicable law of the jurisdiction in which the service was performed;

(c) Service as an employee of an association of employees as established in paragraph (a) of this subsection; or

(d) Military service other than qualified military service under 26 U.S.C. 414(u) recognized by the Kentucky Retirement Systems or County Employees Retirement System plan.

(6) Service established in subsection (5)(a), (b), or (c) of this section shall be nonqualified service if recognition of the service would cause a member to receive a retirement benefit for the same service under more than one plan.

(7) For a trustee-to-trustee transfer after December 31, 2001, to which 26 U.S.C. 403(b)(13)(A) or 457(e)(17)(A) applies without regard to whether the transfer is made between plans maintained by the same employer, the:

(a) Limitations of subsection (4) of this section shall not apply in determining whether the transfer is for the purchase of permissive service credit; and

(b) Distribution rules applicable under federal law to a Kentucky Retirement Systems or County Employees Retirement System plan shall apply to these amounts and any benefits attributable to these amounts.

(8) For individuals who began membership in a Kentucky Retirement Systems or County Employees Retirement System plan before January 1, 1998, the 415(c) limit shall not be applied to reduce the amount of permissive service credit which may be purchased to an amount less than the amount which was allowed to be purchased under the terms of a Kentucky Retirement Systems or County Employees Retirement System plan as in effect on August 5, 1997.

Section 17. Modification of Contributions for 415(c) and 415(n) Purposes. The agency may modify a request by a member to make a contribution to a Kentucky Retirement Systems or County Employees Retirement System plan if the amount of the contribution would exceed the limits provided in Section 415 by using the methods established in this section

(1) If the law requires a lump sum payment for the purchase of service credit, the agency may establish a periodic payment plan for the member to avoid a contribution in excess of the limits under 26 U.S.C. 415(c) or 415(n).

(2) If payment pursuant to subsection (1) of this section will not avoid a contribution in excess of the limits imposed by 26 U.S.C. 415(c) or 415(n), the agency may either reduce the member's contribution to an amount within the limits of those sections or refuse the member's contribution.

Section 18. Repayments of Cashouts. Any service purchase pursuant to KRS 61.552(3) of repayment of contributions, including interest, is a repayment of a cashout under 26 U.S.C. 415(k)(3) and shall not be taken into account for purposes of the 415(b) or (c) limits.

History

• RELATES TO: KRS 16.505, 16.568, 61.505, 61.510, 61.552, 61.663, 78.510, 78.652, 26 U.S.C., 125, 3401, 402, 415, 417, 457, 6041, 6051
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority on behalf of Kentucky Retirement Systems and County Employees Retirement System to promulgate administrative regulations necessary or proper in order to carry out the provisions of KRS 61.510 to 61.705, 16.505 to 16.652, and 78.510 to 78.852 and to conform to federal statutes and regulations. 26 U.S.C. 415(c) limits post-tax contributions by a member. This administrative regulation concerns the administration of testing contribution and benefit limits in accordance with 26 U.S.C. Section 415.
• History: 105 KAR 001:400. 35 Ky.R. 1096; Am. 1723; eff. 2-6-2009; 39 Ky.R. 68; 750; eff.10-24-2012; TAm eff. 6-11-2019; Crt eff. 6-11-2019; Crt eff. 6-11-2026; 52 Ky.R. 1388, 1802; eff. 8-4-2026; Recodified to 105 KAR 002:400; eff. 8-5-2026.

105 KAR 2:420 401(h) account established under 26 U.S.C. 401(h) {#sec-105-kar-2-420 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:420}

Section 1. Definitions.

(1) "Dependent" is defined by the Internal Revenue Code, 26 U.S.C. 152, excluding subsections (b)(1), (b)(2), and (d)(1)(B).

(2) "Medical expense" means expense for medical care as defined by 26 U.S.C. Section 213(e)(1) of the Internal Revenue Code.

(3) "Retired", for purposes of eligibility to receive the medical benefits described in 26 U.S.C. 401(h), means:

(a) An employee is eligible to receive benefits under the Kentucky Retirement Systems;

(b) The employee is not still employed by the employer; and

(c) A separation from employment has occurred.

(4) "Systems" means the retirement systems administered by Kentucky Retirement Systems.

Section 2. The purpose of the 401(h) account established under 26 U.S.C. 401(h) in each of the systems shall be to pay part of the subsidy for health benefits that are otherwise payable from the health insurance fund. The 401(h) account shall be used only to the extent that funds are not available from the health insurance fund.

Section 3. The one (1) percent mandatory contribution established by KRS 61.702(2)(b) shall be deposited in the separate account of each system trust fund, respectively. These contributions are reasonable to pay medical expenses as required by 26 C.F.R. 1.401-14(c)(3).

Section 4. The health benefits shall be subordinate to the retirement benefits provided by the systems. (No life insurance protection is provided by any system.) This requirement shall not be satisfied unless the actual contributions to the 401(h) accounts established under 26 U.S.C. 401(h) do not exceed twenty-five (25) percent of the total actual contributions to the systems (other than contributions to fund past service credits), determined on an aggregate basis since the inception of the 401(h) accounts established under 26 U.S.C. 401(h).

Section 5. Amounts in the 401(h) accounts established under 26 U.S.C. 401(h) shall be for the exclusive purpose of paying medical expenses for retirees, their spouses, and dependents. Amounts in the 401(h) accounts established under 26 U.S.C. shall not be diverted for other purposes.

Section 6. Any amounts in the 401(h) accounts established under 26 U.S.C. 401(h) shall revert to the employers upon satisfaction of all liabilities for medical benefits.

Section 7. Employees shall not have an individual interest in the 401(h) accounts established under 26 U.S.C. 401(h).

Section 8. The 401(h) accounts established under 26 U.S.C. 401(h) may be commingled with the pension assets of the trust funds for investment purposes. Investment earnings shall be credited to the 401(h) accounts established under 26 U.S.C. 401(h) on a reasonable basis.

Section 9. Administrative and other expenses shall be charged to the 401(h) accounts established under 26 U.S.C. 401(h) on a reasonable basis.

History

• RELATES TO: KRS 61.701, 61.702, 61.645(9)(e)
• STATUTORY AUTHORITY: KRS 61.702, 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Board of Trustees of Kentucky Retirement Systems to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 61.510 to 61.705, 16.505 to 16.652, and 78.510 to 78.852 and to conform to federal statutes and regulations. Pursuant to the provisions of KRS 61.702(2)(b)(5), as amended by 2008 Extra Sess. Ky. Acts ch. 1, sec. 24 and of KRS 61.645, this administrative regulation establishes, effective September 1, 2008, a separate 401(h) account under 26 U.S.C. 401(h) within each of the following: the Kentucky Employees Retirement System Trust Fund, the State Police Retirement System Trust Fund, and the County Employees Retirement Trust Fund.
• History: 105 KAR 001:420. 35 Ky.R. 979; Am. 1729; eff. 2-6-2009; 39 Ky.R. 72; 753; 10-24-2012; Crt eff. 1-27-2020; TAm eff. 1-27-2020; Recodified to 105 KAR 002:420; eff. 8-5-2026.

105 KAR 2:430 General compliance with federal tax laws {#sec-105-kar-2-430 omnilex-key=us-ky-regs-official--title-105--105 KAR 2:430}

Section 1. Compliance with 26 U.S.C. 401(a)(7) and 401(a)(8) for Vesting and Forfeitures.

(1) A plan member shall be 100 percent vested in the member's accumulated contributions at all times.

(2) In conformity with 26 U.S.C. 401(a)(8), any forfeitures of benefits by members or former members of the plan shall:

(a) Not be used to pay benefit increases; and

(b) Be used to reduce employer contributions.

(3) Upon termination or partial termination of an affected retirement system, or the complete discontinuance of contributions, a member shall have a nonforfeitable interest in their accrued benefit to the extent funded except as provided by KRS 16.652, 61.692, and 78.852.

Section 2. Compliance with 26 U.S.C. 414(p) for Qualified Domestic Relations Orders. If benefits are payable pursuant to a qualified domestic relations order that meets the requirements of a domestic relations order as defined in 26 U.S.C. 414(p), then the agency shall follow the applicable requirements of 26 U.S.C. 414(p).

Section 3. Compliance with 26 U.S.C. 134, 401(a)(37, and 414(u) for Reemployed Veterans.

(1) Effective December 12, 1994, notwithstanding any other provision of the retirement system law; contributions, benefits, and service credit with respect to qualified military service shall be governed by 26 U.S.C. 414(u), the Uniformed Services Employment and Reemployment Rights Act of 1994, and the Heroes Earnings Assistance and Relief Tax Act of 2008.

(2) For deaths on or after January 1, 2007 that occur while a member is performing qualified military service as defined by 38 U.S.C. 43, to the extent required by 26 U.S.C. 401(a)(37), survivors of a member in a state or local retirement or pension system shall be entitled to any additional benefits that the system would provide if the member had resumed employment and then died, including accelerated vesting or survivor benefits that are contingent on the member's qualified military service shall be counted for vesting purposes.

(3) Beginning January 1, 2009, to the extent required by 26 U.S.C. 414(u)(12), an individual receiving differential wage payments as defined in 26 U.S.C. 3401(h)(2) from an employer shall be treated as employed by that employer, and the differential wage payment shall be treated as compensation for purposes of applying the limits on annual additions under 26 U.S.C. 415(c). This provision shall be applied to all similarly situated individuals in a reasonably equivalent manner.

Section 4. Compliance with 26 U.S.C. 503(b) for Prohibited Transactions. Effective as of July 1, 1989, the board shall not engage in a transaction prohibited by 26 U.S.C. 503(b).

Section 5. Compliance with 26 U.S.C. 401(a)(25) for Actuarial Assumptions.

(1) Kentucky Public Pensions Authority shall determine the amount of any benefit that is determined on the basis of actuarial assumptions using assumptions adopted by the board by rule; and

(2) Benefits established in this section shall not be subject to employer discretion.

Section 6.

(1) In addition to any other vesting provisions under state law, except as provided in KRS 61.535 and 78.540, the normal retirement benefit of a member with nonhazardous service in the Kentucky Employees Retirement System or the County Employees Retirement System shall be nonforfeitable upon the later of:

(a) Attaining the normal retirement age of age sixty-five (65) years;

(b) For a member whose membership date is on or before August 31, 2008, the completion of four (4) years of service; or

(c) For a member whose membership date is on or after September 1, 2008, five (5) years of service earned pursuant to KRS 16.543(1), 61.543(1), or 78.615(1).

(2) In addition to any other vesting provisions under state law, except as provided in KRS 61.535 and 78.540, the normal retirement benefit of a member of the State Police Retirement System and a member with hazardous service in the Kentucky Employees Retirement System or the County Employees Retirement System shall be nonforfeitable upon the later of:

(a) For a member whose membership date is on or before August 31, 2008:

1. Attaining the normal retirement age of fifty-five (55) years; or

2. The completion of five (5) years of service; or

(b) For a member whose membership date is on or after September 1, 2008:

1. Attaining the normal retirement age of sixty (60) years; or

2. The completion of five (5) years of service earned pursuant to KRS 16.543(1), 61.543(1), or 78.615(1).

History

• RELATES TO: KRS 16.505-16.652, 61.510-61.705, 78.510-78.852, 26 U.S.C. 134, 401(a)(7), (8), (25), 414(d),(p),(u), 503(b)
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.645(9)(e), 78.782(9)(d)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority on behalf of Kentucky Retirement Systems and County Employees Retirement System to promulgate administrative regulations that are consistent with and necessary or proper to carry out the provisions of KRS 16.505 to 16.652, 61.505 to 61.705, and 78.510 to 78.852. KRS 61.645(9)(e) and 78.782(9)(d) require the provisions of KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852 to conform with federal statutes and regulations and meet the qualification requirements under 26 U.S.C. 401(a). This administrative regulation establishes County Employees Retirement System and Kentucky Retirement Systems' compliance with 26 U.S.C. 134, 401(a), 414, and 503(b) in order for Kentucky Employees Retirement System, State Police Retirement System, and County Employees Retirement System to maintain their tax qualified status as public defined benefits plans.
• History: 105 KAR 001:430. 35 Ky.R. 980; 1730; eff. 2-6-2009; 39 Ky.R. 74; 753; 10-24-2012; Crt eff. 6-28-2019; Crt eff. 6-12-2026; 52 Ky.R. 1393; eff. 8-4-2026; Recodified to 105 KAR 002:430; eff. 8-5-2026.

Chapter 3 Disability and Survivorship

105 KAR 3:180 Death before retirement procedures {#sec-105-kar-3-180 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:180}

Section 1.

(1) After learning of the death of a member prior to retirement, the retirement system shall contact the named beneficiary or estate of the deceased member.

(2) The retirement system shall require completion of:

(a) Form 6810, Certification of Beneficiary, if the beneficiary is eligible for monthly payments; or

(b) Form 6825, Refund of Deceased Member's Account, if the beneficiary is eligible only for a refund of the member's account.

Section 2. The following information shall be required before benefits shall be paid:

(1) A copy of the death certificate for the member;

(2) If a beneficiary is deceased, a copy of the death certificate for the beneficiary;

(3)

(a) If a beneficiary or dependent child is a minor, a copy of the minor's birth verification, and a Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the minor child has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor, the guardian or conservator shall submit a copy of the court order appointing the guardian or conservator; and

(b) If benefits are payable to dependent children as defined in KRS 16.505(17), the parent or guardian shall provide:

1. A completed Form 6456, Designation of Dependent Child;

2. If applicable, for each child age eighteen (18) years or over, verification of full-time student status, which shall be filed with the retirement office for each semester of study within thirty (30) days following the start and within thirty (30) days following the end of each semester; and

3. If applicable, notice of:

a. The death of a dependent child;

b. The marriage of a dependent child; or

c. A dependent child over the age of eighteen (18) years who ceases to be a full-time student.

(4) If the beneficiary is the surviving spouse of the deceased member and the spouse elects a direct rollover or direct payment of an actuarial refund, refund of contributions, or sixty (60) months certain option, a Form 6025, Direct Rollover/Direct Payment Election Form for a Member or a Spouse Beneficiary of an Eligible Rollover Distribution;

(5) If the beneficiary is not the surviving spouse of the deceased member and the nonspouse beneficiary elects a direct rollover or direct payment of an actuarial refund, refund of contributions, or sixty (60) months certain option, a Form 6026, Direct Rollover/Direct Payment Election Form for a Non-spouse Beneficiary of an Eligible Rollover Distribution;

(6) If a beneficiary is divorced from the member, a copy of the divorce decree;

(7) If monthly benefits are available to the beneficiary, copies of the birth verifications of the member and the beneficiary; and

(8) If an estate is beneficiary, a copy of the court order appointing the executor, administrator, or personal representative of the estate, or the court order dispensing with formal administration of the estate.

Section 3. If the death certificate shows the cause of death to be homicide or the subject of a pending investigation, the retirement office may require additional evidence relating to the cause of death or investigations and arrests by law enforcement agencies and may delay benefits until the cause of death is fully explained.

Section 4.

(1) Upon receipt of the death certificate and other applicable documents, the retirement office shall provide to the beneficiary the monthly payment options available on the Form 6010, Estimated Retirement Allowance.

(2)

(a) If multiple beneficiaries are named, the retirement system shall provide the Form 6010, Estimated Retirement Allowance, to the first named beneficiary on the member's beneficiary designation form.

(b) The additional beneficiaries shall be provided a Form 6011, Retirement Monthly Payment Options.

(c) The first named beneficiary shall be responsible for obtaining the signatures of the multiple beneficiaries on the Form 6010, Estimated Retirement Allowance, and returning the completed Form 6010, Estimated Retirement Allowance, to the retirement office.

(d) The multiple beneficiaries shall return all necessary documents, shall select the same payment option, and sign and return the Form 6010, Estimated Retirement Allowance. The Form 6010, Estimated Retirement Allowance, shall be returned to the retirement system before benefit payments commence.

(3) Upon receipt of Form 6825, Refund of Deceased Member's Account, and other applicable beneficiary documents, the retirement system shall process a refund of the member's accumulated contributions and interest to the beneficiary.

(4) If the member died in the same month as the member's effective retirement date but before the first retirement allowance payment has been issued by the State Treasurer, the beneficiary shall also be offered the benefits payable to a beneficiary pursuant to the option the member selected.

Section 5. A payment shall not be made until all information, documents, and forms required by the retirement system are received.

Section 6. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6810, "Certification of Beneficiary", 5/08;

(b) Form 6010, "Estimated Retirement Allowance", 7/04;

(c) Form 6110, "Affidavit of Authorization to Receive Funds on Behalf of Minor", 5/03;

(d) Form 6456, "Designation of Dependent Child", 7/04;

(e) Form 6825, "Refund of Deceased Member's Account", 5/08;

(f) Form 6011, "Retirement Monthly Payment Options", 7/02);

(g) Form 6025, "Direct Rollover/Direct Payment Election Form for a Member or a Spouse Beneficiary of an Eligible Rollover Distribution", 5/08; and

(h) Form 6026, "Direct Rollover/Direct Payment Election Form for a Non-Spouse Beneficiary of an Eligible Rollover Distribution", 5/08.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

• RELATES TO: KRS 16.578, 16.601, 61.640, 78.545
• STATUTORY AUTHORITY: KRS 16.578, 61.640, 61.645(9)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(g) authorizes the Board of Trustees of Kentucky Retirement Systems to promulgate administrative regulations necessary to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. KRS 61.645(9)(g) authorizes the Board of Trustees of Kentucky Retirement Systems to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. KRS 16.578, 16.601 and 61.640 provide for the payment of certain benefits upon the death of a member prior to retirement. This administrative regulation establishes the procedures for issuance of benefits if death occurs prior to retirement.
• History: 105 KAR 001:180. 18 Ky.R. 928; eff. 11-8-91; Am. 19 Ky.R. 967; 1337; eff. 12-9-92; 21 Ky.R. 1520; eff. 2-8-95; 27 Ky.R. 1046; 1442; eff. 12-21-2000; 29 Ky.R. 764; 1248; eff. 11-12-02; 34 Ky.R. 115; 541; eff. 10-5-2007; 35 Ky.R. 105; eff. 10-3-08; Crt eff. 1-29-2020; Recodified to 105 KAR 003:180; eff. 8-5-2026.

105 KAR 3:210 Disability procedures {#sec-105-kar-3-210 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:210}

Section 1. Definitions.

(1) Unless otherwise defined in this section, the definitions contained in KRS 16.505, 61.510, and 78.510 shall apply to this administrative regulation .

(2) Prior to April 1, 2021, "agency" means the Kentucky Retirement Systems, which administers the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System. Effective April 1, 2021, "agency" means the Kentucky Public Pension Authority, which is authorized to carry out the day-to-day administrative needs of the Kentucky Retirement Systems (comprised of the State Police Retirement System and the Kentucky Employees Retirement System) and the County Employees Retirement System.

(3) "Applicant" means a member or retired member of the State Police Retirement System, the Kentucky Employees Retirement System, or the County Employees Retirement System (or a member or retired member of multiple Systems) who has applied or is applying for disability retirement benefits in accordance with KRS 16.582, 78.5524, 61.600, 78.5522, 61.665, and 78.545.

(4) Prior to April 1, 2021, "DAC" means the Disability Appeals Committee of the Board of Trustees of the Kentucky Retirement Systems. Effective April 1, 2021, "DAC" means the separate or joint Disability Appeals Committees of the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System in accordance with KRS 61.665(4) and 78.545.

(5) "File" means delivering or submitting a form or other documents to the retirement office, unless otherwise stated by mail, fax, in-person delivery, secure email, or upload via Self Service on the Web site maintained by the agency (if available). A form or other document is not filed until it has been received at the retirement office.

(6) "Invalid" means that the form is deficient and not to be accepted or processed by the agency.

(7) "Participating employers" means employers participating in the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System.

(8) "Provide" means the agency makes a form available to a member, retired member, or beneficiary by: mail, fax, secure email, or upload via Self Service on the Web site maintained by the agency (if available).

(9) "Recipient" means a retired member of the State Police Retirement System, the Kentucky Employees Retirement System, or the County Employees Retirement System (or a retired member of multiple Systems) who is receiving disability retirement benefits in accordance with KRS 16.582, 78.5524, 61.600, 78.5522, 61.665, and 78.545.

(10) " Systems" means the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System.

(11) "Valid" means that all required sections on a form are completed and all required signatures on a form are executed.

Section 2. Use of Third-party Vendors.

(1) The agency may contract with third-party vendors to act on its behalf throughout the disability retirement application and review process. The agency may also contract with third-party vendors to act on its behalf throughout the periodic review, reinstatement review, and employment review processes.

(2) The agency may utilize independent, licensed physicians provided by third-party vendors to serve as medical examiners pursuant to KRS 61.665 and 78.545. Third-party vendors may provide additional persons to fulfill non-physician roles throughout the disability retirement application process.

(3) Third-party vendors may act on behalf of the agency and the systems with all the rights and responsibilities therein.[

Section 3. Filing an Application or Reapplication for Disability Retirement Benefits.

(1) An application for disability retirement benefits or a reapplication for disability retirement benefits shall be made on the Form 6000, Notification of Retirement.

(2)

(a)

1. A reapplication for disability retirement benefits based on the same claim of incapacity shall be accompanied by new objective medical evidence not previously considered with prior applications.

2. An applicant shall have 180 days from the date the reapplication for disability retirement benefits based on the same claim of incapacity is on file at the retirement office in which to file new objective medical evidence not previously considered with prior applications.

3. If the last day of the period described in subparagraph 2. of this paragraph is a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the deadline shall be satisfied if the required forms, certification, information, or request are on file at the retirement office by the close of the next business day.

4. A reapplication for disability retirement benefits based on the same claim of incapacity that is accompanied by new objective medical evidence shall be reviewed in conjunction with the objective medical evidence, forms, and information filed with all previous applications.

(b) A reapplication for disability retirement benefits based on the same claim of incapacity that is unaccompanied by new objective medical evidence that was not considered with previous applications within 180 days of filing of the reapplication shall be invalid and shall not be accepted or considered by the agency.

(3) A reapplication for disability retirement benefits that is filed subsequent to a prior application for disability retirement benefits and is based on an entirely different claim of incapacity shall be treated in the same manner as a reapplication for disability retirement benefits based on the same claim of incapacity under subsection (2) of this section.

(4)

(a) Pursuant to KRS 16.582, 78.5524, 61.600, and 78.5522, the twenty-four (24) month period after the applicant's last day of paid employment during which the applicant shall have a valid application on file at the retirement office shall consist of 730 calendar days.

(b) If the 730th day is on a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the application shall be timely if filed at the retirement office by the close of the next business day.

(c) If a valid application or reapplication for disability retirement benefits is not on file at the retirement office at the close of business on the 730th day, then the application or reapplication is not timely and the applicant is not qualified to retire on disability.

(d)

1. The applicant's last day of paid employment shall either be certified by the applicant's employer or filed by the applicant and corroborated by the reporting information received by the agency from the applicant's employer.

2. In accordance with KRS 61.685 and 78.545, the applicant's last day of paid employment may be corrected at any time upon discovery of any error or omission in the agency's records.

(5) An application or reapplication may be filed prior to the applicant's last day of paid employment but no earlier than six (6) months prior to the applicant's last day of paid employment.

Section 4. Forms Required with Disability Retirement Application or Reapplication.

(1) In addition to a valid application or reapplication for disability retirement benefits in accordance with Section 3 of this administrative regulation, the applicant shall file the following forms and information with the retirement office prior to review by the medical examiners under KRS 61.665 and 78.545:

(a) A valid Form 8035, Employee Job Description;

(b) A valid Form 8040, Prescription and Nonprescription Medications;

(c) Supporting medical information; and

(d) Once all supporting medical information has been submitted, a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information.

(2) The applicant's employer shall complete and submit to the retirement office a Form 8030, Employer Job Description, for all initial applications for disability retirement benefits.

(3) Both the applicant and the employer shall file information regarding the applicant's request for reasonable accommodations as required by KRS 61.665(2)(a), 61.665(2)(b), and 78.545.

(4) The applicant and the applicant's employer shall file or submit additional information regarding the applicant's job duties and reasonable accommodations upon request by the agency or a third-party vendor on its behalf.

(5) For a reapplication for disability retirement benefits, the applicant's employer shall complete and submit to the retirement office an updated Form 8030, Employer Job Description, and additional information on reasonable accommodations as described in subsection (3) of this section only if the applicant's job duties or the reasonable accommodation information have changed since the prior application.

(6) The agency or its contracted third-party vendor shall provide to the medical examiners the application or reapplication for disability retirement benefits and all forms and information listed in subsections (1) and (5) of this section upon submission of a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information.

(7)

(a) The 180 day period to file all necessary forms, certifications, and information under KRS 61.665(2)(a) and 78.545 and this section shall begin on the day the applicant's valid Form 6000, Notification of Retirement, that complies with Section 3 of this administrative regulation is on file at the retirement office and shall end at close of business on the last day of the prescribed time period.

(b) Pursuant to KRS 61.665(2)(f), 61.665(2)(h), 61.665(3)(a), and 78.545, the 180 day period to appeal the recommended denial of disability retirement benefits by two (2) or more of the three (3) medical examiners reviewing the objective medical evidence shall begin on the day the notification of the recommendation of the medical examiners is mailed by the agency, or a third-party vendor on its behalf, and shall end at close of business on the last day of the prescribed time period.

(c) If the last day of the period described in paragraphs (a) or (b) of this subsection is a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the deadline shall be satisfied if the forms, certification, information, appeals, or requests required by KRS 61.665 and 78.545 and this section are on file at the retirement office by the close of the next business day.

Section 5. Effect of Subsequent Disability Retirement Reapplication While a Prior Application or Reapplication is Still Pending.

(1) If a subsequent valid reapplication for disability retirement benefits that complies with Section 3 of this administrative regulation is filed at the retirement office while a prior application or reapplication is pending review by the medical examiners under KRS 61.665 and 78.545, then the subsequent reapplication shall be accepted solely for the purpose of designating a new beneficiary in accordance with KRS 61.542 and 78.545. The subsequent reapplication shall not be submitted for review by the medical examiners.

(2)

(a) If a subsequent valid reapplication for disability retirement benefits that complies with Section 3 of this administrative regulation is filed at the retirement office after an applicant has requested an administrative hearing to appeal the denial of an earlier application or reapplication for disability retirement benefits, but prior to a Final Order of DAC regarding the earlier application or reapplication, then the subsequently filed reapplication shall be found as a notice of intent to dismiss the request for administrative hearing unless the applicant simultaneously files a written statement that the subsequently filed reapplication has been filed solely for the purpose of designating a new beneficiary in accordance with KRS 61.542 and 78.545.

(b) A subsequently filed reapplication as described in paragraph (a) of this subsection shall not be processed by the agency until thirty-one (31) days after the entry of a Final Order of DAC dismissing the previously requested administrative appeal, except that a new beneficiary designated on the subsequently filed reapplication in accordance with KRS 61.542 and 78.545 shall be effective immediately.

(c) All evidentiary filings made during an administrative hearing process to appeal the denial of an earlier application or reapplication for disability retirement benefits shall be included in the information provided to the medical examiners for review of the subsequently filed reapplication.

(3)

(a)

1. If a subsequent valid reapplication for disability retirement benefits is filed at the retirement office after DAC has issued a Final Order denying a prior application or reapplication for disability retirement benefits and during the statutory time for appeal of the Final Order or after an appeal of the Final Order has been made, then the subsequently filed reapplication shall be accepted solely for the purpose of designating a new beneficiary in accordance with KRS 61.542 and 78.545.

2. The subsequent reapplication as described in subparagraph 1. of this paragraph shall not be submitted for review by the medical examiners, unless the applicant simultaneously files a written statement that the applicant shall not appeal the Final Order of DAC or has withdrawn any pending appeal of a Final Order of DAC.

(b) If a subsequent valid reapplication for disability retirement benefits is filed at the retirement office after DAC has issued a Final Order denying an application or reapplication for disability retirement benefits, all applicable statutory time for appeals of the Final Order have lapsed, and the reapplication complies with KRS 16.582, 78.5524, 61.600, 78.5522, and Section 3 of this administrative regulation, then the subsequently filed reapplication for disability retirement benefits shall be valid.

Section 6. Eligibility for Early or Normal Retirement Benefits at the Time of Application for Disability Retirement Benefits.

(1)

(a) If the applicant is eligible to receive early or normal retirement benefits when a valid Form 6000, Notification of Retirement, for disability retirement benefits that complies with Section 3 of this administrative regulation is filed at the retirement office, the agency shall treat a valid Form 6000, Notification of Retirement, as being an application for early or normal retirement benefits.

(b) If the applicant becomes eligible to receive early or normal retirement benefits while the application for disability retirement benefits is pending or an appeal of the denial of disability retirement benefits is pending, the agency shall treat a valid Form 6000, Notification of Retirement, of the applicant that complies with Section 3 of this administrative regulation as being an application for early or normal retirement benefits upon written request by the applicant filed at the retirement office.

(2) If the applicant has terminated employment from all participating employers and the applicant's Form 6000, Notification of Retirement, is an effective application for early or normal retirement benefits pursuant to subsection (1) of this section, the agency shall provide a Form 6010, Estimated Retirement Allowance, for early or normal retirement benefits to the applicant.

(3)

(a) An application for disability retirement benefits on the Form 6000, Notification of Retirement, that is an effective application for early retirement benefits pursuant to subsection (1) of this section shall not be affected if the applicant fails to have a valid Form 6010, Estimated Retirement Allowance, for early retirement benefits on file at the retirement office within six (6) months following termination from all employment with participating employers in accordance with KRS 61.590(5)(b) and 78.545, if the application for disability retirement benefits is still pending medical examiner review, administrative action, or judicial review.

(b) If the applicant has been provided with a Form 6010, Estimated Retirement Allowance, for early retirement benefits in accordance with subsection (2) of this section and the applicant does not have a valid Form 6010, Estimated Retirement Allowance, for early retirement benefits on file at the retirement office within six (6) months following termination from all employment with participating employers, then to receive early retirement benefits the applicant shall file a new Form 6000, Notification of Retirement, solely for early retirement benefits in accordance with KRS 61.590(5)(b) and 78.545.

(c) If the applicant is required to file a new valid Form 6000, Notification of Retirement, specifically for early retirement benefits as described in paragraph (b) of this subsection and designates a different beneficiary than designated on the original Form 6000, Notification of Retirement, for disability retirement benefits, then the beneficiary designation on the later Form 6000, Notification of Retirement, specifically for early retirement benefits shall supersede any prior beneficiary designation pursuant to KRS 61.542 and 78.545.

Section 7. Requests for Additional Objective Medical Evidence by the Medical Examiners.

(1) A medical examiner reviewing an application or reapplication for disability retirement benefits pursuant to KRS 61.665 and 78.545 may place their recommendation on hold and request additional objective medical evidence.

(2) If two (2) or more of the three (3) medical examiners reviewing an application or reapplication for disability retirement benefits place their recommendation on hold and request additional objective medical evidence, then the agency, or a third-party vendor, shall notify the applicant of the medical examiner's request for additional objective medical evidence. The applicant shall have sixty (60) days from the date of the notification to file the requested objective medical evidence along with a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information, to the retirement office.

(3) If there is no majority recommendation by the three (3) medical examiners reviewing an application or reapplication for disability retirement benefits because one (1) medical examiner recommends approval, one (1) medical examiner recommends denial, and one (1) medical examiner requests additional objective medical evidence, then the agency, or a third-party vendor, shall notify the applicant of the medical examiner's request for additional objective medical evidence. The applicant shall have sixty (60) days from the date of the notification to file the requested objective medical evidence along with a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information, to the retirement office.

(4)

(a) Upon receipt of the requested additional objective medical evidence with a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information, the agency, or a third-party vendor, shall resubmit the matter, including any additional objective medical evidence submitted in response to the medical examiner's request, to all three (3) medical examiners and the medical examiners shall issue new recommendations.

(b) Upon the expiration of sixty (60) days from the date of the notification, if no additional objective medical evidence with a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information, is on file at the retirement office, the agency, or a third-party vendor, shall resubmit the matter to only the medical examiner or examiners that placed their recommendation on hold and the medical examiner or examiners shall issue a new recommendation.

Section 8. Medical or Psychological Examination Required at the Expense of the Agency.

(1) If the agency requires an applicant to submit to a medical or psychological examination under KRS 61.665(2)(j) and 78.545 or KRS 61.665(3)(c) and 78.545, the agency shall reimburse the applicant for mileage from the applicant's home address as it is on file at the retirement office, to the place of the examination or evaluation, and returning to the applicant's home address on file at the retirement office. The applicant shall be reimbursed for the most direct route.

(2)

(a) The applicant shall complete and file a Form 8846, Travel Voucher for Independent Examination, indicating the mileage the applicant traveled from the applicant's home address as it is on file at the retirement office, to the place of the examination or evaluation, and returning to the applicant's home address on file at the retirement office. The applicant shall indicate any actual parking costs and any actual bridge or highway toll charges on the most direct route on the Form 8846, Travel Voucher for Independent Examination .

(b) The applicant shall file the Form 8846, Travel Voucher for Independent Examination and all necessary receipts at the retirement office within fifteen (15) days of the examination or evaluation to be reimbursed for mileage, actual parking costs, and any actual bridge or highway toll charges as described in subsections (3) through (6) of this section.

(3)

(a) Mileage shall be based on the MapQuest Web site, Google Maps Web site, the Kentucky Official Highway Map, as incorporated by reference in 200 KAR 2:006 or the most recent edition of the Rand McNally Road Atlas, as incorporated by reference in 200 KAR 2:006.

(b) The mileage certified by the applicant on the Form 8846, Travel Voucher for Independent Examination, shall not be greater than the mileage indicated by the MapQuest Web site, Google Maps Web site, the Kentucky Official Highway Map, or the most recent edition of the Rand McNally Road Atlas for the most direct route from applicant's home address as it is on file at the retirement office, to the place of the examination or evaluation, and returning to the applicant's home address on file at the retirement office.

(c) If the mileage certified by the applicant on the Form 8846, Travel Voucher for Independent Examination, is greater than the mileage indicated by the MapQuest Web site, Google Maps Web site, the Kentucky Official Highway Map, or the most recent edition of the Rand McNally Road Atlas for the most direct route, the agency shall pay the applicant the mileage indicated by the MapQuest Web site, Google Maps Web site, the Kentucky Official Highway Map, or the most recent edition of the Rand McNally Road Atlas for the most direct route.

(4) Reimbursement for use of a privately owned vehicle shall be made at the Internal Revenue Service established standard mileage rate applicable at the time of travel.

(5) Actual costs for parking shall be reimbursed upon submission of receipts.

(6) Actual bridge and highway toll charges shall be reimbursed if the bridge or highway is on the most direct route.

Section 9. Social Security and Workers' Compensation Benefits.

(1) The applicant shall notify the agency of his or her intent to apply for Workers' Compensation or disability benefits from the Social Security Administration.

(2) The applicant shall file information concerning his or her status with regard to receipt of Workers' Compensation and Social Security disability benefits at the retirement office.

(3) Upon receipt of approval for Workers' Compensation or disability benefits from the Social Security Administration, the applicant shall file at the retirement office a copy of the approval notice containing the amount of the award or payments. For Workers' Compensation settlements, the applicant shall file a copy of the settlement signed by the Administrative Law Judge.

(4) To determine the maximum benefit under KRS 61.607 and 78.5530, the following shall be added together:

(a) The applicant's gross monthly disability retirement allowance determined in accordance with KRS 61.605 and 78.5522 or 16.582 and 78.5522, excluding payments to dependent children and before any actuarial reduction for purposes of an optional retirement plan under KRS 61.635 and 78.545 or 16.576, converted to an annual amount.

(b) The applicant's total gross monthly benefit from Workers' Compensation excluding spouse or dependent benefits and allowances. If the applicant's benefit includes a lump sum payment or a payment for a period less than the applicant's lifetime, then an annualized benefit shall be determined as follows:

1. The gross amount of any lump sum payment shall be divided by the applicant's life expectancy, expressed in years, from the applicant's effective date of retirement.

2. The total gross amount of all payments paid for any period other than the applicant's lifetime shall be divided by the applicant's life expectancy, expressed in years, from the applicant's effective date of retirement.

3. The total determined in subparagraphs 1. and 2. of this paragraph shall be combined and added to the total gross annual amount of the applicant's lifetime benefit, if any.

(c) The applicant's gross monthly disability benefit from the Social Security Administration, excluding spouse or dependent benefits converted to an annual amount.

(5) If the projected combined monthly benefit exceeds 100 percent of the disabled employee's final rate of pay or final compensation, whichever is greater, the disability retirement allowance from the systems operated by the agency shall be reduced as follows:

(a) The difference shall be divided by twelve (12) and subtracted from the applicant's monthly retirement allowance determined in accordance with KRS 61.605 and 78.5522 or 16.582 and 78.5522, excluding payments to dependent children and before any actuarial reduction for purposes of an optional retirement plan under KRS 61.635 and 78.545 or 16.576.

(b) The actuarial reduction for the applicant's optional plan under KRS 61.635 and 78.545 or 16.576 shall be applied to determine the applicant's monthly retirement allowance. The reduction shall apply to all retirement allowances received since the date the combined benefits exceeded 100 percent of the higher of the applicant's final compensation or final rate of pay based on the effective dates of the individual benefits.

(6) The disability retirement allowance payable shall not be reduced below an amount that results from a computation of retirement allowance under early retirement or the disability retirement allowance from the systems operated by the agency using the applicant's actual total service, whichever is greater.

(7)

(a) Failure to respond to requests from the agency for information concerning a recipient's status with regard to receipt of Workers' Compensation and Social Security disability benefits may result in the agency putting the recipient's monthly benefit on hold.

(b) Monthly benefits held for failure to respond to a request for information concerning a recipient's status with regard to receipt of Workers' Compensation and Social Security disability benefits shall be paid to the recipient once the recipient files the requested information at the retirement office.

Section 10. Administrative Hearings Concerning the Denial of Disability Retirement Benefits.

(1)

(a) A request by the applicant for an administrative hearing to appeal the denial of disability retirement benefits under KRS 61.665 and 78.545 shall be made in writing and contain a short statement of the issues being appealed.

(b) An applicant's written request for an administrative hearing to appeal the denial of disability retirement benefits shall be filed at the retirement office. Email requests shall not be accepted.

(2) The hearing officer presiding over an administrative hearing may allow the applicant to introduce, among other evidence, the determination of other state and federal agencies, such as the Kentucky Department of Workers' Claims and the Social Security Administration, approving the applicant for benefits if accompanied by underlying objective medical evidence.

(3) The hearing officer presiding over an administrative hearing shall consider only objective medical evidence contained within the determination and shall not consider or be bound by vocational factors or factual or legal findings of other state or federal agencies.

(4) Statements by physicians within the administrative record of the application or reapplication for disability retirement benefits shall not be considered by themselves to be objective medical evidence unless accompanied by documented medical records or test results.

Section 11. Provisions Applicable to Applicants with Hazardous and Nonhazardous Service.

(1) The service added for determining the disability retirement allowance shall be determined under KRS 16.582 and 78.5524 if the applicant's last day of paid employment was in a hazardous position, or under KRS 61.605 and 78.5522 if the applicant's last day of paid employment was in a nonhazardous position.

(2) If the applicant has both hazardous and nonhazardous service in the same system, the added service shall be prorated between hazardous and nonhazardous service based on the proportion of service in each position to the whole, except that all of the added service shall be applied toward the nonhazardous retirement allowance if:

(a) The applicant is disabled from a hazardous position as a result of an act in line of duty; and

(b) Twenty-five (25) percent of the applicant's final rate of pay is greater than the hazardous disability retirement allowance determined using the prorated added service.

(3) If the applicant has service in more than one (1) system administered by the Kentucky Retirement Systems or the County Employees Retirement System, the added service shall be prorated between the systems based on the proportion of service in each system to the whole, except if the applicant is disabled from a hazardous position in one (1) system as a result of an act in line of duty and twenty-five (25) percent of the applicant's final rate of pay is greater than the hazardous disability retirement allowance determined using the prorated added service:

(a) All of the added service shall be applied toward the nonhazardous retirement system if the applicant is vested for disability retirement benefits from the nonhazardous system.

(b) All of the added service shall be applied toward the hazardous retirement system if the applicant is not vested for disability retirement benefits from the nonhazardous system.

Section 12. Back Payment of Enhanced Disability Retirement Allowance.

(1) If the applicant is awarded disability retirement benefits and did not receive early or normal retirement benefits, the agency shall pay the applicant the total monthly retirement allowance payable retroactive to the month following the month of the applicant's last day of paid employment .

(2)

(a) If the applicant received early or normal retirement benefits, the agency shall calculate and pay to the applicant the difference between the early or normal retirement benefit which was paid to the applicant and the disability retirement benefit.

(b) The applicant shall not change the beneficiary named or the payment option selected upon early or normal retirement, except as provided in KRS 61.542(5)(a), 61.542(5)(b), and 78.545.

Section 13. Direct Deposit or Payment by Check.

(1) A recipient shall complete a Form 6130, Authorization for Deposit of Retirement Payment, and file it at the retirement office, include direct deposit information on the Form 6000, Notification of Retirement, or authorize direct deposit via Self-Service on the Web site maintained by the agency to have the monthly retirement allowance deposited to an account in a financial institution.

(2) The recipient and the financial institution shall file the information and authorizations required for the electronic transfer of funds from the State Treasurer's office to the designated financial institution.

(3)

(a) At any time while receiving a retirement allowance, the recipient may change the designated institution by completing a new valid Form 6130, Authorization for Deposit of Retirement Payment, and filing the form at the retirement office, or by changing their direct deposit information via Self-Service on the Web site maintained by the agency.

(b) The latter of the designation on a valid Form 6000, Notification of Retirement, the last valid Form 6130, Authorization for Deposit of Retirement Payment, after the Form 6000 is on file at the retirement office, or the direct deposit information submitted via Self-Service on the Web site maintained by the Agency shall control the electronic transfer of the recipient's retirement allowance.

(4) The recipient may complete a Form 6135, Request for Payment by Check, and file it at the retirement office if the recipient does not currently have an account with a financial institution or the member's financial institution does not participate in the electronic funds transfer program.

(5) The agency shall not process the retirement allowance until the recipient has filed a valid Form 6000, Notification of Retirement, that complies with Section 3 of this administrative regulation at the retirement office.

Section 14. Death During Disability Retirement Application Process.

(1)

(a) If an applicant has a valid Form 6000, Notification of Retirement, for disability retirement benefits that complies with Section 3 of this administrative regulation on file at the retirement office, is not receiving monthly early or normal retirement benefits, and dies prior to being approved for disability retirement benefits by at least a majority of the medical examiners or by a Final Order of DAC, then the beneficiary named on the Form 6000 shall file the following at the retirement office in accordance with any applicable deadlines in KRS 61.665 and 78.545 to continue with the applicant's application or reapplication for disability retirement benefits:

1. A Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member;

2. Any outstanding forms required by Section 4 of this administrative regulation that have not yet been filed by the applicant; and

3. Any additional relevant objective medical evidence and a valid Form 8002, Certification of Application for Disability Retirement and Supporting Medical Information.

(b) If there are no applicable deadlines pursuant to KRS 61.665 and 78.545, then the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraph (a) of this subsection shall file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member, within sixty (60) days of the date of the applicant's death.

(c) A beneficiary as described in paragraphs (a) or (b) of this subsection that does not want to continue with the applicant's application or reapplication may file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member.

(d) If the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraphs (a) or (b) of this subsection does not timely file the required documentation, then the Form 6000 shall be invalid and the disability application or reapplication shall not be processed by the agency.

(2)

(a) If an applicant has a valid Form 6000, Notification of Retirement, for disability retirement benefits that complies with Section 3 of this administrative regulation on file at the retirement office, is receiving monthly early or normal retirement benefits, and dies prior to being approved for disability retirement benefits by at least a majority of the medical examiners or by a Final Order of DAC, and no monthly or lump-sum benefits are payable to the beneficiary listed on the Form 6000, then the executor, administrator, or other representative of the applicant's estate shall file the following at the retirement office in accordance with any applicable deadlines in KRS 61.665 and 78.545 to continue with the applicant's application or reapplication for disability retirement benefits:

1. An order appointing the executor, administrator, or other representative of the applicant's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court;

2. A written statement that the application or reapplication for disability retirement benefits shall continue;

3. Any outstanding forms required by Section 4 of this administrative regulation that have not yet been filed by the applicant; and

4. Any additional relevant objective medical evidence and a valid Form 8002, Certification of Application for Disability Retirement and Supporting Medical Information.

(b) If none of the deadlines in KRS 61.665 and 78.545 apply, within sixty (60) days of their appointment, the executor, administrator, or other representative of the applicant's estate as described in paragraph (a) of this subsection shall file the following at the retirement office to continue with the applicant's application or reapplication for disability retirement benefits:

1. A copy of the order appointing the executor, administrator, or other representative of the applicant's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court; and

2. A written statement that the application or reapplication for disability retirement benefits shall continue.

(c) An executor, administrator, or other representative of the applicant's estate as described in paragraphs (a) or (b) of this subsection that does not want to continue with the applicant's application or reapplication may file the following at the retirement office:

1. A copy of the order appointing the executor, administrator, or other representative of the applicant's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court; and

2. A written statement that the application or reapplication for disability retirement benefits is withdrawn.

(d) If the executor, administrator, or other representative of the applicant's estate as described in paragraphs (a) or (b) of this subsection does not timely file the required documentation, then the application or reapplication for disability retirement benefits shall be invalid and shall not be processed by the agency.

(3)

(a) If an applicant has a valid Form 6000, Notification of Retirement, for disability retirement benefits that complies with Section 3 of this administrative regulation on file at the retirement office, is receiving monthly early or normal retirement benefits, and dies prior to being approved for disability retirement benefits by at least a majority of the medical examiners or by a Final Order of DAC, and lump sum or monthly benefits are payable to the beneficiary listed on the Form 6000, then the beneficiary named on the Form 6000 shall file the following at the retirement office in accordance with any applicable deadlines in KRS 61.665 and 78.545 to continue with the applicant's application or reapplication for disability retirement benefits:

1. A Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member;

2. Any outstanding forms required by Section 4 of this administrative regulation that have not yet been filed by the applicant; and

3. Any additional relevant objective medical evidence and a valid Form 8002, Certification of Application for Disability Retirement and Supporting Medical Information.

(b) If there are no applicable deadlines pursuant to KRS 61.665 and 78.545, then the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraph (a) of this subsection shall file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member, within sixty (60) days of the date of the applicant's death.

(c) A beneficiary as described in paragraphs (a) or (b) of this subsection that does not want to continue with the applicant's application or reapplication may file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member.

(d) If the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraphs (a) or (b) of this subsection does not timely file the required documentation, then the disability retirement application or reapplication shall be invalid and shall not be processed by the agency.

Section 15. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6000, "Notification of Retirement," April 2021;

(b) Form 8030, "Employer Job Description," April 2021;

(c) Form 8035, "Employee Job Description," April 2021;

(d) Form 8040, "Prescription and Nonprescription Medications," October 2005;

(e) Form 8001, "Certification of Application for Disability Retirement and Supporting Medical Information," April 2021;

(f) Form 6010, "Estimated Retirement Allowance," April 2021;

(g) Form 8846, "Travel Voucher for Independent Examination," May 2008;

(h) Form 6130, "Authorization for Deposit of Retirement Payment," April 2021;

(i) Form 6135, "Request for Payment by Check," May 2015;

(j) Form 6008, "Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member," September 2010; and

(k) Form 8002, " Certification of Application for Disability Retirement and Supporting Medical Information," April 2021.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the authority's Web site at https://kyret.ky.gov/Publications/Pages/default.aspx.

History

• RELATES TO: KRS 16.505-16.652, 61.505-61.705, 78.510-78.852, 344.030, 29 C.F.R. Part 1630, 42 U.S.C. 12111(9)
• STATUTORY AUTHORITY: KRS 61.505(1)(f)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(f) authorizes the Kentucky Public Pensions Authority to promulgate all administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 61.510 to 61.705, 16.505 to 16.652, and 78.510 to 78.852. KRS 16.582, 78.5524, 61.600, 78.5522, 61.665, and 78.545 establish a process for applying for disability retirement benefits to members of the Kentucky Employees Retirement System, the State Police Retirement System, and the County Employees Retirement System and a process for administrative appeal of a denial of an application or reapplication for disability retirement benefits. This administrative regulation establishes the procedure for filing an application or reapplication for disability retirement benefits and the procedures for filing an administrative appeal of a denial of an application for disability retirement benefits.
• History: 105 KAR 001:210. 18 Ky.R. 932; eff. 11-8-1991; Am. 19 Ky.R. 968; 1338; eff. 12-9-1992; 20 Ky.R. 829; eff. 12-6-1993; 21 Ky.R. 1525; eff. 2-8-1995; 22 Ky.R. 775; eff. 12-7-1995; 27 Ky.R. 1050; 1444; eff. 12-21-2000; 28 Ky.R. 912; 1350; eff. 12-19-2001; 29 Ky.R. 767; 1250; eff. 11-12-2002; 31 Ky.R. 386; eff. 11-5-2004; 35 Ky.R. 111; Am. 538; eff. 10-3-2008; Crt eff. 1-29-2020; 48 Ky.R. 858, 2381; eff. 5-31-2022; Recodified to 105 KAR 003:210; eff 8-5-2026.

105 KAR 3:220 Periodic disability review {#sec-105-kar-3-220 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:220}

Section 1. Definitions.

(1) "Approved employment" means work in any capacity found by the agency not to require the same, similar, or greater duties, residual functional capacity, or physical exertion as the position from which the recipient was found disabled.

(2) "Effective retirement date" means the date upon which a member's disability, early, or normal retirement benefits began, whichever occurs first.

(3) "Employer" means a person, agency, company, organization, or other entity that directs or leads a recipient's work, whether or not for pay.

(4) "Trial basis" means a period of time not to exceed nine (9) months during which a recipient works in a non-approved employment position to allow him or her time to determine if he or she is able to maintain employment; employment during this time period shall not affect the recipient's disability retirement.

Section 2. Use of Third-party Vendors.

(1) KRS 61.505(3)(d) authorizes the agency to contract with third-party vendors to act on its behalf throughout the disability retirement application and review process, and throughout the periodic review, reinstatement review, and employment review process.

(2) The agency may utilize independent, licensed physicians provided by third-party vendors to serve as medical examiners pursuant to KRS 61.665 and 78.545. Third-party vendors may provide additional persons to fulfill non-physician roles throughout the disability retirement application, periodic review, reinstatement review, and employment review processes.

(3) Third-party vendors may act on behalf of the agency and the systems with all the rights and responsibilities therein.

Section 3. Periodic Review.

(1) A recipient of a disability retirement allowance shall have a periodic review of his or her disability status pursuant to KRS 61.610 and 78.5526.

(2)

(a) When provided by the agency and in accordance with KRS 61.610 and 78.5526, a recipient shall complete:

1. Form 8101, Employment and Medical Staff Review Certification;

2. Form 8525, Informed Consent and Authorization: Disability Retirement Applications and Reviews, All Plans; and

3. Form 8130, Disability Retiree Employment Reporting, for each of the following that is applicable:

a. The recipient is currently gainfully employed; or

b. The recipient has gainful employment not previously reported since his or her disability retirement benefits began or since his or her last employment review.

(b)

1. A recipient shall file with the agency or its third-party vendor the completed forms indicated in paragraph (a) of this subsection, and all relevant medical and employment information, by the end of day 180 calendar days from the day the Form 8101, Employment and Medical Staff Review Certification, is mailed to the recipient's address on file at the retirement office.

2. If the last day of the 180 day time period is a Saturday, Sunday, or state or federal holiday, then the submission shall be valid if filed with the agency or its third-party vendor by the end of day on the next business day following the weekend or holiday.

(3) If the recipient fails to complete the requirements of subsection (2) of this section, his or her disability retirement benefits shall be discontinued on the first day of the month following the expiration of the 180 day time period.

(4) If the recipient completes the requirements of subsection (2) of this section, the agency or its third-party vendor shall:

(a) Review and evaluate the medical information and documentation submitted in accordance with Section 4 of this administrative regulation; and

(b) Review and evaluate the employment information and documentation submitted in accordance with Section 6 of this administrative regulation.

(5) A recipient who has reached his or her normal retirement age shall not be subject to a periodic review.

(6) A recipient's disability retirement status that is continued by the Teachers' Retirement System may exempt the retiree from the agency's periodic review.

Section 4. Periodic Medical Review.

(1)

(a) The medical examiner shall evaluate the submitted medical information and documentation to determine whether the recipient continues to be disabled from the condition(s) for which he or she was initially granted disability retirement. The agency shall notify the recipient of the medical examiner's findings.

(b) If the medical examiner finds the documentation fails to provide evidence that the recipient continues to be disabled from the condition(s) for which he or she was initially granted disability retirement and recommends discontinuance of the disability retirement allowance, the notification shall include:

1. Form 8101, Employment and Medical Staff Review Certification; and

2. Form 8191, Authorization for Independent Medical or Psychological Examination and Release of Medical Information, if the medical examiner recommended an independent medical or psychological examination in accordance with KRS 61.665(2)(j) and 78.545 or KRS 61.665(3)(c) and 78.545.

(2)

(a) If the medical examiner recommended discontinuance of the disability retirement allowance, the recipient shall have sixty (60) calendar days from the date the notification in subsection (1) of this section is mailed to file with the agency or its third-party vendor:

1. The completed Form 8101, Employment and Medical Staff Review Certification, and additional supporting medical information;

2. The completed Form 8191, Authorization for Independent Medical or Psychological Examination and Release of Medical Information, if applicable; or

3. A request for a formal hearing to appeal the findings in accordance with Section 8 of this administrative regulation.

(b) If, at the end of the prescribed time period, the agency or its third-party vendor does not have on file one (1) of the options detailed in subparagraph 1., 2., or 3. of paragraph (a) of this subsection, the recipient's disability retirement allowance shall be discontinued on the first day of the month following the expiration of the prescribed time period.

(3)

(a) If the recipient completes the requirements of subsection (2)(a)1. of this section, the medical examiner shall review and evaluate the additional supporting medical information.

(b) If the recipient completes the requirements of subsection (2)(a)2. of this section the agency shall administer the independent medical or psychological examination in accordance with Section 5 of this administrative regulation. The medical examiner shall review and evaluate the findings from the independent medical or psychological examination.

(c) Once the medical examiner completes his or her evaluation of the documentation provided from the completion of paragraph (a) or (b) of this subsection, the agency shall notify the recipient of the medical examiner's findings.

1. If the medical examiner finds the documentation fails to provide evidence that the recipient continues to be disabled from the condition(s) for which he or she was initially granted disability retirement and recommends discontinuance, the recipient shall have sixty (60) calendar days from the date the notification is mailed to request a formal hearing to appeal the findings in accordance with Section 8 of this administrative regulation.

2. If the recipient fails to file an appeal within the prescribed time period, his or her retirement allowance shall be discontinued on the first day of the month following the expiration of the prescribed time period.

Section 5. Independent Medical or Psychological Examinations.

(1) If the recipient files the Form 8191, Authorization for Independent Medical or Psychological Examination and Release of Medical Information, with the agency or its third-party vendor in accordance with Section 2(2)(a)2. of this administrative regulation, then the agency shall notify the recipient in writing of the date, time, and location of the appointment. Records from the examination shall be used to complete the medical review in accordance with Section 4(3) of this administrative regulation.

(2)

(a) The agency shall reimburse the recipient for expenses associated with the medical or psychological examination in the same manner as prescribed in 105 KAR 3:210, Section 8.

(b) The recipient shall file at the retirement office a completed Form 8846, Travel Voucher for Independent Examination, within fifteen (15) calendar days of the date of the examination or evaluation to receive reimbursement for mileage, actual parking costs, and any actual bridge or highway toll charges as prescribed in 105 KAR 3:210, Section 8.

(3) Pursuant to KRS 61.615(3)(h) and 78.5528(3)(h), if the recipient fails or refuses to complete the scheduled medical or psychological examination, the system shall send a notice of discontinuance. The recipient shall have sixty (60) calendar days from the date of the notice to request a formal hearing to appeal the findings in accordance with Section 8 of this administrative regulation. If the recipient fails to file an appeal within the prescribed time period, his or her retirement allowance shall be discontinued on the first day of the month following the expiration of the prescribed time period.

(4) If the recipient fails to appear at the medical or psychological examination, or fails to cancel the appointment within the timeframes required in the notice of appointment, the recipient shall be responsible for payment of any charges associated with the medical or psychological examination.

Section 6. Employment Review.

(1) The agency may request financial information from other local, state, or federal agencies to determine if a recipient is gainfully employed.

(2) A recipient may at any time file with the agency or its third-party vendor a completed Form 8130, Disability Retiree Employment Reporting, to be reviewed for potential gainful employment. The agency or its third-party vendor shall complete an employment review in accordance with subsection (5) of this section. The anticipated start date of employment indicated on the Form 8130 shall be used to determine time period requirements indicated in subsection (5) of this section. If the start date of employment was unknown on the Form 8130 and at any time becomes known, or if there is a change to the date previously indicated, the recipient shall notify the agency in writing.

(3)

(a) Pursuant to KRS 61.615(1) and 78.5528(1), a recipient of a disability retirement allowance shall notify the agency of any gainful employment. When gainful employment is reported to the agency outside of the periodic review, or if gainful employment is discovered by any other means, the agency shall provide the recipient with a Form 8130, Disability Retiree Employment Reporting. The recipient shall file the completed Form 8130 with the agency or its third-party vendor within sixty (60) calendar days of beginning any gainful employment. The agency or its third-party vendor shall use the completed Form 8130 to perform an employment review in accordance with subsection (5) of this section.

(b)

1. If the recipient does not file with the agency or its third-party vendor the Form 8130 or written notification that the employment has ceased within nine (9) months of the first date of employment, the agency shall have the authority to discontinue the disability retirement allowance.

2. If the agency determines the disability retirement allowance shall be discontinued, the agency shall send notification to the recipient, and he or she shall have sixty (60) calendar days from the date the notice is mailed to request a formal hearing to appeal the findings in accordance with Section 8 of this administrative regulation.

3. If the recipient fails to file an appeal within the prescribed time period, his or her retirement allowance shall be discontinued on the first day of the month following the expiration of the prescribed time period.

(4)

(a) During the periodic review, a recipient shall complete Form 8101, Employment and Medical Staff Review Certification, indicating if he or she is gainfully employed or has any previously unreported gainful employment. When indicated, the recipient shall file with the agency or its third-party vendor a completed Form 8130, Disability Retiree Employment Reporting, for each of the following:

1. His or her current gainful employment; and

2. Any gainful employment not previously reported since his or her disability retirement benefits began, or since his or her last periodic review.

(b) The agency or its third-party vendor shall complete an employment review for all employment not previously approved in accordance with subsection (5) of this section.

(c) During the periodic medical review as prescribed in Section 4 of this administrative regulation, the agency or its third-party vendor shall consider the employment details when determining whether the recipient continues to be disabled from the condition(s) for which he or she was initially granted disability retirement, regardless of whether or not the employment was approved employment.

(5) When gainful employment is reported during or outside of the periodic review, or discovered by any other means, the agency or its third-party vendor shall complete an employment review in accordance with KRS 61.610, 61.615, 78.5526, and 78.5528. The reviewer shall evaluate the Form 8130, Disability Retiree Employment Reporting, or any other employment information or documentation available to determine whether the position has similar duties or requires the same or greater physical exertion or functional capacity as the position from which the recipient was found disabled. The agency shall notify the recipient of the findings.

(a) If findings indicate that a recipient's employment is not approved employment, then pursuant to KRS 61.615(1) and 78.5528(1), the recipient may begin or continue the employment on a trial basis and the recipient's monthly retirement allowance shall continue during the trial basis. The recipient's monthly retirement allowance shall cease effective the month following the end of the trial basis unless within sixty (60) calendar days of the date the notice is mailed, one (1) of the following occurs:

1. The recipient requests a formal hearing to appeal the recommendation in accordance with Section 8 of this administrative regulation;

2. The recipient files with the agency or its third-party vendor additional supporting employment information. The agency or agency's third-party vendor shall review and evaluate the additional employment information, and shall notify the recipient of the findings. If the findings indicate the employment is not approved employment, the recipient shall have sixty (60) calendar days from the date the notification is mailed to request a formal hearing to appeal the findings in accordance with Section 8 of this administrative regulation; or

3. The recipient files a written notice with the agency or its third-party vendor in one (1) of the following ways:

a. If the recipient has not yet begun the employment, a written notification with the agency that he or she has elected not to start the employment; or

b. If the recipient begins or continues the employment on a trial basis, prior to the conclusion of the trial basis a written notification that he or she has ceased the employment.

(b) If the recipient fails to file an appeal within the prescribed time period, his or her retirement allowance shall be discontinued on the first day of the month following the end of the trial basis, or upon the expiration of the sixty (60) day time period, whichever occurs later.

(6) Retired members who are reemployed with a participating employer, shall also be subject to the requirements of KRS 61.637, 78.5540, and 105 KAR 5:390.

Section 7. Reinstatement Review.

(1)

(a) A recipient whose disability retirement allowance has been discontinued for any reason other than death is eligible to apply for reinstatement and be reevaluated by the agency or the agency's third-party vendor until his or her normal retirement age. The recipient shall submit new objective medical evidence that was not previously considered with his or her application for reinstatement.

(b) A recipient whose disability retirement allowance was discontinued based upon the employment review findings as prescribed in Section 6 of this administrative regulation shall also provide:

1. Employer documentation detailing changes not previously considered that have occurred in his or her position if he or she is still employed in the same position; or

2. Written notification that he or she has ceased the employment that includes the date employment ceased.

(2) Pursuant to KRS 61.615(6)(d) and 78.5528(6)(d), a recipient is only eligible for reinstatement for the same bodily injuries, mental illnesses, diseases, or conditions for which he or she was originally approved for disability benefits. A recipient cannot be reinstated for bodily injuries, mental illnesses, diseases, or conditions for which he or she was not approved for disability, or that occurred or became known after his or her last day of paid employment prior to the original retirement date.

(3) A recipient shall apply for reinstatement by filing:

(a) A completed Form 8102, Employment and Medical Staff Review Certification Reinstatement;

(b) A completed Form 8525, Informed Consent and Authorization: Disability Retirement Applications and Reviews;

(c) New objective medical evidence not previously considered;

(d) If filing for reinstatement in accordance with subsection (1)(b) of this section, not previously considered employer documentation detailing changes in the position, or written notification that the employment has ceased that includes the last date of employment; and

(e) If there is any new or previously unreported employment, a completed Form 8130, Disability Retiree Employment Reporting.

(4) Reinstatement reviews shall be conducted in accordance with KRS 61.615(6)(d) and 78.5528(6)(d), considering only those conditions for which the recipient was granted disability.

(5) If the agency or the agency's third-party vendor does not recommend reinstatement of a recipient's disability retirement benefits, the recipient may request a formal hearing to appeal the findings in accordance with Section 8 of this administrative regulation.

Section 8. Right to Appeal.

(1) Any recipient whose disability benefits have been reduced, discontinued, or denied reinstatement may file an appeal of the findings at the retirement office with a written request for a formal hearing within sixty (60) calendar days of the date the notification of discontinuance was mailed. The hearing shall be conducted in accordance with KRS Chapter 13B.

(2) The written request for a formal hearing shall include a short and plain statement of the reason the determination is being contested.

(3)

(a) The hearing officer presiding over an administrative hearing may allow the person who filed the appeal to introduce, among other evidence, the determination of other state and federal agencies, such as the Kentucky Department of Workers' Claims and the Social Security Administration, approving the applicant for benefits only when accompanied by underlying objective medical evidence or vocational evidence.

(b) The hearing officer presiding over an administrative hearing shall consider only objective medical evidence and vocational records contained within or that accompany a determination by another state or federal agency.

(c) The hearing officer presiding over an administrative hearing shall not consider or be bound by factual or legal findings of other state or federal agencies.

(d) Written statements from medical providers within the administrative record shall not themselves be objective medical evidence but may be relied upon if accompanied by, and reviewed in concert with, other supporting objective medical evidence.

(4) During the pendency of an appeal, the recipient shall continue to receive his or her disability retirement benefit.

(5) At the conclusion of the appeal, a recipient shall be notified of the final order of the Administrative Appeals Committee (AAC) in accordance with KRS 61.615(3)(g) and 78.5528(3)(g).

(a)

1. If the AAC orders that the disability retirement allowance shall be discontinued, then it shall be discontinued on the first day of the month following the date of the notification except as provided in subparagraph 2. of this paragraph.

2. If the recipient's disability retirement allowance is discontinued due to the AAC determination that employment was not approved employment, the effective date of discontinuance shall be the first day of the month following the end of the nine (9) month trial basis or the first day of the month following the date of the notification of the AAC order, whichever occurs later.

(b)

1. If the recipient fails to notify the agency of gainful employment in accordance with Section 6(3) or (4) of this administrative regulation, then AAC shall have the authority to decide the period for which the agency shall recover any disability retirement allowance payments, health insurance premiums, or both. The earliest date of the period shall not be earlier than the first day of the month following the end of the nine (9) month trial basis.

2. If the agency recovers the disability retirement allowance payments, health insurance premiums paid, or both, it shall be from the recipient or the estate of the recipient only.

Section 9. Benefits Available After Discontinuance of a Disability Retirement Allowance.

(1) A member with a participation date on or after January 1, 2014 in one (1) or more of the Systems whose disability retirement allowance is discontinued pursuant to KRS 61.615 and 78.5528:

(a) Shall begin receiving retirement benefits for which he or she qualifies, if eligible.

(b) Shall not be eligible for early retirement benefits.

(2) A member with a participation date prior to January 1, 2014 in one (1) or more of the Systems whose disability retirement allowance is discontinued pursuant to KRS 61.615 and 78.5528:

(a) Shall begin receiving normal retirement benefits, if eligible.

(b) If not eligible for normal retirement benefits, shall be given the option to begin receiving early retirement benefits, if eligible.

(3) A member who received a disability retirement allowance shall have established an effective retirement date and, accordingly, shall not be eligible to request a refund of any remaining accumulated account balance if the member's disability retirement allowance is discontinued pursuant to KRS 61.615 and 78.5528.

Section 10. Recipient's Death During the Periodic Review Process.

(1) If the recipient dies during the periodic review process, the member's beneficiary may be entitled to receive disability retirement benefits pursuant to KRS 61.630, 78.545(6) and 105 KAR 3:240

(2) If a recipient dies after the date of discontinuance as enumerated in Section 3, 4, 5, or 6 of this administrative regulation, the disability retirement allowance shall remain discontinued and there shall be no ongoing disability benefit paid to a beneficiary. This shall not affect any other benefits to which the beneficiary may be entitled.

(3) The beneficiary shall not be permitted to apply for reinstatement on behalf of the decedent.

Section 11. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 8101, "Employment and Medical Staff Review Certification", February 2023;

(b) Form 8102, "Employment and Medical Staff Review Certification Reinstatement", February 2023;

(c) Form 8130, "Disability Retiree Employment Reporting", February 2023;

(d) Form 8191, "Authorization for Independent Medical or Psychological Examination and Release of Medical Information", April 2023;

(e) Form 8525, "Informed Consent and Authorization: Disability Retirement Applications and Reviews, All Plans", February 2023; and

(f) Form 8846, "Travel Voucher for Independent Examination", May 2008.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the agency Web site at ky-ret.ky.gov.

History

• RELATES TO: KRS 16.577, 16.583, 16.645, 61.592, 61.600, 61.610, 61.615, 61.630, 61.637, 61.559, 61.597, 61.665, 78.545, 78.5510, 78.5512, 78.5514, 78.5516, 78.5522, 78.5524, 78.5526, 78.5528, 78.5540
• STATUTORY AUTHORITY: KRS 61.505(1)(g) and (3)(d)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate all administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.610, 61.615, 78.5526, and 78.5528 provide for the employment and medical review of a recipient of a disability retirement allowance to determine if the recipient's disability retirement allowance should be continued or discontinued. This administrative regulation establishes the process for employment and medical reviews.
• History: 105 KAR 001:220. 18 Ky.R. 936; eff. 11-8-1991; Am. 27 Ky.R. 1052; 1445; eff. 12-21-2000; 29 Ky.R. 1866, 2276; 3-19-2003; 31 Ky.R. 389; eff. 11-5-2004; 35 Ky.R. 115; 541; eff. 10-3-2008; TAm eff. 6-11-2019; Cert eff. 6-11-2019; 49 Ky.R.2342, 50 Ky.R. 633; eff. 12-5-2023; Crt eff. 6-11-2026; Recodified to 105 KAR 003:220; eff. 8-5-2026.

105 KAR 3:240 Death after retirement procedures {#sec-105-kar-3-240 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:240}

Section 1. After learning of the death of a recipient, the retirement system shall contact the named beneficiary or estate of the deceased.

Section 2. The following information shall be required before benefits shall be paid:

(1) A copy of the recipient's death certificate. If the death certificate shows the cause of death to be homicide or the subject of a pending investigation, the retirement office may also require additional evidence relating to the cause of death or investigations and arrests by enforcement agencies and may delay benefits until the cause of death is fully explained;

(2) If there is a benefit payable to a beneficiary and the beneficiary is deceased, a copy of the beneficiary's death certificate;

(3) If the beneficiary is a minor child, a copy of the child's birth verification and a Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the minor child has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor, the guardian or conservator shall submit a copy of the court order appointing the guardian or conservator;

(4) If the beneficiary is divorced from the recipient, a copy of the divorce decree;

(5) If the beneficiary is the surviving spouse of the deceased member and the spouse elects a direct rollover or direct payment of an actuarial refund, refund of contributions, or $5,000 Death Benefit, a Form 6025, Direct Rollover/Direct Payment Election Form for a Member or a Spouse Beneficiary of an Eligible Rollover Distribution; and

(6) If the beneficiary is not the surviving spouse of the deceased member and the nonspouse beneficiary elects a direct rollover or direct payment of an actuarial refund, refund of contributions, or $5,000 Death Benefit, a Form 6026, Direct Rollover/Direct Payment Election Form for a Non-Spouse Beneficiary of an Eligible Rollover Distribution.

(7) If the payments are due to an estate, a copy of the court order appointing the executor, administrator, or personal representative of the estate, or a copy of the court order dispensing with formal administration of the estate on which the payments due the estate are listed.

(8) The beneficiary or authorized individual shall sign a Form 6810, Certification of Beneficiary, provided by the retirement system.

Section 3. Payments shall not be made until all required information, documents, and completed forms are received at the retirement office.

Section 4.

(1) A recipient shall complete a Form 6130 Authorization for Deposit of Retirement Payment, to have the monthly retirement allowance deposited to an account in a financial institution.

(2) The recipient and the financial institution shall provide the information and authorizations required for the electronic transfer of funds from the State Treasurer's Office to the designated financial institution.

(3)

(a) At any time while receiving a retirement allowance, the recipient may change the designated institution by completing a new Form 6130, Authorization for Deposit of Retirement Payment, and filing the form at the retirement office.

(b) The last Form 6130, Authorization for Deposit of Retirement Payment, on file at the retirement office shall control the electronic transfer of the recipient's retirement allowance.

(4) The recipient may complete a Form 6135, Request for Payment by Check, if the recipient does not currently have an account with the financial institution or the recipient's financial institution does not participate in the electronic funds transfer program.

Section 5. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6110, "Affidavit of Authorization to Receive Funds on Behalf of Minor", May 2003;

(b) Form 6810, "Certification of Beneficiary", May 2008;

(c) Form 6130, "Authorization for Deposit of Retirement Payment", May 2008;

(d) Form 6135, "Request for Payment by Check", February 2002; and

(e) Form 6025, "Direct Rollover/Direct Payment Election Form for a Member or a Spouse Beneficiary of an Eligible Rollover Distribution", May 2008; and

(f) Form 6026, "Direct Rollover/Direct Payment Election Form for a Non-Spouse Beneficiary of an Eligible Rollover Distribution", May 2008.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, from Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

• RELATES TO: KRS 16.645(10), (29), 61.623, 61.630, 78.545(16), (40)
• STATUTORY AUTHORITY: KRS 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) authorizes the Board of Trustees of Kentucky Retirement Systems to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. This administrative regulation establishes the procedures for issuance of benefits when the death of the recipient is after the member's retirement.
• History: 105 KAR 003:240.18 Ky.R. 940; eff. 11-8-91; 21 Ky.R. 1530; eff. 2-8-95; 29 Ky.R. 772; 1253; eff. 11-12-02; 31 Ky.R. 391; eff. 11-5-04; 34 Ky.R. 119; 544; eff. 10-5-2007; 35 Ky.R. 117; eff. 10-3-08; TAm eff. 1-29-2020; Crt eff. 1-29-2020; Recodified to 105 KAR 003:240; eff. 8-5-2026.

105 KAR 3:310 Fred Capps Memorial Act {#sec-105-kar-3-310 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:310}

Section 1. Definitions.

(1) Unless otherwise defined in this section, the definitions contained in KRS 16.505, 61.510, and 78.510 shall apply to this administrative regulation .

(2) Prior to April 1, 2021, "Agency" means the Kentucky Retirement Systems, which administers the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System. Effective April 1, 2021, "Agency" means the Kentucky Public Pension Authority, which is authorized to carry out the day-to-day administrative needs of the Kentucky Retirement Systems (comprised of the State Police Retirement System and the Kentucky Employees Retirement System) and the County Employees Retirement System.

(3) "Applicant" means a member or retired member of the Kentucky Employees Retirement System, the County Employees Retirement System, or both who has applied or is applying for duty-related disability benefits in accordance with KRS 61.621, 61.665, and 78.545.

(4) Prior to April 1, 2021, "DAC" means the Disability Appeals Committee of the Board of Trustees of the Kentucky Retirement Systems. Effective April 1, 2021, "DAC" means the separate or joint Disability Appeals Committees of the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System in accordance with KRS 61.665(4) and 78.545.

(5) "File" means delivering or submitting a form or other documents to the retirement office, unless otherwise stated by: mail, fax, in-person delivery, secure email, or upload via Self Service on the Web site maintained by the agency (if available). A form or other document is not filed until it has been received at the retirement office.

(6) "Invalid" means that the form is deficient and not to be accepted or processed by the agency.

(7) "Participating employer" means an employer participating in the Kentucky Employees Retirement System or the County Employees Retirement System.

(8) "Recipient" means a retired member of the Kentucky Employees Retirement System, the County Employees Retirement System, or both who is receiving duty-related disability benefits in accordance with KRS 61.621, 61.665, and 78.545.

(9) "Valid" [when used in reference to a form,] means that all required sections on a form are completed and all required signatures on a form are executed.

Section 2. Use of Third-party Vendors.

(1) The agency may contract with third-party vendors to act on its behalf throughout the duty-related disability and duty-related death benefit application and review process. The agency may also contract with third-party vendors to act on its behalf throughout the periodic review, reinstatement review, and employment review processes.

(2) The agency may utilize independent, licensed physicians provided by third-party vendors to serve as medical examiners pursuant to KRS 61.665 and 78.545. Third-party vendors may provide additional persons to fulfill non-physician roles throughout the duty-related disability and duty-related death benefit application process.

(3) Third-party vendors may act on behalf of the agency and the systems with all the rights and responsibilities therein.

Section 3. Application for Duty-Related Death Benefits.

(1)

(a) A written request for duty-related death benefits pursuant to KRS 61.621 and 78.545 shall be filed by the surviving spouse, dependent child, or parent or guardian of dependent child at the retirement office.

(b) The agency may notify the surviving spouse, dependent child, or parent or guardian of the dependent child of their ability to file a written request for duty-related death benefits if the agency becomes aware of a nonhazardous employee potentially killed as a result of a duty-related injury.

(c) A claim for duty-related death benefits shall be verified by the deceased employee's immediate supervisor and agency head on the Form 6800, Application for Duty Related/In Line of Duty Death Benefits.

(2)

(a) The participating employer, surviving spouse, dependent child, or parent or guardian of dependent child shall submit the following documents:

1. A copy of the death certificate;

2. The employer death investigation report; and

3. An employee job description provided by the participating employer.

(b) The agency may request additional information; medical records, including hospital, emergency room, autopsy, or other related records; documentation relating to Workers' Compensation claims; and police or other crime reports, if necessary, from the participating employer, surviving spouse, dependent child, or parent or guardian of dependent child.

(3) The application for duty-related death benefits and accompanying documentation as listed in subsection (2) of this section shall be reviewed by the agency's medical examiners, or the agency's third-party vendor, and administered in the same manner as provided in KRS 16.582, 78.5524, 61.665, and 78.545.

Section 4. Application for Duty-Related Disability Benefits.

(1)

(a) A claim for duty-related disability benefits pursuant to KRS 61.621 and 78.545 shall be filed by the applicant at the retirement office.

(b) An application for duty-related disability benefits shall be made by the applicant on the Form 6000, Notification of Retirement.

(2) The applicant shall file the following forms and information to the retirement office along with a valid application for duty-related disability benefits in accordance with subsection (1) of this section:

(a) A Workers' Compensation incident report, if one exists;

(b) A valid Form 8035, Employee Job Description;

(c) A valid Form 8040, Prescription and Nonprescription Medications;

(d) Supporting medical information; and

(e) Once all supporting medical information has been submitted, a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information.

(3) The applicant's participating employer shall complete and submit to the retirement office a Form 8030, Employer Job Description.

(4) The applicant and the applicant's employer shall file or submit additional information regarding the applicant's job duties and reasonable accommodations upon request by the agency or a third-party vendor on its behalf.

(5) The application for duty-related disability benefits and accompanying documentation as listed in subsections (2), (3), and (4) of this section shall be reviewed by the agency's medical examiners, or the agency's third-party vendor, and administered in the same manner as provided in KRS 16.582, 78.5524, 61.665, and 78.545.

Section 5. Joint Application for Duty-Related Disability Benefits and Disability Retirement Benefits.

(1) If qualified to retire on disability pursuant to KRS 61.600 and 78.5522, an applicant may apply for both duty-related disability benefits in accordance with KRS 61.621 and 78.545 and disability retirement benefits in accordance with KRS 61.600 and 78.5522 using the same valid Form 6000, Notification of Retirement.

(2)

(a) If an applicant qualified to retire on disability applies for both duty-related disability benefits in accordance with KRS 61.621 and 78.545 and disability retirement benefits in accordance with KRS 61.600 and 78.5522 using the same Form 6000, Notification of Retirement, and is approved only for disability retirement benefits by a majority or greater of the reviewing medical examiners pursuant to KRS 61.665 and 78.545, the applicant may solely appeal the denial of duty-related disability benefits in the same manner provided for disability retirement benefits in KRS 61.665(2)(f), 61.665(2)(h), and 78.545.

(b) A request for an administrative hearing to solely appeal the denial of duty-related disability benefits shall not affect the disability retirement benefits of an applicant who has been approved for disability retirement benefits under KRS 61.600 and 78.5522, except as provided in KRS 61.685 and 78.545.

(3) If an applicant qualified to retire on disability applies for both duty-related disability benefits in accordance with KRS 61.621 and 78.545 and disability retirement benefits in accordance with KRS 61.600 and 78.5522 using the same Form 6000, Notification of Retirement, and is denied for both by a majority or greater of the reviewing medical examiners pursuant to KRS 61.665 and 78.545, the applicant may appeal both the denial of duty-related disability and disability retirement benefits as provided by KRS 61.665(2)(f), 61.665(2)(h), and 78.545.

(4) A request for an administrative hearing to solely appeal the denial of duty-related disability benefits or to appeal denials of both duty-related disability benefits and disability retirement benefits shall conform with Section 10 of this administrative regulation.

Section 6. Time Period for Filing.

(1)

(a) The application or reapplication for duty-related death or duty-related disability benefits shall be filed at the retirement office within twenty-four (24) months from the employee's last day of paid employment in a regular full-time position.

(b) The filing period shall begin on the day after the last day of paid employment in a regular full-time position and shall end at close of business on the 730th calendar day.

(c) If the 730th day is on a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the public office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the application shall be timely if filed at the retirement office by the close of the next business day.

(d) If the 730th day is on a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the application or reapplication is not timely and the employee, surviving spouse, dependent child, or parent or guardian of dependent child is not qualified for duty-related death or duty-related disability benefits.

(e)

1. The applicant's last day of paid employment shall either be certified by the applicant's employer or filed by the applicant and corroborated by the reporting information received by the agency from the applicant's employer.

2. In accordance with KRS 61.685 and 78.545, the applicant's last day of paid employment may be corrected at any time upon discovery of any error or omission in the agency's records.

(2) If rejected, an employee's reapplication for duty-related disability benefits based on the same claim of incapacity shall be reconsidered for disability if accompanied by new objective medical evidence or new evidence concerning the duty-related injury that was not considered with previous applications. The reapplication shall be filed at the retirement office within twenty-four (24) months from the employee's last day of paid employment in a regular full-time position.

Section 7. Effect of Application or Reapplication for Duty-Related Disability Benefits While Prior Application or Reapplication is Pending.

(1) If a subsequent valid reapplication for duty-related disability benefits that complies with Sections 4 and 6 of this administrative regulation is filed at the retirement office while a prior application or reapplication is pending review by the medical examiners under KRS 61.665 and 78.545, then the subsequent reapplication shall be accepted solely for the purpose of designating a new beneficiary in accordance with KRS 61.542 and 78.545. The subsequent reapplication shall not be submitted for review by the medical examiners.

(2)

(a) If a subsequent valid reapplication for duty-related disability benefits that complies with Sections 4 and 6 of this administrative regulation is filed at the retirement office after an applicant has requested an administrative hearing to appeal the denial of an earlier application or reapplication for duty-related disability benefits, but prior to a Final Order of DAC regarding the earlier application or reapplication, then the subsequently filed reapplication shall be found as a notice of intent to dismiss the request for administrative hearing unless the applicant simultaneously files a written statement that the subsequently filed reapplication has been filed solely for the purpose of designating a new beneficiary in accordance with KRS 61.542 and 78.545.

(b) A subsequently filed reapplication as described in paragraph (a) of this subsection shall not be processed by the agency until thirty-one (31) days after the entry of a Final Order of DAC dismissing the previously requested administrative appeal, except that a new beneficiary designated on the subsequently filed reapplication in accordance with KRS 61.542 and 78.545 shall be effective immediately.

(c) All evidentiary filings made during an administrative hearing process to appeal the denial of an earlier application or reapplication for duty-related disability benefits shall be included in the information provided to the medical examiners for review of the subsequently filed reapplication.

(3)

(a)

1. If a subsequent valid reapplication for duty-related disability benefits is filed at the retirement office after DAC has issued a Final Order denying a prior application or reapplication for duty-related disability benefits and during the statutory time for appeal of the Final Order or after an appeal of the Final Order has been made, then the subsequently filed reapplication shall be accepted solely for the purpose of designating a new beneficiary in accordance with KRS 61.542 and 78.545.

2. The subsequent reapplication shall not be submitted for review by the medical examiners, unless the applicant files a written statement that the applicant shall not appeal the Final Order of DAC or has withdrawn any pending appeal of a Final Order of DAC.

(b) If a subsequent valid reapplication for duty-related disability benefits is filed at the retirement office after DAC has issued a Final Order denying an application or reapplication for duty-related disability benefits, all applicable statutory time for appeals of the Final Order have lapsed, and the reapplication complies with KRS 61.621, 78.545 and Sections 4 and 6 of this administrative regulation, then the subsequently filed reapplication for duty-related disability benefits shall be valid.

Section 8. Medical or Psychological Examination Required at the Expense of the Agency.

(1) If the agency requires an applicant to submit to a medical or psychological examination under KRS 61.665(2)(j) and 78.545 or KRS 61.665(3)(c) and 78.545, the agency shall reimburse the applicant for expenses associated with the medical or psychological examination in the same manner as 105 KAR 3:210, Section 8.

(2) The applicant shall file the Form 8846, Travel Voucher for Independent Examination and all necessary receipts at the retirement office within fifteen (15) days of the examination or evaluation to be reimbursed for mileage, actual parking costs, and any actual bridge or highway toll charges as described in subsection (1) of this section and 105 KAR 3:210, Section 8.

Section 9. Requests for Additional Objective Medical Evidence by the Medical Examiners.

(1) A medical examiner reviewing an application or reapplication for duty-related disability benefits or duty-related death benefits may place their recommendation on hold and request additional objective medical evidence.

(2) If two (2) or more of the three (3) medical examiners reviewing an application or reapplication for duty-related disability benefits or duty-related death benefits place their recommendation on hold and request additional objective medical evidence, then the agency, or a third-party vendor, shall notify the applicant of the medical examiner's request for additional objective medical evidence. The applicant shall have sixty (60) days from the date of the notification to file the requested objective medical evidence to the retirement office.

(3) If there is no majority recommendation by the three (3) medical examiners reviewing an application or reapplication for duty-related disability benefits or duty-related death benefits because one (1) medical examiner recommends approval, one (1) medical examiner recommends denial, and one (1) medical examiner requests additional objective medical evidence, then the agency, or a third-party vendor, shall notify the applicant of the medical examiner's request for additional objective medical evidence. The applicant shall have sixty (60) days from the date of the notification to file the requested objective medical evidence to the retirement office.

(4)

(a) Upon receipt of the requested additional objective medical evidence with a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information, the agency, or a third-party vendor, shall resubmit the matter, including any additional objective medical evidence submitted in response to the medical examiner's request, to all three (3) medical examiners and the medical examiners shall issue new recommendations.

(b) Upon the expiration of sixty (60) days from the date of the notification, if no additional objective medical evidence with a valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information, is on file at the retirement office, the agency, or a third-party vendor, shall resubmit the matter to only the medical examiner or examiners that placed their recommendation on hold and the medical examiner or examiners shall issue a new recommendation.

Section 10. Administrative hearings concerning the denial of duty-related disability or duty-related death benefits.

(1)

(a) A request by an applicant, surviving spouse, dependent child, or parent or guardian of a dependent child for an administrative hearing to appeal the denial of duty-related disability or duty-related death benefits under KRS 61.621, 61.665, and 78.545 shall be made in writing and contain a short statement of the issues being appealed.

(b) The written request for an administrative hearing to appeal the denial of duty-related disability or duty-related death benefits by an applicant, surviving spouse, dependent child, or parent or guardian of a dependent child shall be filed at the retirement office. Email requests shall not be accepted.

(2) The hearing officer presiding over an administrative hearing may allow an applicant, surviving spouse, dependent child, or parent or guardian of a dependent child to introduce, among other evidence, the determination of other state and federal agencies, such as the Kentucky Department of Workers' Claims and the Social Security Administration, approving the applicant for benefits if accompanied by underlying objective medical evidence or vocational evidence.

(3) The hearing officer presiding over an administrative hearing shall consider only objective medical evidence and vocational records contained within or that accompany a determination by another state or federal agency.

(4) The hearing officer presiding over an administrative hearing shall not consider or be bound by factual or legal findings of other state or federal agencies.

(5) Statements by physicians within the administrative record of the application or reapplication for duty-related disability or duty-related death benefits shall not be considered by themselves to be objective medical evidence unless accompanied by documented medical records or test results.

Section 11. Employment and Medical Reviews. If, upon review in accordance with KRS 61.610, 61.615, 78.5528, or other applicable statute, the medical examiner, or third-party vendor, determines that a retired member receiving duty-related disability benefits no longer meets eligibility requirements, then the medical examiner, or third-party vendor, shall determine if the retired member is qualified and remains eligible for disability retirement benefits in accordance with KRS 61.600 and 78.5522.[

Section 12. Benefit Payment Procedures for Duty-Related Disability.

(1) If the employee's application for duty-related disability benefits is approved, the employee's duty-related disability benefit shall be paid retroactive to the month following the month of the employee's last day of paid employment in a regular full-time position.

(2) If the employee did not receive early or normal retirement benefits or disability retirement benefits under KRS 61.600 and 78.5522, upon the employee's selection of a payment option, the agency shall pay the employee the total monthly retirement allowances owed.

(3)

(a) If the employee did receive early or normal retirement benefits or disability retirement benefits under KRS 61.600 and 78.5522, the agency shall calculate and pay to the employee the difference between the early or normal retirement benefit or disability retirement benefit which was paid to the employee and the duty-related disability benefit.

(b) The employee shall not change the beneficiary named or the payment option selected upon early, normal, or disability retirement, except as provided in KRS 61.542(5)(a), 61.542(5)(b), and 78.545.

(4) If benefits are payable to a dependent child as defined in KRS 16.505, the dependent child or the child's parent or guardian shall file the following documents at the retirement office:

(a) A Form 6448, Designation of Dependent Child for Qualifying Total and Permanent Disability;

(b) If the child is age eighteen (18) or over and a full-time student, verification of full-time student status, if applicable;

(c) If the child is eligible for federal Social Security disability benefits or is being claimed as a qualifying child for tax purposes due to the child's total and permanent disability, file a copy of the most recent statement issued by the Social Security Administration for the dependent children;

(d) A copy of the birth certificate of each dependent child; and

(e) If a dependent child is a minor, a Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the minor has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor, the guardian or conservator shall file a copy of the court order appointing the guardian or conservator.

(5)

(a) The dependent child or the parent or guardian of the dependent child shall:

1. Notify the agency of the death or marriage of a dependent child or if the dependent child ceases to be a full-time student, if applicable; and

2. File a copy of the dependent child's verification of full-time student status with the agency for each semester of study within thirty (30) days following the start and within thirty (30) days following the end of each semester, if applicable.

(b) The dependent child or the parent or guardian of the dependent child shall be responsible for repaying any dependent child benefits overpaid due to the failure of the dependent child or parent or guardian of the dependent child to provide the information required by paragraph (a) of this subsection.

(6) Any increases provided under KRS 61.691 and 78.5518 shall be applied to the employee's duty-related disability benefit and payments to a dependent child in determining the total retroactive payments owed to the employee and dependent child.

(7)

(a) A recipient shall complete a Form 6130, Authorization for Deposit of Retirement Payment, and file it at the retirement office, include direct deposit information on the Form 6000, Notification of Retirement, or authorize direct deposit via Self-Service on the Web site maintained by the agency to have the monthly retirement allowance deposited to an account in a financial institution.

(b) A dependent child or parent or guardian of a dependent child shall file a valid Form 6130, Authorization for Deposit of Retirement Payment, at the retirement office to have the monthly benefit deposited to an account in a financial institution.

(c) [()] The recipient, dependent child, or parent or guardian of a dependent child and the financial institution shall provide the information and authorizations required for the electronic transfer of funds from the State Treasurer's Office to the designated financial institution.

(8)

(a) At any time while receiving a retirement allowance, the recipient may change the designated institution by completing a new valid Form 6130, Authorization for Deposit of Retirement Payment, and filing the form at the retirement office, or by changing their direct deposit information via Self-Service on the Web site maintained by the agency.

(b) The latter of the designation on a valid Form 6000, Notification of Retirement, the last valid Form 6130, Authorization for Deposit of Retirement Payment, after the Form 6000 is on file at the retirement office, or the direct deposit information submitted via Self-Service on the Web site maintained by the agency shall control the electronic transfer of the recipient's retirement allowance.

(c) At any time while receiving a monthly benefit, the dependent child or parent or guardian of a dependent child may change the designated institution by filing a new valid Form 6130, Authorization for Deposit of Retirement Payment, at the retirement office or by submitting new direct deposit information via Self-Service on the Web site maintained by the agency.

(d) The last valid Form 6130, Authorization for Deposit of Retirement Payment, or the last direct deposit information submitted via Self-Service on the Web site maintained by the agency shall control the electronic transfer of the dependent child's monthly benefit.

(9) A recipient, dependent child, or parent or guardian of a dependent child may complete a valid Form 6135, Request for Payment by Check, and file it at the retirement office if the recipient, dependent child, or parent or guardian of a dependent child does not currently have an account with a financial institution or the financial institution does not participate in the electronic funds transfer program.

(10) The agency shall not process the retirement allowance or monthly benefit until the recipient, dependent child, or parent or guardian of a dependent child has filed a valid Form 6130, Authorization for Deposit of Retirement Payment, included direct deposit information on a valid Form 6000, Notification of Retirement, filed a valid Form 6135, Request for Payment by Check, or authorized direct deposit via Self-Service on the Web site maintained by the agency.

Section 13. Benefit Payment Procedures for Duty-Related Deaths.

(1) If the application for duty-related death benefits is approved, the duty-related death benefit shall be paid retroactive to the month following the month of the employee's date of death.

(2) If the surviving spouse did not receive survivor benefits under KRS 61.640 and 78.5532, upon the surviving spouse's selection of a payment option, the agency shall pay the surviving spouse the total monthly retirement allowances owed.

(3)

(a) If the beneficiary was a surviving spouse who began receiving survivor benefits KRS 61.640 and 78.5532, the agency shall calculate the difference between the survivor benefit paid to the surviving spouse beneficiary and the duty-related death benefit. The agency shall pay the surviving spouse any additional funds due.

(b) If the surviving spouse was paid more than the amount due under KRS 61.621 or KRS 78.545, the agency shall deduct the difference from the $10,000 lump sum payment and from the monthly retirement allowance payments until the amount owed to the agency has been recovered.

(4) If benefits are payable to a dependent child as defined in KRS 16.505, the dependent child or the child's parent or guardian shall file the following documents at the retirement office:

(a) A Form 6458, Designation of Dependent Child for In Line of Duty/Duty-Related;

(b) If the child is age eighteen (18) or over and a full-time student, verification of full-time student status, if applicable;

(c) If the child is eligible for federal Social Security disability benefits or is being claimed as a qualifying child for tax purposes due to the child's total and permanent disability, file a copy of the most recent statement issued by the Social Security Administration for the dependent children;

(d) A copy of the birth certificate of each dependent child; and

(e) If a dependent child is a minor, a Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the minor has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor, the guardian or conservator shall file a copy of the court order appointing the guardian or conservator.

(5)

(a) The dependent child or the parent or guardian of the dependent child shall:

1. Notify the agency of the death or marriage of a dependent child or if the dependent child ceases to be a full-time student, if applicable; and

2. File a copy of the dependent child's verification of full-time student status with the agency for each semester of study within thirty (30) days following the start and within thirty (30) days following the end of each semester, if applicable.

(b) The dependent child or the parent or guardian of the dependent child shall be responsible for repaying any dependent child benefits overpaid due to the failure of the dependent child or parent or guardian of the dependent child to provide the information required by paragraph (a) of this subsection.

(6) Any increases provided under KRS 61.691 and 78.5518 shall be applied to the surviving spouse's duty-related death benefit and payments to a dependent child in determining the total retroactive payments owed to the surviving spouse and dependent child.

(7)

(a) A surviving spouse, dependent child, or parent or guardian of a dependent child shall complete a Form 6130, Authorization for Deposit of Retirement Payment, and file it at the retirement office to have the monthly benefit deposited to an account in a financial institution.

(b) The surviving spouse, dependent child, or parent or guardian of a dependent child and the financial institution shall provide the information and authorizations required for the electronic transfer of funds from the State Treasurer's Office to the designated financial institution.

(8)

(a) At any time while receiving a monthly benefit, the surviving spouse, dependent child, or parent or guardian of a dependent child may change the designated institution by filing a new valid Form 6130, Authorization for Deposit of Retirement Payment, at the retirement office or by submitting new direct deposit information via Self-Service on the Web site maintained by the agency, if available.

(b) The last valid Form 6130, Authorization for Deposit of Retirement Payment, or the last direct deposit information submitted via Self-Service on the Web Site maintained by the agency shall control the electronic transfer of the surviving spouse's or dependent child's monthly benefit.

(9) A surviving spouse, dependent child, or parent or guardian of a dependent child may file a valid Form 6135, Request for Payment by Check, at the retirement office if the surviving spouse, dependent child, or parent or guardian of a dependent child does not currently have an account with a financial institution or the financial institution does not participate in the electronic funds transfer program.

(10) The agency shall not process the retirement allowance or monthly benefit until the surviving spouse, dependent child, or parent or guardian of a dependent child has filed a valid Form 6130, Authorization for Deposit of Retirement Payment, filed a valid Form 6135, Request for Payment by Check, or authorized direct deposit via Self-Service on the Web site maintained by the agency.

Section 14. One-Time Window for Surviving Spouse to Apply for Duty-Related Death Benefits. A surviving spouse of an employee who died prior to retirement and prior to April 13, 2018 who is currently receiving monthly benefits from the agency and who did not seek benefits for an employee's death resulting from a duty-related injury pursuant to KRS 61.621 and 78.545 may apply for duty-related death benefits if the application for duty-related death benefits as provided in Section 3 of this administrative regulation is on file at the retirement office on or before January 1, 2021.

Section 15. Death During Duty-Related Disability Benefits Application Process.

(1)

(a) If an applicant has a valid Form 6000, Notification of Retirement, for duty-related disability benefits on file at the retirement office that complies with Sections 4 and 6 of this administrative regulation, is not receiving monthly early, normal, or disability retirement benefits, and dies prior to being approved for duty-related disability benefits by at least a majority of the medical examiners or by a Final Order of DAC, then the beneficiary named on the Form 6000 shall file the following at the retirement office in accordance with any applicable deadlines in KRS 61.665 and 78.545 to continue with the applicant's application or reapplication for duty-related disability benefits:

1. A Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member;

2. Any outstanding forms required by Section 4 of this administrative regulation that have not yet been filed by the applicant; and

3. Any additional relevant objective medical evidence and a valid Form 8002, Beneficiary Certification of Application for Disability Retirement and Supporting Medical Information.

(b) If there are no applicable deadlines pursuant to KRS 61.665 and 78.545, then the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraph (a) of this subsection shall file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member, within sixty (60) days of the date of the applicant's death.

(c) A beneficiary as described in paragraphs (a) or (b) of this subsection that does not want to continue with the applicant's application or reapplication may file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member.

(d) If the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraphs (a) or (b) of this subsection does not timely file the required documentation, then the Form 6000 shall be invalid and the duty-related disability application or reapplication shall not be processed by the agency.

(2)

(a) If an applicant has a valid Form 6000, Notification of Retirement, for duty-related disability benefits that complies with Sections 4 and 6 of this administrative regulation on file at the retirement office, is receiving monthly early, normal, or disability retirement benefits, and dies prior to being approved for duty-related disability benefits by at least a majority of the medical examiners or by a Final Order of DAC, and no monthly or lump-sum benefits are payable to the beneficiary listed on the Form 6000, then the executor, administrator, or other representative of the applicant's estate shall file the following at the retirement office in accordance with any applicable deadlines in KRS 61.665 and 78.545 to continue with the applicant's application or reapplication for duty-related disability benefits:

1. An order appointing the executor, administrator, or other representative of the applicant's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court;

2. A written statement that the application or reapplication for duty-related disability benefits shall continue;

3. Any outstanding forms required by Section 4 of this administrative regulation that have not yet been filed by the applicant; and

4. Any additional relevant objective medical evidence and a valid Form 8002, Beneficiary Certification of Application for Disability Retirement and Supporting Medical Information.

(b) If none of the deadlines in KRS 61.665 and 78.545 apply, within sixty (60) days of their appointment, the executor, administrator, or other representative of the applicant's estate as described in paragraph (a) of this subsection shall file the following at the retirement office to continue with the applicant's application or reapplication for duty-related disability benefits:

1. A copy of the order appointing the executor, administrator, or other representative of the applicant's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court; and

2. A written statement that the application or reapplication for duty-related disability benefits shall continue.

(c) An executor, administrator, or other representative of the applicant's estate as described in paragraphs (a) or (b) of this subsection that does not want to continue with the applicant's application or reapplication may file the following at the retirement office:

1. A copy of the order appointing the executor, administrator, or other representative of the applicant's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court; and

2. A written statement that the application or reapplication for duty-related disability benefits is withdrawn.

(d) If the executor, administrator, or other representative of the applicant's estate as described in paragraphs (a) or (b) of this subsection does not timely file the required documentation, then the application or reapplication for duty-related disability benefits shall be invalid and shall not be processed by the agency.

(3)

(a) If an applicant has a valid Form 6000, Notification of Retirement, for duty-related disability benefits that complies with Sections 4 and 6 of this administrative regulation on file at the retirement office, is receiving monthly early, normal, or disability retirement benefits, and dies prior to being approved for duty-related disability benefits by at least a majority of the medical examiners or by a Final Order of DAC, and lump sum or monthly benefits are payable to the beneficiary listed on the Form 6000, then the beneficiary named on the Form 6000 shall file the following at the retirement office in accordance with any applicable deadlines in KRS 61.665 and 78.545 to continue with the applicant's application or reapplication for duty-related disability benefits:

1. A Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member;

2. Any outstanding forms required by Section 4 of this administrative regulation that have not yet been filed by the applicant; and

3. Any additional relevant objective medical evidence and a valid Form 8002, Beneficiary Certification of Application for Disability Retirement and Supporting Medical Information.

(b) If there are no applicable deadlines pursuant to KRS 61.665 and 78.545, then the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraph (a) of this subsection shall file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member, within sixty (60) days of the date of the applicant's death.

(c) A beneficiary as described in paragraphs (a) or (b) of this subsection that does not want to continue with the applicant's application or reapplication may file at the retirement office a Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member.

(d) If the beneficiary named on the Form 6000, Notification of Retirement, as described in paragraphs (a) or (b) of this subsection does not timely file the required documentation, then the duty-related disability application or reapplication shall be invalid and shall not be processed by the agency.

Section 16. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6800, "Application for Duty Related/In Line of Duty Death Benefits," April 2021;

(b) Form 6000, "Notification of Retirement," April 2021;

(c) Form 8035, "Employee Job Description," April 2021;

(d) Form 8040, "Prescription and Nonprescription Medications," October 2005;

(e) Form 8001, "Certification of Application for Disability Retirement and Supporting Medical Information," April 2021;

(f) Form 8030, "Employer Job Description," April 2021;

(g) Form 8846, "Travel Voucher for Independent Examination," May 2008;

(h) Form 6448, "Designation of a Dependent Child for Qualifying Total and Permanent Disability," June 2021;

(i) Form 6110, "Affidavit of Authorization to Receive Funds on Behalf of Minor," April 2021;

(j) Form 6130, "Authorization for Deposit of Retirement Payment," April 2021;

(k) Form 6135, "Request for Payment by Check," May 2015;

(l) Form 6458, "Designation of Dependent Child for In Line of Duty/Duty-Related," April 2021;

(m) Form 6008, "Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member," September 2010; and

(n) Form 8002, "Certification of Application for Disability Retirement and Supporting Medical Information," April 2021.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the authority's Web site at https://kyret.ky.gov/Publications/Pages/default.aspx.

History

• RELATES TO: KRS 16.505-16.652, 61.505-61.705, 78.510-78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(f), 61.621
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(f) authorizes the Kentucky Public Pensions Authority to promulgate all administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 61.510 to 61.705, 16.505 to 16.652, and 78.510 to 78.852. KRS 61.621, The Fred Capps Memorial Act, establishes duty-related disability or death benefits for nonhazardous employees who are killed or totally and permanently disabled from a duty-related injury. This administrative regulation establishes the procedure for filing an application or reapplication for duty-related death or disability benefits and the appeal procedure for duty-related death or disability benefits for nonhazardous employees.
• History: 105 KAR 001:310. 28 Ky.R. 1002; eff. 12-19-2001; 29 Ky.R. 778; 1255; eff. 11-12-2002; 32 Ky.R. 393; eff. 11-5-2004; 35 Ky.R. 121; Am. 542; eff. 10-3-2008; Crt eff. 1-29-2020; 48 Ky.R. 866, 2387; eff. 5-31-2022; Recodified to 105 KAR 003:310; eff. 8-5-2026.

105 KAR 3:350 Collection of account under $1,000 by next of kin {#sec-105-kar-3-350 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:350}

Section 1. The survivor who makes demand for the deceased member, retiree, or recipient account shall file with the agency a Form 6826, "Affidavit for Collection of Account Under $1000 by Next of Kin" or other notarized affidavit, and shall confirm or state:

(1) The affidavit is for the collection of deceased member, retiree, or recipient account and is made in accordance with the provisions of KRS 61.703 allowing for the collection of the account without formal administration of the estate;

(2) The date of death of the member, retiree, or recipient, and confirm that ninety (90) days have elapsed since the date of death;

(3) No application or petition for the appointment of a personal representative of the estate of the member, retiree, or recipient is pending or has been granted in any jurisdiction;

(4) The value of the gross estate, wherever located and less liens and encumbrances, of the deceased member, retiree, or recipient does not exceed the exemption amount established in KRS 391.030 or the amount exempt from formal distribution in the state in which the member was domiciled at the time of his or her death;

(5) That the affiant is the surviving spouse; or if none, a surviving child; or if none, a surviving parent; or if none, a surviving brother or sister;

(6) That the affiant is entitled to payment of the account; and

(7) That the Kentucky Public Pensions Authority shall be discharged and held harmless to the same extent as if conducting business with a personal representative; and in the event any person or entity establishes a superior right to the account, the affiant shall acknowledge that he or she, and not the Kentucky Public Pensions Authority, shall be answerable and accountable for the member, retiree, or recipient account to any creditor or appointed personal representative of the estate.

Section 2. The affidavit shall be accompanied by the death certificate, or if no death certificate is available, other acceptable evidence of death of the member, retiree, or recipient.

Section 3. The Kentucky Public Pensions Authority, upon receipt of a properly executed affidavit for collection of account without formal administration of estate accompanied by death certificate, shall make payable to the surviving spouse, child, parent, or brother or sister the assets of the deceased member, retiree, or recipient if the assets due to the estate are less than $1,000.

Section 4. Incorporation by Reference.

(1) Form 6826, "Affidavit for Collection of Account Under $1000 by Next of Kin," 11/2025, Kentucky Public Pensions Authority, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601-6124, Monday through Friday, 8 a.m. to 4:30 p.m. and on the agency's website at kyret.ky.gov.

History

• RELATES TO: KRS 16.505-16.652, 61.505-61.705, 78.510-78.852, 391.030
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.645(9)(e), 61.703(2)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.150(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.703 provides upon the death of a member, retiree, or recipient who has an existing account or other benefit that totals no more than $1,000, a surviving spouse, child, parent, or brother or sister may without formal administration of the estate collect the account by filing an appropriate affidavit, that conforms to the requirements of the administrative regulation promulgated by the board, with the Kentucky Public Pensions Authority. KRS 61.505(1)(g) and 61.645(9)(e) authorize the Kentucky Public Pensions Authority on behalf of Kentucky Retirement Systems and County Employees Retirement System to promulgate administrative regulations that are consistent with and necessary or proper to carry out the provisions of KRS 16.505 to 16.652, 61.505 to 61.705, and 78.510 to 78.852. This administrative regulation establishes the process to file for collection of the account.
• History: 105 KAR 001:350. 29 Ky.R. 835; 1258; eff. 11-12-2002; TAm eff. 3-5-2019; Crt eff. 3-5-2019; 52 Ky.R. 1011, 1511; eff. 6-2-2026; Recodified to 105 KAR 003:350; eff. 8-5-2026.

105 KAR 3:455 In line of duty Hazardous Retirement Disability Benefits {#sec-105-kar-3-455 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:455}

Section 1. Definitions.

(1) "Applicant" means a participant who has applied or is applying for in line of duty (ILOD) disability or total and permanent ILOD disability in accordance with KRS 16.582 and 78.5524.

(2) "Dependent child benefit" means a retirement benefit payable to a dependent child as provided by KRS 16.582(6)(b) and (7)(b) and 78.5524(6)(b) and (7)(b).

(3) "Full-time student" means a person:

(a) Enrolled in a postsecondary program of study that meets the full-time student requirements of the institution in which he or she is enrolled;

(b) Enrolled in a continuing education or training program that meets the full-time requirements of the program or institution in which he or she is enrolled; or

(c) Enrolled in high school or a GED program that meets the full-time student requirements of the program or institution in which he or she is enrolled.

(4) "ILOD disability" means a form of disability retirement benefits that requires a disability that was due to an act in line of duty.

(5) "Medical examiner" means independent physicians licensed in Kentucky who evaluate medical, employment, and other information in accordance with KRS 61.665 and 78.545.

(6) "Retirement benefit" means the retirement allowance as defined by KRS 16.505(12), 61.510(16), and 78.510(16).

(7) "Self-Service Web site" means the secure Member Self-Service or Retiree Self-Service agency Web site at https://myretirement.ky.gov.

(8) "Submit" means the employer required form, documentation, report, or payment has been received by the retirement office via mail, fax, electronic mail, the Employer Self Service Web site, or other mode specifically detailed in this administrative regulation.

(9) "Total and permanent ILOD disability" means a form of disability retirement benefits that requires a total and permanent disability that was due to an act in line of duty.

Section 2. Use of Third-party Vendors. Subject to KRS 61.505(3)(d), the agency may contract with third-party vendors to provide independent, licensed physicians to serve as medical examiners pursuant to KRS 61.665 and 78.545, and additional persons to fulfill non-physician roles throughout the ILOD disability or total and permanent ILOD disability application and review process.

Section 3. Documentation of applicant's last day of paid employment.

(1) The applicant's last day of paid employment shall either be certified by the applicant's employer, or by a written statement filed by the applicant and corroborated by the reporting information received by the agency or the agency's third-party vendor from the applicant's employer.

(2) In accordance with KRS 61.685 and 78.545, the applicant's last day of paid employment may be corrected at any time upon discovery of any error or omission in the agency's records.

Section 4. Time Period Requirements.

(1)

(a) An application or reapplication for ILOD disability or total and permanent ILOD disability shall be filed by the end of day twenty-four (24) months from the applicant's last day of paid employment in a regular full-time position.

(b) The time period for filing shall begin on the day after the last day of paid employment in a regular full-time position and shall end at the end of day on the 730th calendar day.

(2) If the application or reapplication is not filed within the time period prescribed by subsection (1) of this section, except as provided in subsection (3) of this section, then the application or reapplication is not timely, and the applicant shall not qualify for ILOD disability or total and permanent ILOD disability.

(3) If the end of any time period prescribed in this administrative regulation falls on a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the time period shall be met if the application, documentation, form, or other requested information is filed or submitted no later than the end of day on the next business day following the weekend or holiday.

Section 5. Application or Reapplication for ILOD Disability or Total and Permanent ILOD Disability.

(1) An application or reapplication for ILOD disability or total and permanent ILOD disability pursuant to KRS 16.582 and 78.5524 shall be made by completing and filing a valid Form 6000, Notification of Retirement, indicating the applicant's alleged disability is due to an act in line of duty. If available, a Workers' Compensation incident report shall be filed with the Form 6000.

(2)

(a) Once an application or reapplication pursuant to subsection (1) of this section is received by the agency, the agency or its third-party vendor shall notify the applicant of the following additional requirements that shall be completed and filed no later than the end of day 180 calendar days from filing a valid Form 6000:

1. A valid Form 8035, Employee Job Description;

2. A valid Form 8040, Prescription and Nonprescription Medications;

3. All supporting objective medical evidence;

4. A valid Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information; and

5. If the Workers' Compensation incident report was not filed with the application or reapplication, then a Workers' Compensation incident report, or a valid Form 8480, Certification of Statement of Disability – Act in the Line of Duty, indicating one (1) of the following:

a. The applicant is alleging that he or she is disabled due to an act in line of duty, but cannot provide an incident report; or

b. The applicant is not alleging that he or she is disabled due to an act in line of duty. If the applicant indicates he or she is not alleging disability due to an act in line of duty, the application or reapplication will not be reviewed for ILOD disability or total and permanent ILOD disability.

(b) The agency or the agency's third-party vendor shall provide the applicant's employer with a Form 8030, Employer Job Description. The employer shall have until the end of day 180 calendar days from the date of the filed valid Form 6000, Notification of Retirement, to complete and submit the valid Form 8030.

(3) A reapplication for ILOD disability or total and permanent ILOD disability based on the same claim of incapacity shall only be considered if accompanied by new objective medical evidence or new evidence concerning the act in line of duty that was not considered with previous applications.

(4) Once all requirements established in subsections (1) through (3) of this section are on file or submitted, the agency or the agency's third-party vendor shall review and evaluate the documentation. Upon review, the agency or its third-party vendor may request additional information including additional objective medical evidence, information about the applicant's job duties and accommodations, documentation relating to Workers' Compensation claims, police or other crime reports from the employer or applicant, and any other relevant information. If the employer or applicant fail to return the requested information by the end of day sixty (60) calendar days from the date the request for additional information was provided, the agency or the agency's third-party vendor shall make a determination using the information on file.

(5) If the requirements established in this section are:

(a) Filed or submitted within the time periods prescribed in this section, the agency or the agency's third-party vendor shall provide to the medical examiner or examiners the application or reapplication for disability retirement benefits and all forms and documentation received; or

(b) Not on file or submitted within the prescribed time period, the request for ILOD disability or total and permanent ILOD disability shall be void. The Form 6000, Notification of Retirement, shall still be reviewed for other benefits for which the applicant may be entitled.

Section 6. Medical or Psychological Examination Requested at the Expense of the Agency.

(1) The agency or the medical examiner or examiners may request that the applicant complete an independent medical or psychological examination, including a physical or mental functional evaluation or assessment pursuant to KRS 61.665(2)(j) and 78.545, or KRS 61.665(3)(c) and 78.545. If requested, a Form 8025, Authorization for Independent Medical or Psychological Examination and Release of Medical Information, will be provided to the applicant.

(a) The applicant shall complete and file a valid Form 8025 by the end of day sixty (60) calendar days from the date the Form 8025 is provided.

(b) Once the valid Form 8025 is filed, the applicant shall be notified in writing of the date, time, and location of the appointment. Records from the examination shall be used in determining eligibility for ILOD disability, total and permanent ILOD disability, or any other disability benefits for which the applicant may be entitled.

(c) If the applicant fails to file a valid Form 8025 within the prescribed time period, or fails or refuses to complete a scheduled medical or psychological examination, the agency or the agency's third-party vendor shall make a determination using the medical information on file.

(d) If the applicant fails to appear at the medical or psychological examination or fails to cancel the appointment within the time period required in the notice of appointment, the applicant shall be responsible for payment of any charges associated with the medical or psychological examination.

(2)

(a) The agency shall reimburse the applicant for expenses associated with the medical or psychological examination in the same manner as prescribed in 105 KAR 3:210, Section 8.

(b)

1. To receive reimbursement for mileage, actual parking costs, and any actual bridge or highway toll charges, the applicant shall file a valid Form 8846, Travel Voucher for Independent Examination, and all necessary receipts no later than end of day fifteen (15) calendar days from the date of the examination or evaluation.

2. If the applicant fails to file the Form 8846 by the end of day fifteen (15) calendar days from the date of the examination or evaluation, the applicant shall not be eligible for reimbursement.

Section 7. Determining Applicant's Eligibility for ILOD Disability or Total and Permanent ILOD Disability.

(1)

(a) An applicant may qualify for disability retirement benefits if he or she has sixty (60) months of service, twelve (12) of which shall be current service credited under KRS 16.543(1), 61.543(1), and 78.615(1). The service requirements shall be waived for ILOD disability or total and permanent ILOD disability pursuant to KRS 16.582(2)(a) and 78.5524(2)(a).

(b) To be eligible for any type of disability retirement allowance, the applicant shall receive a satisfactory disability determination pursuant to KRS 61.665.

(2)

(a) The agency or the agency's third-party vendor shall evaluate and determine eligibility for ILOD disability or total and permanent ILOD disability in accordance with KRS 16.582 and 78.5524, and shall notify the applicant of the findings.

(b) Prior to determining eligibility for ILOD disability or total and permanent ILOD disability, the agency or the medical examiner or examiners may request that the applicant complete an independent medical or psychological examination in accordance with Section 6 of this administrative regulation.

(3) Denial of ILOD disability, total and permanent ILOD disability, or both.

(a) The applicant shall have until the end of day 180 calendar days from the date the notice of denial is provided to complete one (1) of the options listed in paragraph (b) of this subsection if:

1. The application is denied for ILOD disability, total and permanent ILOD disability, or both; and

a. The applicant did not meet the service requirements for hazardous disability or total and permanent disability pursuant to subsection (1) of this section; or

b. Is approved for hazardous disability or total and permanent disability.

(b)

1. File additional supporting information in accordance with Section 8 of this administrative regulation; or

2. Request a formal hearing in accordance with Section 16 of this administrative regulation to appeal the denial of the ILOD disability, total and permanent ILOD disability, or both.

(c) The applicant shall receive any approved hazardous disability or total and permanent disability within the time period requirements established by Section 11(1) of this administrative regulation while awaiting a determination or during the pendency of the appeal regarding ILOD disability, total and permanent ILOD disability, or both. An adverse determination or denial of the appeal shall not affect the benefits for which the applicant has already been approved or is already receiving.

(4) Approval of ILOD disability and denial of total and permanent ILOD disability.

(a) If the application is approved for ILOD disability, but denied for total and permanent ILOD disability, the applicant shall have until the end of day 180 calendar days from the date the notice of denial is provided to complete one (1) of the following:

1. File additional supporting information in accordance with Section 8 of this administrative regulation; or

2. Request a formal hearing in accordance with Section 16 of this administrative regulation to appeal the denial of the total and permanent ILOD disability.

(b) The applicant shall receive the approved ILOD disability within the time period requirements established by Section 11(1) of this administrative regulation while awaiting a determination or during the pendency of the appeal regarding total and permanent ILOD disability. An adverse determination or denial of the appeal shall not affect the benefits for which the applicant has already been approved or is already receiving.

(5) Denial of ILOD disability, total and permanent ILOD disability, hazardous disability, and total and permanent disability. If the application is denied for ILOD disability, total and permanent ILOD disability, hazardous disability, and total and permanent disability, the applicant shall have until the end of day 180 calendar days from the date the notice of denial is provided to complete one (1) of the following:

(a) File additional supporting information in accordance with Section 8 of this administrative regulation; or

(b) Request a formal hearing in accordance with Section 16 of this administrative regulation to appeal the denial of the ILOD disability, total and permanent ILOD disability, hazardous disability, total and permanent disability, or all that are applicable.

(6)

(a) The denial of ILOD disability or total and permanent ILOD disability may only be appealed if the applicant indicated on the valid Form 6000, Notification of Retirement, or the valid Form 8480, Certification of Statement of Disability – Act In the Line of Duty, that he or she was disabled due to an act in line of duty. Responses on the valid Form 8480 shall supersede responses on the valid Form 6000.

(b) The denial of total and permanent disability alone is not appealable.

(7) Denial of ILOD disability, total and permanent ILOD disability, hazardous disability, or total and permanent disability shall not affect any other benefits to which the applicant may be entitled.

Section 8. Additional Supporting Information.

(1)

(a) Upon denial of ILOD disability or total and permanent ILOD disability in accordance with Section 7 of this administrative regulation, the agency or its third-party vendor shall provide the applicant with a Form 8001, Certification of Application for Disability Retirement and Supporting Medical Information.

(b) The agency or its third-party vendor shall review and evaluate the additional supporting information upon receipt of the valid Form 8001 and additional supporting information, including additional medical information, information about his or her job duties and accommodations, documentation relating to Workers' Compensation claims, police or other crime reports, or other required documentation, if filed within the required time period.

(2) Once the agency or its third-party vendor completes the evaluation of the additional supporting information, the agency or its third-party vendor shall make a determination and notify the applicant of the findings.

(a)

1. The applicant shall have until the end of day 180 calendar days from the date the notice of denial is provided to request a formal hearing in accordance with Section 16 of this administrative regulation to appeal the denial of the ILOD disability, total and permanent ILOD disability, or both, if the applicant:

a. Is denied for ILOD disability, total and permanent ILOD disability, or both; and

b. Does not meet the service requirements for hazardous disability or total and permanent disability pursuant to Section 7(1) of this administrative regulation; or

c. Is approved for hazardous disability or total and permanent disability.

2. The applicant shall receive any approved hazardous disability or total and permanent disability within the time period requirements established by Section 11(1) of this administrative regulation during the pendency of appeal regarding ILOD disability, total and permanent ILOD disability, or both. A denial of the appeal shall not affect the benefits for which the applicant has already been approved or is already receiving.

(b)

1. If the application is approved for ILOD disability, but denied for total and permanent ILOD disability, the applicant shall have until the end of day 180 calendar days from the date the notice of denial is provided to request a formal hearing in accordance with Section 16 of this administrative regulation to appeal the denial of the total and permanent ILOD disability.

2. The applicant shall receive the approved ILOD disability within the time period requirements established by Section 11(1) of this administrative regulation during the pendency of the appeal regarding total and permanent ILOD disability. A denial of the appeal shall not affect the benefits for which the applicant has already been approved or is already receiving.

(c) Except as provided in Section 7(6) of this administrative regulation, if the application is denied for ILOD disability, total and permanent ILOD disability, and hazardous disability, the applicant shall have until the end of day 180 calendar days from the date the notice of denial is provided to request a formal hearing in accordance with Section 16 of this administrative regulation to appeal the following:

1. Denial of the ILOD disability;

2. Total and permanent ILOD disability;

3. Hazardous disability; or

4. All that are applicable.

Section 9. Reapplication for ILOD Disability or Total and Permanent ILOD Disability While Prior Application or Reapplication is Pending.

(1) If a reapplication for ILOD disability or total and permanent ILOD disability that complies with KRS 16.582 and 78.5524 and Section 5 of this administrative regulation is filed while a prior application or reapplication is pending or within the statutory time periods for appeal, the agency shall process according to the following:

(a) If there is a prior application or reapplication pending a determination, including when the applicant has submitted additional supporting information and the information is pending a determination as prescribed in Section 8 of this administrative regulation, then the subsequent reapplication shall be accepted solely for the purpose of designating a new beneficiary in accordance with KRS 61.542(4) and 78.545, and shall not be reviewed.

(b) If there is a prior denial that is still within the statutory time period to appeal the determination and the applicant has not submitted additional supporting information as prescribed in Section 8 of this administrative regulation or requested an appeal in accordance with Section 16 of this administrative regulation, then:

1. The subsequently filed reapplication shall be found as a notice of intent to not submit additional supporting information or request an administrative hearing to appeal the previous denial determination; and

2. The reapplication shall be processed by the agency in accordance with this administrative regulation unless the applicant files a written statement indicating the subsequently filed reapplication was filed solely for the purpose of designating a new beneficiary in accordance with KRS 61.542(4) and 78.545. The written statement shall be filed by the end of day fifteen (15) calendar days from the date of the notice indicated in subsection (2) of this section.

(c) If there is a prior denial, the applicant has requested an administrative hearing to appeal the denial, and it is prior to a Final Order of the Disability Appeals Committee (DAC), then:

1. The subsequently filed reapplication shall be found as a notice of intent to dismiss the request for an administrative hearing;

2. The reapplication shall be processed by the agency in accordance with this administrative regulation unless the applicant files a written statement indicating the subsequently filed reapplication has been filed solely for the purpose of designating a new beneficiary in accordance with KRS 61.542(4) and 78.545. The written statement shall be filed by the end of day fifteen (15) calendar days from the date of the notice indicated in subsection (2) of this section; and

3. The subsequently filed reapplication shall not be reviewed by the agency until thirty-one (31) calendar days after the entry of a Final Order of DAC dismissing the previously requested administrative hearing to appeal, except that a new beneficiary designated on the subsequently filed reapplication in accordance with KRS 61.542 and 78.545 shall be effective immediately.

(d)

1. If there is a prior denial, a Final Order of DAC has been issued affirming the prior denial, and the applicant has requested an appeal of the Final Order or is within the statutory time period to do so, then the subsequently filed reapplication shall be accepted solely for the purpose of designating a new beneficiary in accordance with KRS 61.542(4) and 78.545. The reapplication shall not be reviewed unless the applicant files one (1) of the following by the end of day fifteen (15) calendar days from the date of the notice indicated in subsection (2) of this section:

a. A written statement that he or she shall not appeal the Final Order of DAC; or

b. A final unappealable Order of a court with jurisdiction over the matter.

2. If the applicant files the documentation indicated in subparagraph 1.a. or b. of this paragraph, then the subsequently filed reapplication shall be reviewed by the agency thirty-one (31) calendar days after the entry of a Final Order of DAC, or after a final unappealable Order of a court with jurisdiction over the matter has been entered.

(2) If a subsequent reapplication for ILOD disability or total and permanent ILOD disability that complies with Section 5 of this administrative regulation is filed, the applicant may receive notification of how the reapplication shall be administered based on the status of the previously filed application or reapplication and in accordance with subsection (1) of this section.

Section 10. Voiding the Form 6000, Notification of Retirement.

(1) The Form 6000, Notification of Retirement, shall be void if:

(a) The Form 6000 is invalid or withdrawn;

(b) The applicant is approved for benefits, but fails to complete the requirements of Section 11 of this administrative regulation;

(c) The applicant died during the pendency of a determination, is approved for benefits after his or her death, and the beneficiary, representative of the deceased applicant's estate, or trustee fails to complete the requirements of Section 14 of this administrative regulation; or

(d) The Form 6000 does not result in the applicant receiving a retirement benefit and all applicable time periods to appeal as provided in Sections 7 through 9 of this administrative regulation have expired.

(2)

(a) If an applicant's Form 6000, Notification of Retirement, is void, the beneficiary or beneficiaries and contingent beneficiary or beneficiaries designated on the most recently filed valid Form 2035, Beneficiary Designation, shall remain in full force and effect, except as provided in paragraph (b) of this subsection.

(b) If the applicant was receiving an ongoing benefit based on a previously filed valid Form 6000, Notification of Retirement, then the beneficiary or beneficiaries and contingent beneficiary or beneficiaries designated on the Form 6000 indicated in this paragraph shall remain in full force and effect.

Section 11. Administration of Benefits Upon Approval of ILOD Disability or Total and Permanent ILOD Disability.

(1)

(a) Once an applicant is approved for hazardous disability, total and permanent disability, ILOD disability, or total and permanent ILOD disability, the applicant shall complete all requirements to begin receiving the benefit for which he or she was approved no later than six (6) months from the date the notice of approval was provided in accordance with KRS 61.590(5)(b) and 78.545. Appealing the denial of ILOD disability or total and permanent ILOD disability, or both, does not affect this requirement.

(b) If the applicant does not comply with paragraph (a) of this subsection, the applicant shall forfeit his or her right to the benefit for which he or she was approved, and shall have no right to appeal the forfeiture. This shall not preclude the applicant from:

1. Filing a reapplication for hazardous disability, ILOD disability, or total and permanent ILOD disability in accordance with KRS 16.582 and 78.5524, 105 KAR 3:210, and this administrative regulation; or

2. Filing for or receiving any other benefits that he or she may be eligible to receive.

(2) If the applicant received Social Security or Workers' Compensation benefits during the pendency of a determination, the applicant shall file detailed documentation of the benefits received in accordance with KRS 61.607, KRS 78.5530, and 105 KAR 3:210, Section 9.

(3) The agency shall provide the applicant the monthly payment options, as provided in 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852, available on the Form 6010, Estimated Retirement Allowance. An applicant that was awarded Social Security or Workers' Compensation benefits during the pendency of a determination shall not be provided the Form 6010 until he or she complies with the requirements of subsection (2) of this section.

(a) The applicant shall complete and file a valid Form 6010 by the end of day six (6) months from the date the notification of approval for benefits was provided pursuant to KRS 61.590(5) and 78.545.

(b)

1. If the applicant selects an actuarial refund retirement payment option, lump-sum refund of the accumulated account balance, or partial lump-sum retirement payment option, he or she shall complete and file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, selecting the option for payment.

2. If the applicant intends to have the funds rolled over directly into an IRA or other qualified plan, the applicant shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025 certifying that the rollover will be accepted.

(4)

(a) Approved benefits shall be paid retroactive to the first of the month following the month of the applicant's last day of paid employment in a regular full-time position.

(b) Any increases provided under KRS 61.691 and 78.5518 shall be applied to the applicant's ILOD disability or total and permanent ILOD disability, as applicable, in determining the total retroactive payments owed and the monthly retirement allowance.

(5) Payment for benefits owed during the pendency of approval of ILOD disability or total and permanent ILOD disability shall be calculated accordingly:

(a) If the applicant did not receive any retirement benefits during the pendency of the approval, the applicant shall receive a payment for the retroactive period as prescribed in subsection (4) of this section.

(b)

1. If the applicant received other retirement benefits based on the same last date of paid employment during the pendency of the approval, the agency shall calculate and pay to the applicant the difference between the retirement benefit which was paid to the applicant and the ILOD disability or total and permanent ILOD disability payment owed.

2. The applicant shall not change the beneficiary named or the payment option selected upon early, normal, or any disability retirement benefit, except as provided in KRS 61.542(5)(a) and (b), and 78.545.

(c) If the applicant received Social Security or Workers' Compensation benefits, the agency shall calculate payment in accordance with 105 KAR 3:210, Section 9.

(6) Upon the completion of all requirements of this section and Section 13 of this administrative regulation, the applicant shall receive any applicable backpay and begin receiving the retirement benefit owed.

Section 12. Requirements for Dependent Child Benefits.

(1) If dependent child benefits are payable to a dependent child, each eligible dependent child or his or her parent or guardian shall file the following documents:

(a)

1. If the applicant is approved for ILOD disability, a valid Form 6456, Designation of Dependent Child; or

2. If the applicant is approved for total and permanent ILOD disability, a valid Form 6448, Designation of Dependent Child for Qualifying Total and Permanent Disability.

(b) If the dependent child is age eighteen (18) or over and a full-time student, written verification of full-time student status;

(c)

1. If the dependent child is age eighteen (18) or over and receives federal Social Security disability benefits, a copy of the most recent statement issued by the Social Security Administration indicating the dependent child is disabled; or

2. If the dependent child is being claimed as a qualifying child for tax purposes due to the dependent child's total and permanent disability, a copy of the applicant's most recent tax return showing the dependent child is totally and permanently disabled for tax purposes, or duly appointed order of the court specifying the dependent child is a disabled dependent child of the applicant;

(d)

1. A copy of the dependent child's birth certificate; or

2. A final order or decree of adoption which shall include his or her date of birth or other reliable proof of date of birth that may be used by the courts to verify date of birth; and

(e) If a dependent child is less than eighteen (18) years of age, a valid Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the dependent child has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, the guardian or conservator shall file a copy of the court order appointing the guardian or conservator.

(2)

(a) After the dependent child begins receiving dependent child benefits, the dependent child or the parent or guardian of the dependent child shall:

1. Notify the agency of the death or marriage of the dependent child;

2. If applicable, notify the agency if the dependent child ceases to be a full-time student;

3. If applicable, file a copy of the dependent child's written verification of full-time student status with the agency for each semester of study by the end of day thirty (30) calendar days following the start and by the end of day thirty (30) calendar days following the end of each semester; and

4. If applicable, notify the agency if the dependent child's disability status changes.

(b) The dependent child and the parent or guardian of the dependent child shall be responsible for repaying any dependent child benefits overpaid due to the failure of the dependent child or parent or guardian of the dependent child to provide the information required by paragraph (a) of this subsection.

(3)

(a) Upon the completion of all requirements of this section and Section 13 of this administrative regulation, the dependent child shall begin receiving the benefit owed.

(b) Approved benefits shall be paid retroactive to the first of the month following the month of the applicant's last day of paid employment in a regular full-time position.

(c) Any increases provided under KRS 61.691 and 78.5518 shall be applied to the dependent child's benefits in determining the total retroactive payments owed and the monthly retirement allowance.

(d) Payment for benefits owed during the pendency of approval of ILOD disability or total and permanent ILOD disability shall be calculated accordingly:

1. If the dependent child did not receive dependent child benefits during the pendency of the approval, he or she shall receive a payment for the retroactive period as prescribed in paragraph (b) of this subsection.

2. If the dependent child received other dependent child benefits based on the same last date of paid employment during the pendency of the approval, the agency shall calculate and pay to the dependent child the difference between the dependent child benefit which was paid and the dependent child benefit owed.

Section 13. Distribution of Payments.

(1) The agency shall not disperse payment until the requirements of either subsection (2) or (3) of this section are complete and on file.

(2)

(a) Except as provided in subsection (3) of this section, to begin receiving payment, the applicant, beneficiary, representative of the deceased applicant's estate, trustee, dependent child, or parent or guardian of a dependent child, as applicable, shall authorize direct deposit to an account in a financial institution in the following way:

1. File a valid Form 6130, Authorization for Deposit of Retirement Payment, provide direct deposit information on the valid Form 6000, Notification of Retirement, or authorize direct deposit via the Self-Service Web site; and

2. Provide the information and authorizations required for the electronic transfer of funds from the State Treasurer's Office to the designated financial institution, including any authorizations or information needed from the financial institution.

(b) At any time while receiving a monthly benefit, a recipient may change the designated institution by completing and filing a new valid Form 6130, Authorization for Deposit of Retirement Payment, or by updating the authorization for deposit of retirement payments on the Self-Service Web site.

(3) If the applicant, beneficiary, dependent child, or parent or guardian of a dependent child, as applicable, does not currently have an account with a financial institution, or his or her financial institution does not participate in the electronic funds transfer program, the applicant may receive benefits by check. To receive benefits by check, an applicant, beneficiary, dependent child, or the parent or guardian of a dependent child, as applicable, shall file a valid Form 6135, Request for Payment by Check.

(4) The most recently filed valid Form 6130, Authorization for Deposit of Retirement Payment, authorization for deposit of retirement payments on the Self-Service Web site, or valid Form 6135, Request for Payment by Check, shall control the payment or electronic transfer designation of the payable benefits.

Section 14. Death During ILOD Disability or Total and Permanent ILOD Disability Application Process.

(1) If the beneficiary is an estate, a duly entered or certified court order from a court with jurisdiction appointing the representative of the applicant's estate shall be on file.

(2) If the beneficiary is a trustee, a duly executed trust appointing him or her as the trustee shall be on file.

(3)

(a) If an applicant dies prior to being fully approved for ILOD disability or total and permanent ILOD disability;

(b) A valid Form 6000, Notification of Retirement, that complies with Section 5 of this administrative regulation is on file; and

(c) The time period requirements established in Sections 4 through 9 of this administrative regulation have not expired; then:

1. In order to proceed with the application or reapplication, the beneficiary named on the valid Form 6000, or the representative of the deceased applicant's estate or trust as applicable, shall file the following within the time period requirements established by this administrative regulation:

a. Any outstanding forms or documents required by Sections 5 through 9 of this administrative regulation; and

b. Any additional relevant objective medical evidence and a valid Form 8002, Certification of Application for Disability Retirement and Supporting Medical Information.

2. To have the rights specified in subclauses i.-iv. of clause b. of this subparagraph:

a. The beneficiary shall file a valid Form 6008, Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member; or

b. If there are no monthly or lump-sum benefits payable to the beneficiary listed on the Form 6000 or the designated beneficiary is the estate or trust, the representative of the applicant's estate or trustee shall file a written statement that the application or reapplication for ILOD disability or total and permanent ILOD disability shall continue or be withdrawn as applicable.

i. The right to continue the application or reapplication, whether or not additional forms or documentation are needed. The beneficiary, or the representative of the deceased applicant's estate or trust as applicable, shall be subject to subsections (4) and (5) of this section prior to payment of a disability retirement benefit owed.

ii. The right to withdraw the application or reapplication whether or not additional forms or documentation are needed. If the required documentation as prescribed in this subsection is not on file within the time period requirements established in Sections 5 through 9 of this administrative regulation, the application or reapplication shall be withdrawn automatically. Withdrawal of the application or reapplication may impact the beneficiary as prescribed in Section 10(2) of this administrative regulation.

iii. The right to submit additional supporting information in accordance with Section 8 of this administrative regulation if there is a denial of disability retirement benefits of any kind. The required documentation as prescribed in this subsection shall be on file within the time period requirements to submit additional supporting information as provided in Section 8 of this administrative regulation. iv. The right to request an administrative hearing if there is a denial of disability retirement benefits of any kind. The required documentation as prescribed in this subsection shall be on file within the time period requirements to request an administrative hearing as provided in Sections 5 through 9 of this administrative regulation.

3. If the beneficiary, or the representative of the deceased applicant's estate or trust as applicable, does not file the required forms and documentation within the time periods required by this administrative regulation and KRS 61.665 and 78.545, then the application or reapplication for disability retirement benefits of any kind shall not be processed by the agency.

(4) If the beneficiary, representative of the deceased applicant's estate, or trustee provides all needed forms and documentation as provided in subsection (1) of this section and Section 11(2) of this administrative regulation, and benefits are approved:

(a) The agency shall provide the beneficiary, or the representative of the deceased applicant's estate or trust as applicable, with a Form 6810, Certification of Beneficiary. The beneficiary, or the representative of the deceased applicant's estate or trust as applicable, shall complete and file a valid Form 6810.

(b) If the applicant was not receiving a retirement benefit prior to his or her death, the agency shall provide the beneficiary, or the representative of the deceased applicant's estate or trust as applicable, with the payment options available on the Form 6010, Estimated Retirement Allowance. The beneficiary, or the representative of the deceased applicant's estate or trust as applicable, shall complete and file a valid Form 6010.

1. If the beneficiary, representative of the deceased applicant's estate, or trust is eligible for and selects an actuarial refund retirement payment option, lump-sum refund of the accumulated account balance, or partial lump-sum retirement payment option, he or she shall complete and file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, indicating the payment option elected.

2. If the beneficiary, representative of the deceased applicant's estate, or trustee intends to have the funds rolled over directly into an IRA or other qualified plan, the beneficiary, representative of the deceased applicant's estate, or trustee shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025 certifying that the rollover will be accepted.

(c) If the applicant was receiving a retirement benefit prior to his or her death, the beneficiary, the deceased applicant's estate, or trust shall receive benefits based on the payment option designated by the applicant.

(d) Upon the completion of all requirements of this section and Section 13 of this administrative regulation, the beneficiary, the deceased applicant's estate, or trust shall receive or begin receiving the benefit owed.

(5)

(a) If the applicant received any retirement benefits while awaiting a disability determination of any kind, a beneficiary that is not the deceased applicant's estate or trust is not eligible to receive the difference between what the applicant already received and the disability back payments owed for the time period from the applicant's disability retirement date through the end of the month in which the applicant died. When this occurs, the deceased applicant's estate or trust shall receive any back payment owed for the time period indicated in this paragraph.

(b) If the applicant never received retirement benefits of any kind, the beneficiary, or the representative of the deceased applicant's estate or trust as applicable, is eligible to receive the disability back payments owed for the time period from the applicant's disability retirement date through the date of approval of the disability retirement benefit.

Section 15. Recipient's ILOD Disability or Total and Permanent ILOD Disability Discontinued Upon Review. If, upon review in accordance with KRS 61.610, 61.615, 78.5528, or other applicable statute, the agency or its third-party vendor determines:

(1) A recipient of total and permanent ILOD disability no longer meets eligibility requirements, then the agency or its third-party vendor shall determine if the recipient is qualified and remains eligible for ILOD disability in accordance with KRS 16.582 and 78.5524, and this administrative regulation; or

(2) A recipient of ILOD disability no longer meets eligibility requirements, then the agency shall determine if the recipient is qualified and remains eligible for early or normal retirement benefits in accordance with KRS 61.592 and 78.5520.

Section 16. Right to Appeal.

(1) In accordance with KRS 61.665 and 78.545, a request for a formal hearing to appeal a denial or discontinuance determination shall be made by filing a written request containing a short and plain statement of the issues being appealed.

(2) The hearing shall be conducted in accordance with KRS Chapter 13B and 105 KAR 1:215.

(3) The hearing officer presiding over an administrative hearing shall review the administrative record and any records introduced at the administrative hearing.

(a) The determination of other state and federal agencies' approval of benefits including the Kentucky Department of Workers' Claims and the Social Security Administration, may support a final determination if accompanied by underlying objective medical evidence or vocational evidence.

(b) Written statements from medical providers within the administrative record shall not themselves be objective medical evidence, but may be relied upon if accompanied by, and reviewed in concert with, other supporting objective medical evidence.

(4) The final determination shall not be bound by factual or legal findings of other state or federal agencies. The final determination shall be based on objective medical evidence and vocational records, including objective medical evidence and vocational records contained within or that accompany a determination by another state or federal agency.

(5) Once a final determination is issued, the person who filed the appeal shall be notified of the final order of the Disability Appeals Committee (DAC) in accordance with KRS 61.615(3)(g) and 78.5528(3)(g).

(6) All evidentiary filings made during an administrative hearing process to appeal the denial of an application or reapplication shall be included in the information reviewed in a subsequently filed reapplication.

Section 17. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 2035, "Beneficiary Designation", updated September 2022;

(b) Form 6000, "Notification of Retirement", updated June 2023;

(c) Form 6008, "Beneficiary Election to Continue Disability Application Process on Behalf of Deceased Member", updated November 2023;

(d) Form 6010, "Estimated Retirement Allowance", updated April 2021;

(e) Form 6025, "Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution", updated June 2023;

(f) Form 6110, "Affidavit of Authorization to Receive Funds on Behalf of Minor", updated June 2023;

(g) Form 6130, "Authorization for Deposit of Retirement Payment", updated June 2023;

(h) Form 6135, "Request for Payment by Check", updated June 2023;

(i) Form 6448, "Designation of Dependent Child for Qualifying Total and Permanent Disability", updated November 2023;

(j) Form 6456, "Designation of Dependent Child", updated November 2023;

(k) Form 6810, "Certification of Beneficiary", updated April 2021;

(l) Form 8001, "Certification of Application for Disability Retirement and Supporting Medical Information", updated November 2023;

(m) Form 8002, "Certification of Application for Disability Retirement and Supporting Medical Information", updated November 2023;

(n) Form 8025, "Authorization for Independent Medical or Psychological Examination and Release of Medical Information", updated November 2023;

(o) Form 8030, "Employer Job Description", updated June 2023;

(p) Form 8035, "Employee Job Description", updated November 2023;

(q) Form 8040, "Prescription and Nonprescription Medications", updated November 2023;

(r) Form 8480, "Certification of Statement of Disability – Act in the Line of Duty", updated November 2023; and

(s) Form 8846, "Travel Voucher for Independent Examination", updated November 2023.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8:00 a.m. to 4:30 p.m. This material is also available on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 2.110, 16.505-16.652, 61.505, 61.510-61.705, 78.510-78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(g), (3)(d)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 16.582 and 78.5524 establish hazardous disability retirement benefits for employees in hazardous positions who are disabled from an act in line of duty. This administrative regulation establishes the procedures for filing an application or reapplication for in line of duty hazardous disability retirement benefits and total and permanent in line of duty hazardous disability retirement benefits, and the appeal procedures if denied.
• History: 105 KAR 001:455. 50 Ky.R. 1614, 2008; eff. 7-2-2024; Recodified to 105 KAR 003:455; eff. 8-5-2026.

105 KAR 3:457 In-line-of-duty survivor benefits {#sec-105-kar-3-457 omnilex-key=us-ky-regs-official--title-105--105 KAR 3:457}

Section 1. Definitions.

(1) "Contingent eligible beneficiary" means a person that meets the requirements to be an eligible beneficiary, except that he or she is superseded by a different eligible beneficiary.

(2) "Eligible beneficiary" means a person who meets the eligibility qualifications for in-line-of-duty survivor benefits as provided by KRS 16.601(1)-(3) and 78.5534(1)-(3).

(3) "Submit" means the required form, documentation, report, or payment has been received by the retirement office via mail, fax, electronic mail, the Employer Self Service Web site, or other mode specifically detailed in this administrative regulation.

Section 2. Use of Third-party Vendors.

(1) KRS 61.505(3)(d) authorizes the agency to contract with third-party vendors to act on its behalf throughout the in-line-of-duty survivor benefit application and review process.

(2) The agency may utilize independent, licensed physicians provided by third-party vendors to serve as medical examiners pursuant to KRS 61.665 and 78.545. Third-party vendors may provide additional persons to fulfill non-physician roles throughout the in-line-of-duty survivor benefit application process.

(3) Third-party vendors may act on behalf of the agency and the systems with all the rights and responsibilities therein.

Section 3. Requesting In-line-of-duty Survivor Benefits.

(1)

(a) In-line-of-duty survivor benefits pursuant to KRS 16.601 and 78.5534 may be requested for an eligible beneficiary by filing a written request that shall include:

1. Member's name and date of birth or other identifying number;

2. Member's date of death;

3. Employer's name and circumstance surrounding the member's death; and

4. Name, relationship, and contact information for the person making the request.

(b) If the agency becomes aware of a hazardous position employee's death potentially resulting from an act in-line-of-duty, the agency or the agency's third-party vendor may notify an eligible beneficiary, or his or her parent or legal guardian, of his or her ability to file a written request for in-line-of-duty survivor benefits.

(2) If the agency becomes aware of a hazardous position employee's death potentially resulting from an act in-line-of-duty, the agency or the agency's third-party vendor shall notify the member's employer of the following requirements that shall be completed and submitted to the agency or the agency's third-party vendor:

(a) A copy of the deceased member's death certificate;

(b) The employer's death investigation report;

(c) A detailed position description or a valid Form 8030, Employer Job Description; and

(d) A valid Form 6800, Application for Duty Related/In-Line-of-Duty Survivor Benefits, certified by the deceased member's immediate supervisor and agency head.

(3) If requested by the agency or the agency's third-party vendor, the eligible beneficiary or his or her parent or legal guardian, or the employer, shall respectively file or submit any additional information including additional medical information, autopsy or other medical records, information about the member's job duties and accommodations, documentation relating to workers' compensation claims, and police or other crime reports.

Section 4. Determining Eligibility for In-line-of-duty Survivor Benefits.

(1) Once all forms and documentation required by Section 3 of this administrative regulation are on file, the agency or the agency's third-party vendor shall evaluate and make a determination regarding in-line-of-duty survivor benefits pursuant to KRS 16.601 and 78.5534. The agency or the agency's third-party vendor shall notify the eligible beneficiary, or his or her parent or legal guardian, of the findings.

(2) If in-line-of-duty survivor benefits are approved, the eligible beneficiary, or his or her parent or legal guardian, shall complete all requirements in Sections 6 to 8 of this administrative regulation prior to any benefits beginning.

(3)

(a) If in-line-of-duty survivor benefits are denied, the eligible beneficiary, or his or her parent or legal guardian, shall have until the end of day 180 calendar days from the date the notice of denial is mailed to complete one (1) of the following:

1. Submit additional supporting information in accordance with Section 5 of this administrative regulation; or

2. Request a formal hearing to appeal the decision in accordance with Section 10 of this administrative regulation.

(b) Denial of in-line-of-duty survivor benefits shall not affect any other benefits to which an eligible beneficiary may be entitled.

Section 5. Additional Supporting Information After Denial.

(1) If the eligible beneficiary, or his or her parent or legal guardian, files additional supporting information including additional medical information, autopsy or other medical records, information about the member's job duties and accommodations, documentation relating to Workers' Compensation claims, police or other crime reports, or other required documentation by the end of day 180 calendar days from the date of a denial of in-line-of-duty survivor benefits, the agency or the agency's third-party vendor shall review and evaluate the additional supporting information.

(2) Once the agency or the agency's third-party vendor completes the evaluation of the additional supporting information provided in accordance with subsection (1) of this section, the agency or the agency's third-party vendor shall make a determination and notify the eligible beneficiary of the findings.

(a) If the application for in-line-of-duty survivor benefits is approved, the eligible beneficiary, or his or her parent or legal guardian, shall complete all requirements in Sections 6 to 8 of this administrative regulation prior to any benefits beginning.

(b) If the findings indicate the additional supporting information filed failed to provide enough evidence to approve in-line-of-duty survivor benefits, the in-line-of-duty survivor benefits shall be denied, and the eligible beneficiary, or his or her parent or legal guardian, shall have 180 calendar days from the date the notification of denial is mailed to request a formal hearing to appeal the findings in accordance with Section 10 of this administrative regulation.

Section 6. Election of Benefits.

(1) An eligible beneficiary who has been approved for in-line-of-duty survivor benefits in accordance with Section 4 or 5 of this administrative regulation shall have the option to select either in-line-of-duty survivor benefits pursuant to KRS 16.601(1)-(3) and 78.5534(1)-(3) or any other type of benefit under the provisions of KRS 16.505-16.582 and 78.510-78.852.

(2) If the deceased member's accumulated account balance has been withdrawn by his or her beneficiary pursuant to KRS 16.578, 61.592(4), and 78.5532, a beneficiary shall not be eligible for in-line-of-duty survivor benefits.

(3) While an application for in-line-of-duty survivor benefits is pending, but not approved, a potential eligible beneficiary may elect to receive benefits under KRS 16.578(2)(a) or (b), 61.592(4), or 78.5532(2)(a) or (b). If the potential eligible beneficiary is approved for in-line-of-duty survivor benefits, the agency shall determine what is owed to the eligible beneficiary in accordance with KRS 16.601(6) and 78.5534(6).

Section 7. Requirements to Receive In-line-of-duty Survivor Benefits.

(1) The agency shall provide the eligible beneficiary, or his or her parent or legal guardian, with a Form 6810, Certification of Beneficiary. The eligible beneficiary, or his or her parent or legal guardian, shall complete and file a valid Form 6810.

(2) The agency shall provide the eligible beneficiary, or his or her parent or legal guardian, the monthly payment options available on the Form 6010, Estimated Retirement Allowance. The eligible beneficiary, or his or her parent or legal guardian, shall complete and file a valid Form 6010.

(3)

(a) If the eligible beneficiary, or his or her parent or legal guardian, elects the in-line-of-duty survivor benefit option that includes the one-time payment of $10,000, the eligible beneficiary, or his or her parent or legal guardian, shall be given the option to receive the payment as either a direct rollover or as a direct payment. The eligible beneficiary, or his or her parent or guardian, shall complete and file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, indicating the payment option elected.

(b) If the eligible beneficiary, or his or her parent or legal guardian, intends to have the funds rolled over directly into an IRA or other qualified plan, the eligible beneficiary, or his or her parent or legal guardian, shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025 certifying that the rollover will be accepted.

(4) If an eligible beneficiary is a spouse, he or she shall file the following documents:

(a) A copy of his or her certificate of marriage to the member; and

(b) Proof of his or her date of birth by filing one (1) of the following:

1. Age record of the Social Security Administration;

2. Immigration and naturalization service records;

3. Birth certificate;

4. Military discharge;

5. U.S. passport:

6. Driver's license issued by the Commonwealth of Kentucky; or

7. Other reliable proof of date of birth that may be used by the courts to verify date of birth.

(5) If an eligible beneficiary is a dependent child, each dependent child, or his or her parent or legal guardian, shall file the following documents:

(a) A valid Form 6458, Designation of Dependent Child for In Line of Duty/Duty-Related;

(b) If a dependent child is under the age of eighteen (18), a valid Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the dependent child has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, the guardian or conservator shall file a copy of the court order appointing the guardian or conservator.

(c) If the dependent child is age eighteen (18) or over and a full-time student, verification of full-time student status;

(d) If the dependent child is age eighteen (18) or over and receives federal Social Security disability benefits, a copy of the most recent statement issued by the Social Security Administration indicating the dependent child is disabled; or if the dependent child is being claimed as a qualifying child for tax purposes due to the dependent child's total and permanent disability, a copy of the deceased member's most recent tax return showing the dependent child was totally and permanently disabled for tax purposes, or duly appointed order of the court specifying the dependent child is a disabled dependent child of the deceased member; and

(e)

1. A copy of the dependent child's birth certificate; or

2. A final order or decree of adoption which shall include his or her date of birth or other reliable proof of date of birth that may be used by the courts to verify date of birth.

(6) If an eligible beneficiary is a dependent as provided by KRS 16.601(3) and 78.5534(3), each dependent, or each dependent's parent or legal guardian, shall file the following:

(a) A copy of the deceased member's most recent tax return showing the dependent was the deceased member's qualifying dependent for tax purposes, or duly appointed order of the court specifying the dependent is a dependent of the deceased member.

(b) If the dependent is under the age of eighteen (18), a valid Form 6110, Affidavit of Authorization to Receive Funds on Behalf of Minor. If the dependent has a court appointed guardian or conservator and the court appointed guardian or conservator completed the Form 6110, the guardian or conservator shall file a copy of the court order appointing the guardian or conservator; and

(c) Proof of his or her date of birth by filing one (1) of the following:

1. Age record of the Social Security Administration;

2. Immigration and naturalization service records;

3. Birth certificate;

4. Military discharge;

5. U.S. passport:

6. Driver's license issued by the Commonwealth of Kentucky; or

7. Other reliable proof of date of birth that may be used by the courts to verify date of birth.

(7) A contingent eligible beneficiary shall provide proof that he or she is the eligible beneficiary. The agency shall not process benefits for a contingent eligible beneficiary unless the following requirements are met:

(a) If the agency identified eligible beneficiary is deceased, a copy of his or her death certificate shall be on file; or

(b) If the agency identified eligible beneficiary was divorced from the deceased member, a copy of the divorce decree shall be on file.

Section 8. Distribution of Payments.

(1) The agency shall not disburse payment for in-line-of-duty survivor benefits until the eligible beneficiary, or his or her parent or legal guardian, has completed the requirements of either subsection (2) or (3) of this section.

(2)

(a) To receive in-line-of-duty survivor benefits the eligible beneficiary, or his or her parent or legal guardian, shall authorize direct deposit to an account in a financial institution by:

1. Filing a valid Form 6130, Authorization for Deposit of Retirement Payment; and

2. Providing the information and authorizations required for the electronic transfer of funds from the State Treasurer's Office to the designated financial institution, including any authorizations or information needed from the financial institution.

(b) At any time while receiving a monthly benefit, the eligible beneficiary, or his or her parent or legal guardian, may change the designated institution by completing and filing a new valid Form 6130, Authorization for Deposit of Retirement Payment, or by updating the authorization for deposit of retirement payments on the Member Self-Service Web site maintained by the agency.

(3) If the eligible beneficiary, or his or her parent or legal guardian, does not currently have an account with a financial institution, or his or her financial institution does not participate in the electronic funds transfer program, the eligible beneficiary, or his or her parent or guardian, may receive in-line-of-duty survivor benefits by check. For the eligible beneficiary to receive payment by check, the eligible beneficiary, or his or her parent or legal guardian, shall complete and file a valid Form 6135, Request for Payment by Check.

(4) The most recently filed valid Form 6130, Authorization for Deposit of Retirement Payment, authorization for deposit of retirement payments on the Member Self-Service Web site, or valid Form 6135, Request for Payment by Check, shall control the payment or electronic transfer designation of the eligible beneficiary's in-line-of-duty survivor benefits.

(5)

(a) Once an eligible beneficiary is approved for in-line-of-duty survivor benefits and has completed and filed all forms and documentation required by Sections 3 to 7 of this administrative regulation and this section, in-line-of-duty survivor benefits shall be paid retroactive to the month following the month of the member's date of death.

(b) Any increases provided under KRS 61.691 and 78.5518 shall be applied in determining the ongoing monthly payments and total retroactive payments owed to the eligible beneficiaries.

Section 9. Requirements for Dependent Children After In-line-of-duty Survivor Benefits Begin.

(1) Once an eligible dependent child begins receiving in-line-of-duty survivor benefits, each dependent child, or his or her parent or legal guardian, shall:

(a) Notify the agency of the death or marriage of the dependent child;

(b) If applicable, notify the agency if the dependent child ceases to be a full-time student;

(c) If applicable, notify the agency if the dependent child's disability status changes; and

(d) If applicable, file a copy of the dependent child's verification of full-time student status with the agency for each semester of study within thirty (30) calendar days following the start, and within thirty (30) calendar days following the end of each semester.

(2) Each dependent child, or his or her parent or legal guardian, shall be responsible for repaying any benefits overpaid to the dependent child, or his or her parent or legal guardian, due to the failure of the dependent child, or his or her parent or legal guardian, to provide the information required by this section.

Section 10. Right to Appeal.

(1) A request for a formal hearing to appeal a denial of in-line-of-duty survivor benefits may be made by an eligible beneficiary, or his or her parent or legal guardian, in accordance with KRS 61.665 and 78.545. The request shall be made by filing a written request containing a short and plain statement of the issues being appealed.

(2) The hearing shall be conducted in accordance with KRS Chapter 13B.010-13B.170.

(3) The hearing officer presiding over an administrative hearing shall review the administrative record and any records introduced at the administrative hearing.

(a) The determination of other state and federal agencies' approval of benefits, including the Kentucky Department of Workers' Claims and the Social Security Administration, may support a final determination if accompanied by underlying objective medical evidence or vocational evidence.

(b) Written statements from medical providers within the administrative record shall not themselves be objective medical evidence, but may be relied upon if accompanied by, and reviewed in concert with, other supporting objective medical evidence.

(4) The final determination shall not be bound by factual or legal findings of other state or federal agencies. The final determination shall be based on objective medical evidence and vocational records, including objective medical evidence and vocational records contained within or that accompany a determination by another state or federal agency.

(5) Once a final determination is issued, the person who filed the appeal shall be notified of the final order of the Administrative Appeals Committee (AAC) in accordance with KRS 61.615(3)(g) and 78.5528(3)(g).

Section 11. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6010, "Estimated Retirement Allowance", updated April 2021;

(b) Form 6025, "Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution", updated June 2023;

(c) Form 6110, "Affidavit of Authorization to Receive Funds on Behalf of Minor", updated June 2023;

(d) Form 6130, "Authorization for Deposit of Retirement Payment", updated June 2023;

(e) Form 6135, "Request for Payment by Check", updated June 2023;

(f) Form 6458, "Designation of Dependent Child for In Line of Duty/Duty-Related", updated June 2023;

(g) Form 6800, "Application for Duty Related/In Line of Duty Survivor Benefits", updated June 2023;

(h) Form 6810, "Certification of Beneficiary", updated April 2021; and

(i) Form 8030, "Employer Job Description", updated June 2023.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8:00 a.m. to 4:30 p.m. This material is also available on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 13B.010-13B.170, 16.505-16.582, 16.601, 61.505, 61.592, 61.615, 61.640, 61.665, 61.691, 78.510-78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(g), (3)(d)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 16.601 and 78.5534 establish survivor benefits for certain eligible beneficiaries in the event of a hazardous position employee's death resulting from an act in-line-of-duty. This administrative regulation establishes the procedures for filing and administering an application for in-line-of-duty survivor benefits, and the appeal procedures if denied.
• History: 105 KAR 001:457. 50 Ky.R. 514, 1050; eff. 1-30-2024; Recodified to 105 KAR 003:457; eff. 8-5-2026.

Chapter 4 Employers

105 KAR 4:120 Participation of County Employees Retirement System employers {#sec-105-kar-4-120 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:120}

Section 1. Definitions.

(1) "Board" is defined by KRS 78.510(2).

(2) "Inactive employer" means a participating employer that ceases to have any employees in a regular full-time position participating in the system.

(3) "Merged employer" means one (1) or more participating employers that have merged with one (1) or more participating or non-participating employers into a new single entity or operating under the name of one (1) of the participating or non-participating employers that are part of the merger.

(4) "New or separate employer" means a participating employer that:

(a) Forms, becomes, or is bought out by a non-participating employer; or

(b) Dissolves or becomes an inactive employer, and another distinct entity is formed and assumes responsibility for a portion or all of the business.

(5) "Non-participating employer" means an entity that:

(a) Does not participate in the system; or

(b) Applied for participation in the system and:

1. Is pending a determination of participation;

2. Withdrew its application; or

3. Was denied or failed to complete the requirements to be approved for participation.

(6) "Split or separated employer" means a participating employer that divides into two (2) or more distinct entities.

(7) "System" is defined by KRS 78.510(1).

Section 2. Participation in the System. For a prospective employer to participate in the system, the prospective employer shall:

(1) Meet the definition of county in KRS 78.510(3);

(2) Be qualified to establish and maintain a governmental plan as defined in 26 U.S.C. 414(d) and 29 U.S.C. 1002(32);

(3) Have an irrevocable contract with the Kentucky Personnel Cabinet for health insurance coverage for its employees in accordance with KRS 78.530(1)(b);

(4) Comply with:

(a) KRS 78.510 through 78.852; and

(b) KAR Title 105;

(5) Complete the requirements of Sections 3 through 5 of this administrative regulation; and

(6) Receive board approval in accordance with Section 6 of this administrative regulation.

Section 3. Determining Prospective Employer's Qualification to Participate.

(1) A prospective employer shall submit a resolution or ordinance by its controlling board authorizing participation in the system as established in KRS 78.530(1) within twelve (12) months of the date the resolution or ordinance was passed.

(2) No later than the end-of-day ninety (90) calendar days from the date the resolution or ordinance indicated in subsection (1) of this section is submitted, the prospective employer shall submit:

(a) Its Articles of Incorporation, bylaws, ordinance, or other document establishing or creating the prospective employer;

(b) Its current fiscal year budget;

(c) Its health insurance contract as described in Section 2(3) of this administrative regulation;

(d) A valid Form 2010, Election or Rejection of Participation, completed by all current employees;

(e) A valid Form 7075, Employer Contact Information;

(f) A valid Form 7250, Verification of Payments Outside Regular Wages;

(g) A valid Form 7280, Employer Certification for Installment Purchase of Service;

(h) A valid Form 7851, Data Use and Reporting Agreement;

(i) A valid Form 7071, Employer Self Service Employer Administrator Account Creation Request; and

(j) If requested by the agency, a letter from the U.S. Internal Revenue Service or U.S. Department of Labor that states the entity sufficiently meets the governmental requirements to participate in a qualified governmental retirement plan.

(3)

(a) Once the requirements of subsections (1) and (2) of this section are received by the agency, the agency shall review the documentation and determine if the prospective employer meets the requirements for participation in the system.

(b) If a prospective employer meets the requirements for participation in the system, the agency shall initiate a trial period of participation for the prospective employer in accordance with Section 4 of this administrative regulation.

Section 4. Trial Period.

(1) The prospective employer shall serve a three (3) month trial period, which shall begin on the first day of the month following the completion to the requirements as established in Sections 2 and 3 of this administrative regulation.

(2) During the trial period, the prospective employer shall:

(a) Submit all reports required by KRS 78.625 in accordance with 105 KAR 4:140;

(b) Remit applicable employer, employee, and health insurance contributions in accordance with 105 KAR 4:140; and

(c) Require employee participation in accordance with KRS 78.530, 78.531, 78.535, and 78.540.

Section 5. Submission to the Board. Once the requirements of Sections 2 and 4 of this administrative regulation are complete, the agency shall provide the board with the prospective employer's:

(1) Trial period results;

(2) Current fiscal year's budget; and

(3) Resolution or ordinance authorizing participation in the system.

Section 6. Board Review.

(1) The prospective employer shall obtain authorization to participate from the board as established in KRS 78.510(3).

(2) The board may deny participation if it determines that a prospective employer has failed to comply with the provisions of Sections 2 through 4 of this administrative regulation, or if the prospective employer's participation will have:

(a) An adverse impact on the tax qualification of the system, pursuant to 26 U.S.C. 414(d) or any other applicable federal law or regulation; or

(b) A significant adverse impact on the actuarial soundness of the system.

(3)

(a) If the board denies a prospective employer's request to participate in the system, it shall refund to the prospective employer and its employees the contributions paid by them to the system during the prospective employer's trial period.

(b) If the board approves the prospective employer's request to participate in the system, the effective date of participation shall be the first day of the trial period as established in Section 4 of this administrative regulation.

Section 7. Alternate Participation Plan.

(1) If a prospective employer wishes to participate under the alternate participation plan pursuant to KRS 78.530(3), it shall request the board to conduct an actuarial study to determine the cost of purchasing past service for eligible employees prior to adoption of a resolution or ordinance by its controlling board authorizing participation in the system.

(2) The annual installment to amortize the cost of the employees' service under the alternate participation plan shall not be less than ten (10) percent of the total annual payroll for nonhazardous employees and fifteen (15) percent of the total annual payroll for hazardous employees included in the alternate participation plan. The payment shall be due each year on the first day of the month in which participation began.

Section 8. Continued Participation. Pursuant to KRS 78.530(2), once an employer begins participating in the system, the employer shall continue to participate if it remains qualified unless:

(1) The board requires the employer to involuntarily cease participation in accordance with KRS 78.535(2)(b); or

(2) A voluntary cessation is allowed pursuant to KRS 78.535(2)(a).

Section 9. Split, Separated, or New Entity.

(1) Prior to beginning the formal process and not less than six (6) months prior to the effective date of splitting, separating, or becoming a new entity, a participating employer shall submit a written notification of its intended split, separation, or formation of a new entity. The written notification shall be submitted on the participating employer's official letterhead.

(2) Once the agency is notified of the split, separation, or formation of a new entity, or becomes aware through any means, the agency shall determine whether:

(a) A new or separate employer has been created; or

(b) Split or separated employers have been created.

(3)

(a) A split, separated, or new employer shall participate in the system if, by the end of day fifteen (15) calendar days from the date of the split, separation, or formation of a new entity, all the requirements established in Section 3(2) of this administrative regulation are submitted.

(b) The participation date shall be:

1. The first day of the month following the date all the required documentation was received, if received by the 15th day of the month; or

2. The first day of the month following the month after the date all the required documentation was received, if received after the 15th day of the month.

(c) The split, separated, or new employer shall comply with KRS 78.510 through 78.852 and KAR Title 105 as of the participation date.

(d) If the split, separated, or new employer fails to complete the requirements of paragraph (a) of this subsection, then the split, separated, or new employer shall only participate if it takes all steps to participate in the system in accordance with KRS 78.530 and this administrative regulation.

(4) If there is a lapse in participation between the date the employer split, separated, or became a new entity and when it began participating, an employee who worked during the lapsed time may purchase service credit for that time by paying a delayed contribution payment if he or she elected to participate on a valid Form 2010, Election or Rejection of Participation, at the time the split, separated, or new entity began participating. The service shall not be included:

(a) In the member's total service for purposes of determining benefits under KRS 78.5536; or

(b) Toward retirement eligibility for members with a participation date on or after August 1, 2004, in accordance with KRS 61.552(10)(c), and 78.545.

Section 10. Merged Employer.

(1) Prior to beginning the formal process and not less than six (6) months prior to the effective date of merging, a participating employer shall submit a written notification of its intended merger. The written notification shall be submitted on the participating employer's official letterhead.

(2) Once the agency is notified of the merger, or becomes aware by other means, the agency shall determine whether two (2) or more participating employers, or one (1) or more participating employer and one (1) or more non-participating employer have become a merged employer.

(3) Once the merger is complete, the merged employer shall comply with KRS 78.510 through 78.852 and KAR Title 105.

Section 11. Inactive Employers.

(1)

(a)

1. If an employer becomes an inactive employer, the employer shall submit a written notification on its official letterhead stating that the employer is an inactive employer.

2. Each year by the end of day on the last day of the month of the fiscal year, an inactive employer shall submit a written notification on its official letterhead stating that it remains an inactive employer, or stating that the employer is no longer an inactive employer as applicable.

(b) If an employer ceases to become an inactive employer, the employer shall:

1. Submit a written notification on its official letterhead stating that the employer is no longer an inactive employer by the end of day thirty (30) calendar days from having a participating employee; and

2. Begin reporting a participating employee the month after he or she becomes a participating employee.

(c) The agency shall determine whether or not a participating employer is an inactive employer.

(2) Employers shall comply with KRS 78.510 through 78.852 and KAR Title 105, regardless of the employer's status as an inactive employer.

(3) The agency shall periodically audit inactive employers to determine if they remain inactive employers.

Section 12. Incorporation by Reference.

(1) The following forms are incorporated by reference:

(a) Form 2010, "Election or Rejection of Participation", March 2024;

(b) Form 7071, "Employer Self Service Employer Administrator Account Creation Request", March 2024;

(c) Form 7075, "Employer Contact Information", March 2024;

(d) Form 7250, "Verification of Payments Outside Regular Wages", March 2024;

(e) Form 7280, "Employer Certification for Installment Purchase of Service", March 2024; and

(f) Form 7851, "Data Use and Reporting Agreement", January 2024.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8 a.m. to 4:30 p.m. This material is also available on the Kentucky Public Pensions Authority's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 78.510 – 78.990, 26 U.S.C. 414(d), 29 U.S.C. 1002(32)
• STATUTORY AUTHORITY: KRS 78.510(3), 78.782
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 78.510(3) authorizes the Board of Trustees of the County Employees Retirement System to determine the eligibility of a prospective employer to participate in the County Employees Retirement System (CERS). KRS 78.782 authorizes the Board of Trustees of the County Employees Retirement System to promulgate administrative regulations not inconsistent with the provisions of KRS 78.510 through 78.852 that are necessary or proper to carry out the provisions of KRS 78.510 through 78.852. This administrative regulation establishes the procedures and requirements for employer participation in CERS.
• History: 105 KAR 004:120. 18 Ky.R. 920; 1320; eff. 11-8-1991; 19 Ky.R. 2087; 2399; eff. 5-10-1993; 21 Ky.R. 1516; eff. 2-8-1995; 29 Ky.R. 757; 1244; eff. 11-12-2002; TAm eff. 3-4-2019; Cert eff. 3-5-2019; 50 Ky.R. 2262; 51 Ky.R. 249; eff. 11-5-2024; Recodified to 105 KAR 004:120; eff. 8-5-2026.

105 KAR 4:130 Hazardous position coverage {#sec-105-kar-4-130 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:130}

Section 1. Definition. "Systems" means the Kentucky Employees Retirement System or the County Employees Retirement System.

Section 2. Hazardous Positions in the County Employees Retirement System.

(1) Pursuant to KRS 78.5520(2), County Employees Retirement System (CERS) employers shall classify a position as a hazardous position only when authorized by the CERS Board of Trustees.

(2) A CERS employer shall notify the agency of the intent to request authorization of a hazardous position from the CERS Board of Trustees. Once notified, the agency shall provide the employer with a hazardous position packet, including the date the completed packet shall be returned to be presented for authorization to the CERS Board of Trustees. The hazardous position packet stipulates that the employer shall submit:

(a) A resolution on the employer's letterhead stating the employer's intent to classify an eligible position as a hazardous position, and the desired effective date of the hazardous position classification;

(b) A valid Form 7011, HP-1, Hazardous Participation Certification (CERS), to certify that the position identified in paragraph (a) of this subsection meets the definition of a hazardous position and that sufficient funds have been budgeted for the required employer contributions;

(c) A job description for each position identified in this subsection;

(d) A valid Form 7025, Position Questionnaire, for each position identified in this subsection; and

(e) A valid Form 2011, HP-2, Hazardous Position Certification, to certify the effective date each employee began working in the position and the date of each employee's physical examination by a licensed physician.

(3)

(a) An employee who began participating in CERS prior to September 1, 2008, and was working in a CERS hazardous position prior to September 1, 2008, shall continue to participate as a hazardous position employee as long as he or she remains in a position that has been approved for hazardous position coverage.

(b) An employee who began participating in CERS prior to September 1, 2008, and is subsequently employed in a hazardous position, shall participate as a hazardous position employee as long as he or she remains in a position that has been approved for hazardous position coverage.

(c) An employee who began participating in CERS on or after September 1, 2008, in a position that was approved as a hazardous position prior to September 1, 2008, shall not be reported as a hazardous position employee until the position is approved by the CERS Board of Trustees as a hazardous position in accordance with Section 4(1) of this administrative regulation, even if the position was previously approved as a hazardous position.

Section 3. Hazardous Positions in the Kentucky Employees Retirement System.

(1) Pursuant to KRS 61.592(2), an employer in the Kentucky Employees Retirement System (KERS) shall classify a position as a hazardous position only when authorized by the Kentucky Retirement Systems (KRS) Board of Trustees.

(2) A KERS employer shall notify the agency of the intent to request authorization of a hazardous position from the KRS Board of Trustees. Once notified, the agency shall provide a hazardous position packet, including the date the completed packet shall be returned to be presented for authorization to the KRS Board of Trustees. The hazardous position packet stipulates that the employer shall submit:

(a) A valid Form 7013, HP-1, Hazardous Position Certification (KERS), to certify that the position identified in this subsection meets the definition of a hazardous position and that sufficient funds have been budgeted for the required employer contributions;

(b) A letter from the Governor's Office for Policy and Management verifying sufficient funds have been allocated for hazardous position contribution rates;

(c) A list of all positions identified in this subsection, which shall include the name, social security number, and position title of all affected individuals who are currently employed. For KERS employers reported by the Personnel Cabinet, the list of positions shall also include the unique eight-character Job ID used by the Personnel Cabinet, which shall be different than a nonhazardous position Job ID;

(d) A job description for each position identified in this subsection;

(e) A valid Form 7025, Position Questionnaire, for each position identified in this subsection; and

(f) A valid Form 2011, HP-2, Hazardous Position Certification, to certify the effective date each employee began working in the position and the date of each employee's physical examination by a licensed physician.

Section 4. Board of Trustees determination.

(1)

(a) The CERS Board of Trustees shall review all hazardous position classification requests and information provided by the CERS employer required by Section 2 of this administrative regulation to determine if each position meets the requirements to be classified as a hazardous position.

(b) If the CERS hazardous position is authorized by the CERS Board of Trustees, the hazardous position effective date will be the first day of the month following the CERS Board of Trustees meeting at which it was authorized, unless the CERS Board of Trustees specifies a different date.

(2)

(a) The KRS Board of Trustees shall review all hazardous position requests and information provided by the KERS employer required by Section 3 of this administrative regulation to determine if each position meets the requirements to be classified as a hazardous position.

(b) If the KERS hazardous position is authorized by the KRS Board of Trustees, the hazardous position effective date will be the first day of the month following the KRS Board of Trustees meeting at which it was authorized, unless a different date is specified by the Board.

Section 5. Hazardous Service Certification and Revocation.

(1)

(a) CERS and KERS employers shall complete and submit a valid Form 2011, HP-2, Hazardous Position Certification, at initial hire and each time an employee begins a new hazardous duty position or changes his or her hazardous duty position, as required by KRS 61.592(5) and 78.5520(4).

(b) The employer shall retain a copy of the physical examination by a licensed physician and submit a copy to the agency.

(2) The CERS Board of Trustees shall have the authority to revoke a CERS employee's hazardous position classification pursuant to KRS 78.5520(2)(c).

Section 6. Conversion of Position from Nonhazardous to Hazardous.

(1) To convert nonhazardous service credit to hazardous service credit:

(a) A member shall:

1. Have a membership date prior to January 1, 2014; and

2. Have previously worked in a nonhazardous position that has been converted to a hazardous position;

(b) The employer for the converted hazardous position shall have participated in the systems prior to the conversion pursuant to KRS 61.592(3)(c) and 78.5520(3)(a); and

(c) Payment of the cost of converting shall be paid in accordance with subsection (3) of this section.

(2) To request the conversion of nonhazardous service credit to hazardous service credit:

(a) The employer shall complete and submit a valid Form 4150, Certification of Employment in a Hazardous Position, to verify employee and employer participation in accordance with subsection (1)(a) and (b); and

(b) The agency shall review the Form 4150 and determine if the service credit is eligible for conversion. If eligible, the agency shall provide the member with the cost of converting.

(3)

(a) The cost of converting the nonhazardous service credit to hazardous service credit shall by paid by the member as provided by KRS 61.552(9) or 78.545, unless:

1. The employer elects to pay the cost; or

2. The county elects to pay the cost, pursuant to KRS 78.530(3)(a), (d), or (f), and the county requests and pays for an actuarial study to determine the cost.

(b) Payments made by the member shall not be picked up by the employer as described in KRS 61.560(4) and 78.615(1).

(c)

1. Payment is due in full thirty (30) days from the date the cost of converting the service credit is provided to the employee, or in accordance with a payment schedule made with the agency.

2. Payments made by an employer shall be deposited to the retirement allowance account of the appropriate retirement system as established in KRS 61.580 and 78.650, and these funds shall not be considered accumulated contributions of the individual employee.

3. Payments made by a member, including interest, shall be deposited into his or her account as established in KRS 61.575 and 78.640 and are included in the member's accumulated contributions.

4. If payment is not made in accordance with this paragraph, the service credit prior to hazardous position classification shall remain nonhazardous service credit.

Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Form 2011, HP-2, Hazardous Position Certification," November 2024;

(b) "Form 4150, Certification of Employment in a Hazardous Position", November 2024;

(c) "Form 7011, HP-1, Hazardous Participation Certification (CERS)", November 2024;

(d) "Form 7013, HP-1, Hazardous Participation Certification (KERS)", November 2024; and

(e) "Form 7025, Position Questionnaire", November 2024.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky, Monday through Friday, 8 a.m. and 4:30 p.m. This material is also available on the Kentucky Public Pensions Authority's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 61.552, 61.560, 61.580, 61.592, 78.530, 78.545, 78.5520, 78.615, 78.650
• STATUTORY AUTHORITY: KRS 61.505
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.592 and 78.5520 prescribe the manner in which an employer shall request hazardous position coverage for employees, and the requirements for converting nonhazardous position coverage to hazardous position coverage. This administrative regulation establishes the requirements, procedures, and forms for requesting, or converting to, hazardous position coverage.
• History: 105 KAR 001:130. 18 Ky.R. 921; 1321; eff. 11-8-1991; 20 Ky.R. 827; eff. 12-6-1993; 35 Ky.R. 2472, 36 Ky.R. 19; eff. 7-29-2009; TAm eff. 6-28-2019; Crt eff. 6-28-2019; 51 Ky.R. 964, 1420; eff. 5-6-2025; Recodified to 105 KAR 004:130; eff. 8-5-2026.

105 KAR 4:140 Employer's administrative duties {#sec-105-kar-4-140 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:140}

Section 1. Definitions.

(1) "Classify" means to report an employee as full-time, part-time, seasonal, temporary, emergency, probationary, volunteer, intermittent, or interim.

(2) "Confidential member account information" means information or data that relates directly or indirectly to a member's account at the agency that is specific or unique to the member.

(3) "County Fee Employer" means county employers who report to the Kentucky Personnel Cabinet due to the population of their county.

(4) "Employer Self-Service Web site" or "ESS Web site" means a secure agency Web site that:

(a) Allows employers to access its online employer account and employee information, download and submit forms, and provides other employer resources; and

(b) Allows some employers to perform reporting and contribution functions.

(5) "End of Year Report" or "EOY Report" means a school board's list of the classified participating and non-participating employees who were reported to the County Employees Retirement System during the school year that is used to average monthly work hours and determine service credit.

(6) "ESS Employer" means all employers as defined by KRS 16.505(3), 61.510(6), and 78.510(7), except a KHRIS Employer or a County Fee Employer.

(7) "Excess contributions" means employee contributions that exceed what is required by statute.

(8) "KHRIS" means Kentucky Human Resource Information System.

(9) "KHRIS Employer" means employers subject to KRS Chapter 18A.

(10) "Non-renewable" means a position created for a fixed period of time that cannot be filled, renewed, or reused after the fixed period of time has lapsed.

(11) "Personal identifiable information" or "PII" is defined by 41 C.F.R. Part 105-64.

(12) "Protected health information" or "PHI" is defined by 45 C.F.R. 160.103.

(13) "Supplemental Report" means a record-keeping tool used by County Fee Employers to report additional non-monetary monthly reporting details that cannot be submitted through KHRIS.

Section 2. Kentucky Public Pensions Authority Employer Reporting Manual. All employers shall follow the requirements and guidelines provided in the Kentucky Public Pensions Authority Employer Reporting Manual.

Section 3. ESS Web site and the Agency's Secure Email Portal.

(1) Each employer shall submit a valid Form 7851, Data Use and Reporting Agreement, completed by the agency head or agency reporting official prior to participating in the systems.

(2) Each employer shall submit a valid Form 7072, Reporting/Balancing Employer Acknowledgment, completed by the agency head or agency reporting official if it needs to designate a third-party entity to report employee information on behalf of the employer.

(3) Each employer shall have an employer administrator to grant and revoke access and security levels to the employer's ESS Web site users. The employer shall submit a valid Form 7071, Employer Self-Service Employer Administrator Account Creation Request, to designate an employer administrator.

(a) The ESS Web site users designated by the employer administrator shall include a primary reporting official and an agency head, and may also include human resources contacts.

(b)

1. Semi-annually, the ESS Web site shall require the primary reporting official to verify contact information for the employer administrator, primary reporting official, human resources contact, and the agency head.

2. If there are changes to contact information in this paragraph or other account information changes, the primary reporting official shall update the ESS Web site with the new information.

(c) An employer is responsible for all acts and omissions of authorized ESS Web site users, including the employer administrator and any ESS Web site user designated by the employer administrator in accordance with paragraph (a) of this subsection.

(d) An employer shall ensure that the primary reporting official or any other authorized user holds any password or other means for accessing the ESS Web site in a confidential manner and does not release them to any other person.

(4) The agency shall notify employers of the Web address for the ESS Web site and shall notify employers if the Web address of the ESS Web site changes.

(5) Employers required to submit reports through the ESS Web site, as established in Sections (4) through (5) of this administrative regulation, shall follow the instructions for submission as provided in the Kentucky Public Pensions Authority Employer Reporting Manual. Reports shall be submitted by:

(a) The Enter Report Details Module through a series of ESS Web site screens used to enter monthly report details; or

(b) The Upload Detail File Module through an electronic file upload on the ESS Web site.

1. To submit reports in the Upload Detail File Module, the employer's electronic file format shall meet the requirements of the Strategic Technology Advancements for the Retirement of Tomorrow (START) Employer Contribution Record Layout as provided in the Kentucky Public Pensions Authority Employer Reporting Manual. The employer shall submit a test file to the agency, which shall be reviewed for compliance with the requirements of the START Employer Contribution Record Layout.

2. If the test file is in compliance with the requirements of the START Employer Contribution Record Layout, the agency shall certify the electronic file and inform the employer of the month when the employer may begin using the Upload Detail File Module for submitting reports.

3. If the test file is not in compliance with the requirements of the START Employer Contribution Record Layout, the agency shall inform the employer of the needed corrections to the test file.

4. The employer shall not submit a report using the Upload Detail File Module until the test file is certified by the agency. If the employer is unable to timely submit its reports in accordance with KRS 61.675 and 78.625 through the Upload Detailed File Module, the employer shall timely submit its reports through the Enter Report Details Module.

(6)

(a) An employer shall submit electronic mail containing confidential member account information, PII, or PHI only through the agency's secure electronic mail portal. The Kentucky Public Pensions Authority Employer Reporting Manual shall provide employers with information on how to register, access, and use the secure electronic mail portal.

(b) An employer shall ensure that the primary reporting official or any other authorized user holds any password or other means for accessing the electronic mail portal in a confidential manner and does not release them to any other person.

Section 4. Submitting Reports.

(1) Each employer shall submit the monthly reports required by KRS 61.675, 78.625, and this administrative regulation on or before the tenth of the month following the period being reported. Reports shall be submitted through:

(a) The ESS Web site, for ESS Employers;

(b) KHRIS, for County Fee Employers and KHRIS Employers; and

(c) An electronic file transfer in a system maintained by the Finance and Administration Cabinet, for the Kentucky Personnel Cabinet.

(2) Each County Fee Employer shall also submit a Supplemental Report through the ESS Web site.

(3) Each month, the agency shall provide detailed information to employers regarding the employer submitted reports from the previous month. If the agency notifies the employer of any errors, the employer shall resolve the errors prior to the employer's next report submission.

Section 5. Additional Reporting Requirements for School Boards.

(1) Each school board shall submit the EOY Report through the ESS Web site by the end of day twenty (20) calendar days following the end of the fiscal year.

(2) After reviewing the EOY Report and identifying any employee who may need a correction or adjustment to his or her record, the agency shall provide the school board with the following applicable report(s) that the school board shall complete and submit through the ESS Web site no later than the end of day November 15th of the same calendar year:

(a) An Exception Report, if an employee had employee contributions reported during the fiscal year, but did not average eighty (80) hours per month of actual worked time in the fiscal year;

(b) A Multiple Enrollment Report, if an employee was reported with multiple periods of employment or multiple positions of employment during the fiscal year requiring an additional breakdown of the total actual days worked;

(c) A Non-Participating Employees Report, if an employee was reported as non-participating during the fiscal year and had salary reported during the school year that appears to meet the definition of a regular full-time position employee; and

(d) An Error Listing Report, if:

1. An employee was included on the EOY report, but was not otherwise reported during the fiscal year;

2. An employee was reported during the fiscal year, but was not included on the EOY report; or

3. An employee had invalid data on the EOY report, including multiple records for the same employee or employees that do not have an account established with the agency.

(3) A penalty of $1,000 shall be imposed on school boards who fail to submit the required reports within the time periods prescribed by this section. An additional penalty of $250 per month may be imposed every month until the required reports are submitted.

Section 6. Full-time Employee and Non-participating Position Reporting.

(1) Each employer shall report:

(a) All employees in a regular full-time position;

(b) All employees in non-participating positions, except as provided in subsection (2) of this section; and

(c) Employees whose employment ended during the report month, including the employee's last day of paid employment and the reason the employment ended.

(2) Employers shall not report the following employees in non-participating positions:

(a) Student employees of public universities participating in the Kentucky Employees Retirement System who are enrolled as full-time students in a course of study at the university and who are:

1. Exempt from FICA withholding pursuant to 26 U.S.C. 3121(b)(10) and 26 C.F.R. 31.3121(b)(10)-2; or

2. Classified as full-time students throughout the fiscal year pursuant to 29 C.F.R. 519.2(a);

(b) Retired-reemployed school resource officers, sheriff's deputies, and police officers that are exempt from reporting under 105 KAR 5:390; and

(c) City managers and appointed local government officials in a retirement system, Mayors, or city legislative body members who elect not to participate in the systems by completing, and the employer submitting, Form 2012, Election or Rejection of Participation for Mayors and Members of City Legislative Bodies, prior to participation in the systems in accordance with KRS 78.540(1).

(3) Employees dually employed and participating in another state-administered retirement system shall also be reported to the applicable state-administered retirement system in accordance with its rules and regulations.

Section 7. Non-Participating Positions Classification.

(1) An employer shall not change an employee's position status for the same position from full-time to seasonal, temporary, emergency, probationary, or interim.

(2) An employer shall not change the classification of an employee from one (1) non-participating position status to another non-participating position status during a fiscal year, except an employer participating in the County Employees Retirement System may classify an employee as probationary pursuant to KRS 78.510(21)(d) in the same fiscal year that the employer classifies the employee as seasonal, emergency, or part-time.

(3)

(a) An employer shall classify an employee as holding a seasonal position pursuant to KRS 61.510(21)(a) and 78.510(21)(a) only if the position:

1. Is temporary in duration;

2. Coincides with one (1) or more particular season(s) of the year, which may recur regularly from year to year; and

3. Is limited to six (6) months for noncertified school board positions or nine (9) months for all other positions.

(b)

1. Except as provided in subparagraph 2. of this paragraph, if the employer classifies an employee as holding a seasonal position and the employment of the employee in the seasonal position is terminated after the period defined in paragraph (a)3. of this subsection, there shall be a three (3) calendar month break in employment before the employee may again hold a seasonal position.

2. If the employer is a school board that classifies an employee as holding a seasonal position and the employment of the employee in the seasonal position is terminated after the period defined in paragraph (a)3. of this subsection during a fiscal or calendar year, there shall be a six (6) calendar month break in employment before the employee may again hold the same seasonal position.

(4) An employer shall only classify an employee as holding an emergency position pursuant to KRS 61.510(21)(b) or 78.510(21)(b) if the position:

(a) Is created as a result of an emergency as determined by the employer for a period not to exceed thirty (30) working days, and is non-renewable; or

(b) Is created in direct relation to a state of emergency declared by the President of the United States or the Governor of Kentucky.

(5) An employer shall only classify an employee as holding a temporary position pursuant to KRS 61.510(21)(c) or 78.510(21)(c) if the position is nonrenewable and the period in which the position exists does not exceed nine (9) calendar months for positions in the Kentucky Employees Retirement System or twelve (12) calendar months for positions in the County Employees Retirement System.

(6) An employer participating in the Kentucky Employees Retirement System shall only classify an employee as holding an interim position pursuant to KRS 61.510(21)(e) if the position is created for a one (1) time or recurring need that does not exceed nine (9) months.

(7)

(a) Except as provided in paragraph (b) of this subsection, an employer shall only classify an employee as holding a part-time position pursuant to KRS 61.510(21)(d) or 78.510(21)(e) if the position requires less than an average of 100 hours per month of actual worked time in a calendar or fiscal year.

(b) School boards shall only classify a noncertified employee as holding a part-time position pursuant to KRS 78.510(21)(e) if the position requires less than an average of eighty (80) hours per month of actual worked time in a fiscal year.

(8)

(a) An employer shall only classify an employee as holding an intermittent position if the position requires a sporadic work schedule. Across a calendar or fiscal year, an intermittent position employee:

1. May or may not earn wages every month;

2. May qualify as a part-time position in accordance with subsection (7) of this section in some months; or

3. May qualify as a regular full-time position in some months.

(b) For non-school board employees:

1. If an employee's actual worked time averages less than 100 hours per month in a fiscal or calendar year, the employee shall be classified as non-participating.

2. If an employee's actual worked time averages more than 100 hours or more per month in a fiscal or calendar year, the employee shall be classified as participating.

(c) For school board employees:

1. If an employee's actual worked time averages less than eighty (80) hours per month in a fiscal year, the employee shall be classified as non-participating.

2. If an employee's actual worked time averages more than eighty (80) hours per month or more in a fiscal year, the employee shall be classified as participating.

(9)

(a) Except as provided in paragraph (b) of this subsection, an employer shall only classify an employee as holding a volunteer position if the employee meets the requirements of KRS 61.510(42) or 78.510(39).

(b) An employer shall only classify a retired member as a volunteer if the employee meets the requirements in KRS 61.510(42), 61.637(17)(e), 78.510(39), and 78.5540(4)(e) and 105 KAR 5:390.

(10) The agency shall have the authority to determine whether any employee or retired member designated as holding a non-participating position by an employer is an employee in a regular full-time position.

(a) If the employer initially reports the employee in a non-participating position and the agency subsequently determines that the employee worked or averaged the necessary hours, or otherwise meets the requirements to be classified as an employee in a regular full-time position, the employer and employee shall be billed for omitted service in accordance with KRS 61.552(2) and 78.545, except as provided in paragraph (b) of this subsection.

(b) For retired reemployed members, the agency shall adjust the previously reported records from non-participating to retired reemployed and the employer shall pay the employer contributions and, if applicable, health insurance contributions.

(11)

(a) Except as provided in subsections (c) and (d) of this section, hours worked and creditable compensation earned by an employee working in multiple positions with one (1) or more employers participating in the same system shall be combined in accordance with KRS 61.680 and 78.545 only for the following positions:

1. Regular full-time;

2. Part-time;

3. Intermittent; or

4. Volunteer, if the employee has a membership date prior to August 1, 2016.

(b) If multiple part-time positions, intermittent positions, or volunteer positions (for employees with a membership date prior to August 1, 2016) are combined under paragraph (a) of this subsection and, as a result, the employee averages the required hours for a regular full-time position, employer contributions and employee contributions (including any applicable health insurance contributions) shall be remitted in accordance with Section 9 of this administrative regulation.

(c) Hours worked and creditable compensation earned by an employee working in a seasonal, temporary, emergency, probationary, or interim position with an employer shall not be combined with any other regular full-time, part-time, intermittent, or volunteer position with an employer in the same system.

(d) Hours worked and creditable compensation earned by an employee who retires or terminates employment shall not be combined with hours worked and creditable compensation later earned by the employee if the employee reemploys with a participating employer during the same fiscal year.

Section 8. Independent Contractors and Leased Employees.

(1) Quasi-governmental employers, as defined in 105 KAR 4:451, shall report persons providing services as an independent contractor, leased employee, or other employment arrangement in accordance with KRS 61.5991 and 105 KAR 4:451.

(2) The agency shall have the full authority to determine whether any person designated as an independent contractor, leased employee, or non-employee by any employer:

(a) Is an employee in a regular full-time position required to participate in the systems prospectively; or

(b) Was an employee in a regular full-time position for previous periods that were not reported by the employer in accordance with KRS 16.543, 61.543, 61.675, 78.615, and 78.625, and this administrative regulation.

(3) The agency shall apply the common law factors used by the Internal Revenue Service, in accordance with IRS Publication 1779, to make the determination described in subsection (2) of this section. The agency may also consider rules issued by the United States Department of Labor for determining whether a worker is an employee or an independent contractor under federal wage and hour laws.

(4)

(a) The agency shall provide written notification to the employer if it determines that any person designated as an independent contractor, leased employee, or non-employee by the employer:

1. Is an employee in a regular full-time position required to participate in the systems prospectively; or

2. Was an employee in a regular full-time position for previous periods that were not reported by the employer in accordance with KRS 16.543, 61.543, 61.675, 78.615, and 78.625, and this administrative regulation.

(b) A notice provided in accordance with paragraph (a)2. of this subsection shall include a Form 4225, Verification of Past Employment. The employer shall complete and submit the Form 4225 by the end of day thirty (30) calendar days from the date the notice was provided.

(5)

(a) An employer shall remit all reports, records, contributions, and reimbursements for a person as an employee in a regular full-time position in accordance with KRS 61.675, KRS 78.625, and this administrative regulation effective the first day of the calendar month after the date the notification described in subsection (4)(a) of this section is provided.

(b) Once a Form 4225, Verification of Past Employment, is received, the agency shall notify the employer of the delinquent omitted employer contributions owed.

1. An employer shall remit the delinquent omitted employer contributions in accordance with KRS 61.552(2), 61.675(3)(b), 78.545, and 78.625(3) no later than the end of day on the last day of the calendar month following the month the notice is provided.

2. If an employer needs an extension or payment schedule for the delinquent omitted employer contributions owed, it shall contact the agency to request the extension or payment schedule for the delinquent omitted employer contributions owed.

Section 9. Employer, Employee, and Health Insurance Contributions.

(1)

(a) Each employer shall remit the employer and employee contributions, and the employer contributions and reimbursements for retiree health insurance premiums as required by KRS 61.675 and 78.625 no later than the end of day on the tenth calendar day of the month following the month being reported.

(b) Employers shall not remit employer or employee contributions for employees in a non-participating position unless required to do so pursuant to KRS 61.680(6) and 78.545.

(2) Required contributions as established in subsection (1) of this section shall be remitted:

(a) By ESS Employers:

1. Through the agency's secure ESS Web site;

2. By mailing or hand delivering a check; or

3. By wire transfer; and

(b) By KHRIS Employers and County Fee Employers through a payment system maintained by the Finance and Administration Cabinet.

(3)

(a) Except as provided in subsection (b) of this section, if an employer fails to withhold from an employee's creditable compensation the full amount of contributions due from the employee in accordance with KRS 16.583, 61.543, 61.560, 61.597, 61.702, 78.5512, 78.5516, 78.5536, 78.610, or 78.615:

1. The agency shall notify the employer of the additional amount of employee contributions due from the employee;

2. The employer shall withhold the additional contributions due from the employee in accordance with KRS 16.545, 16.583, 61.543, 61.560, 61.597, 61.702, 78.5512, 78.5516, 78.5536, 78.610, or 78.615 from his or her creditable compensation and remit the additional contributions to the agency; and

(b)

1. If the employee is no longer employed by the employer, the employer shall notify the agency and the agency shall refund the incomplete employee contributions submitted by the employer on behalf of the employee to the employer, and the employer shall withhold the applicable taxes from the contributions and remit the remaining money to the employee.

2. If the contributions are refunded in accordance with this paragraph, then the agency shall provide the employee with:

a. Any interest credited on the incomplete employee contributions in accordance with KRS 61.575 or 78.640; and

b. Notification explaining the potential impact to his or her service credit and an invoice for omitted service in accordance with KRS 61.552(2) and 78.545. If the omitted service invoice is not paid, the employee may lose service credit for the month(s).

Section 10. Creditable Compensation.

(1) The employer shall report all creditable compensation paid during a month no later than the end of day on the tenth calendar day of the month following the month being reported.

(2)

(a) If creditable compensation is being reported for a month other than the reporting month, the employer shall designate the month to which the creditable compensation shall be applied.

(b) The report may need to reflect a month other than the reporting month if the creditable compensation earned is from the month in which the employee:

1. Became employed;

2. Became eligible to participate in the systems;

3. Was transferred from a nonhazardous position to a hazardous position;

4. Was transferred from a hazardous position to a nonhazardous position;

5. Terminated from employment; or

6. Became ineligible to participate in the systems.

(3)

(a)

1. Except as provided in subparagraph 3. of this paragraph, the employer shall submit a valid Form 7250, Verification of Payments Outside Regular Wages, prior to payment for creditable compensation paid as a lump sum, nonrecurring payment, or other payment outside of regular wages, and shall designate the reason for the lump sum, nonrecurring payment, or other payment outside of regular wages.

2. If the lump sum, nonrecurring payment, or other payment outside of regular wages is for a specific time period, the employer shall designate the time period during which the lump sum, nonrecurring payment, or other payment outside of regular wages was or will be earned.

(b)

1. The agency shall review the Form 7250 and notify the employer of its findings. If the agency determines the wages are creditable compensation, the agency shall also indicate how the wages shall be reported.

2. If the employer fails to designate a specific time period during which the lump sum, nonrecurring payment, or other payment outside of regular wages was or will be earned in accordance with paragraph (a)2. of this subsection, the payment shall be considered a lump sum bonus pursuant to KRS 16.505(8), 61.510(13), or 78.510(13).

3. The Form 7250 shall not be completed for creditable compensation paid as a result of reinstatement due to an Order from the Personnel Board, Labor Board, or Court.

(4) Workers' compensation payments shall not be included in creditable compensation.

Section 11. Maximum Limits to Creditable Compensation.

(1) The agency shall provide the maximum annual compensation limit to employers.

(2) Effective only for the 1996 fiscal year, in determining the compensation of an employee eligible for consideration under this provision, the rules of 26 U.S.C. 414(g)(6) shall apply, except that in applying these rules, the term "family" shall include only the spouse of the employee and any lineal descendants of the employee who have not attained age nineteen (19) before the close of the fiscal year.

(3) Effective July 1, 1996, and before July 1, 2002, the creditable compensation on which contributions are reported shall not exceed the maximum annual compensation limit contained in 26 U.S.C. 401(a)(17), $150,000, as adjusted for cost-of-living increases under 26 U.S.C. 401(a)(17)(B). Each employer shall report contributions on all creditable compensation up to the maximum annual limit. Once an employee's creditable compensation has reached the maximum annual limit, the employer shall continue to report the amount of the employee's creditable compensation in accordance with Section 10 of this administrative regulation, but shall not remit any further employer or employee contributions on the employee's creditable compensation.

(4) Effective with respect to fiscal years beginning on and after July 1, 2002, an employee's annual compensation that exceeds $200,000, as adjusted for cost-of-living increases in accordance with 26 U.S.C. 401(a)(17)(B), shall not be taken into account in determining benefits or contributions due for any fiscal year.

(a) Annual compensation shall include compensation during the fiscal year or any other consecutive twelve (12) calendar month period over which compensation is otherwise determined under the plan (the determination period).

(b) If the determination period consists of fewer than twelve (12) months, the annual compensation limit shall be prorated based on the following for formula:

(c) If the compensation for any prior determination period is taken into account in determining a plan member's contributions or benefits for the current plan year, the compensation for this prior determination period shall be subject to the applicable annual compensation limit in effect for that prior period.

(d) The cost-of-living adjustment in effect for a calendar year shall apply to annual compensation for the determination period that begins with or within the calendar year.

(5)

(a) Creditable compensation over the maximum annual compensation limit may be considered for the years used to determine the employee's final compensation for purposes of retirement if:

1. The employee's creditable compensation has exceeded the maximum annual compensation limit contained in 26 U.S.C. 401(a)(17) in years prior to the fiscal year beginning July 1, 2002;

2. The employee has filed a notification of retirement;

3. The excess creditable compensation is within the maximum annual compensation limit applicable in 2002-2003; and

4. The employee has remitted payment of employee contributions on the excess creditable compensation at the rate proscribed by KRS 61.560, 61.702, 78.5536, and 78.610.

(b) Upon receipt of employee contributions, the agency shall bill the employer for the employer contributions on the excess creditable compensation in accordance with KRS 61.565 and 78.635, and the employer shall remit the employer contributions to the agency.

(c) The excess creditable compensation shall only be included in retirement calculations if both the employee and employer have paid their respective contributions.

Section 12. Creditable Compensation Paid as a Result of an Order of a Court, the Personnel Board, or the Kentucky Commission on Human Rights.

(1) The employer or employee may submit the following for review of potential effects to the employee's account and compliance with KRS 16.505-16.592, 61.510-61.705, and 78.510-78.852 prior to the entry of the agreement or order:

(a) A proposed settlement agreement or draft order related to the resolution of a case pending before the Personnel Board, the Kentucky Commission on Human Rights, or a court of competent jurisdiction regarding employment disputes that may affect an employee's service with the systems; or

(b) An order of reinstatement of an employee pursuant to KRS 61.569 and 78.545.

(2) For creditable compensation paid as a result of an order by the Personnel Board under the authority of KRS 18A.095, by a court of competent jurisdiction, or by the Kentucky Commission on Human Rights:

(a) The creditable compensation shall be reported in accordance with Section 10 of this administrative regulation and shall be credited to the fiscal year during which the wages were earned or should have been paid by the employer;

(b) The employer shall pick-up the employee contributions as required by KRS 61.543, 61.560, 61.702, 78.5536, 78.610, and 78.615 for the designated period;

(c) The employer shall remit employer contributions as required by KRS 61.565 and 78.635 for the designated period; and

(d) The employer shall pay interest at the rate adopted by the Kentucky Retirement Systems or the County Employees Retirement System on the creditable compensation.

(3) The interest owed pursuant to subsection (2)(d) of this section shall be assessed beginning on the first day the designated period began or begins.

Section 13. Excess Contributions.

(1)

(a) Upon discovery that excess contributions have erroneously been remitted, the agency shall correct its record in compliance with KRS 61.685 and 78.545 by refunding the excess contributions, except as provided in paragraph (c) of this subsection.

(b) The employer shall withhold the applicable taxes from the employee contributions and remit the remaining money to the employee.

(c) The agency may withhold excess employer contributions to offset a payment owed to the systems.

(d) The agency shall provide the employee with any interest credited on the excess employee contributions in accordance with KRS 61.575 or 78.640.

(2) If an employee uses paid sick leave while awaiting workers' compensation and subsequently receives workers' compensation payments for the hours during which paid sick leave was previously reported, the employee contributions on the paid sick leave that have been reported to the agency shall be refunded, unless the employee has remitted the workers' compensation payments to the employer in exchange for the use of his or her paid sick leave.

Section 14. Death or Disability of a Participating Employee.

(1)

(a) Employers shall report the death of a participating employee through the ESS Web site. Employers may notify the agency of the death of a previous employee.

(b) Upon the employer's report of the death of an employee or retired member, the agency shall begin the process of determining death benefits as provided in KRS 16.601, 61.621, 61.630, 61.640, 61.703, 61.705, 78.545, 78.5532, 78.5534, and 78.5538.

(c) If a death is due to an act in line of duty or is duty-related, the employer shall add a comment to the death notice indicating this and shall complete and submit a valid Form 6800, Application for Duty Related/In Line of Duty Death Benefits. The employer shall also provide to the deceased employee's beneficiary or representative of the deceased employees' estate or trust, or submit to the agency:

1. The employer death investigation report;

2. A detailed position description or a valid Form 8030, Employer Job Description;

3. Certification or documentation of the employee's last day of paid employment; and

4. Any additional information requested by the agency or a third-party vendor on its behalf.

(2) If an employee files a claim for disability retirement benefits, the employer shall comply with the provisions of KRS 16.582, 61.600, 61.621, 61.665, 78.545, 78.5522, 78.5524, and 105 KAR 3:210, 105 KAR 3:310, and 105 KAR 3:455 and submit to the agency:

(a) A valid Form 8030, Employer Job Description and, if the employee was injured on the job, a copy of the incident report;

(b) Certification or documentation of the employee's last day of paid employment;

(c) Information regarding the employee's request for reasonable accommodations as required by KRS 61.665(2)(a), 61.665(2)(b), and 78.545; and

(d) Any additional information regarding the employee's job duties and reasonable accommodations upon request by the agency or a third-party vendor on its behalf.

Section 15. Retirement and Other Reporting Requirements for Participating Employers.

(1)

(a) The Form 6000, Notification of Retirement, Employer Certification of Leave Balances and Final Salary section shall be completed by the employer when an employee files for retirement in accordance with KRS 16.582, 61.600, 61.590, 78.545, 78.5522, and 78.5524. The employer shall certify the employee's leave balances and final salary, including any anticipated salary through the employee's termination date yet to be reported to the agency.

(b) The employer shall complete and provide the valid Form 6000, Employer Certification of Leave Balances and Final Salary section, signed by the designated Agency Reporting Official, to the employee or through ESS no later than thirty (30) days prior to the employee's effective retirement date as provided on the Form 6000.

(2) The employer shall submit personnel actions prior to September 15, 2011 on a valid Form 2020, Advice of Personnel Action.

(3) Each employer shall complete and file a valid Form 2023, Leave Without Pay Verification, when an employee begins and ends a period of leave without pay.

(4) If an employee provides a Form 2035, Beneficiary Designation, to his or her employer, the employer shall forward the Form 2035 to the agency immediately upon receipt.

(5) If either of the following forms are provided to the employer, it shall submit the completed applicable form by the end of day thirty (30) calendar days from the date the form was provided:

(a) A Form 6487, Request for Member Pension Spiking Exemption Amounts in accordance with 105 KAR 5:142, Section 4; or

(b) A Form 6481, Employer Request for Post-Determination of Bona Fide Promotion or Career Advancement, in accordance with 105 KAR 5:142, Section 3.

(6) If the agency is notified or becomes aware of past employment for which a member did not receive service credit, the agency shall provide the employer with a Form 4225, Verification of Past Employment, to certify dates, hours, wages, and the position classification for the past employment. The employer shall complete and submit the valid Form 4225 by the end of day thirty (30) calendar days from the date the Form 4225 was provided.

(7) An employer shall submit any additional information requested by the agency, including a position description or any other documentation deemed necessary by the agency to ensure employer compliance with KRS16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852.

Section 16. Felony Charges Related to Employment. Employers shall notify the agency when an employee hired on or after August 1, 2000, is convicted of a felony related to his or her employment.

Section 17. Employer Cooperation with the Agency.

(1) If an ESS Employer or County Fee Employer refuses to provide the agency access to records or information requested in accordance with KRS 61.685 and 78.545, or does not respond to a request for information or records by the agency, the agency may, if appropriate, hold payments of:

(a) Any funds due to the employer; or

(b) Refunds or initial retirement allowances to an employee or former employee of the employer whose refund or retirement may be affected by the records or information requested by the agency.

(2) The agency may conduct an audit of the employer in accordance with KRS 61.675(2) and 78.625(5) to determine compliance with the provisions of KRS 16.505-16.652, 61.610-61.705, or 78.510-78.852.

Section 18. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Kentucky Public Pensions Authority Employer Reporting Manual", July 2021;

(b) Form 2012, "Election or Rejection of Participation for Mayors and Members of City Legislative Bodies", March 2024;

(c) Form 2020, "Advice of Personnel Action", March 2024;

(d) Form 2023, "Leave Without Pay Verification", March 2024;

(e) Form 2035, "Beneficiary Designation", March 2024;

(f) Form 4225, "Verification of Past Employment", March 2024;

(g) Form 6000, "Notification of Retirement", June 2023;

(h) Form 6800, "Application for Duty Related/In Line of Duty Death Benefits", June 2023;

(i) Form 7071, "Employer Self Service Employer Administrator Account Creation Request", March 2024;

(j) Form 7072, "Reporting/Balancing Employer Acknowledgment", April 2021;

(k) Form 7250, "Verification of Payments Outside Regular Wages", September 2024;

(l) Form 7851, "Data Use and Reporting Agreement", March 2024; and

(m) Form 8030, "Employer Job Description", June 2023.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8 a.m. to 4:30 p.m. This material is also available on the Kentucky Public Pensions Authority's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505-16.652, 18A.095, 18A.105, 61.505-61.705, 78.510-78.852, 26 U.S.C. 401(a)(17), 408(a), (b), 3121(b)(10), 41 C.F.R. Part 105-64, 42 C.F.R. 423.504(b)(4)(vi), 45 C.F.R. Parts 160, 162, 164
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.565, 61.675, 78.625, 78.635
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. Employers participating in the Kentucky Employees Retirement System, County Employees Retirement System, and State Police Retirement System are required by KRS 16.545, 16.645, 61.543, 61.560, 61.565, 61.637, 61.675, 61.702, 78.5536, 78.5540, 78.610, 78.615, 78.625, and 78.635 to make contributions to the systems, report creditable compensation and other information that the systems may require to the Kentucky Public Pensions Authority, and perform other duties and responsibilities as participating employers. This administrative regulation sets out the administrative duties and reporting requirements for all participating employers.
• History: 105 KAR 001:140. 18 Ky.R. 922; 1321; eff. 11-8-1991; 21 Ky.R. 1517; eff. 2-8-1995; 22 Ky.R. 1871; eff. 6-6-1996; 31 Ky.R. 382; 699; eff. 11-5-2004; 35 Ky.R. 970; 1719; eff. 2-6-2009; 38 Ky.R. 74; 492; 9-28-2011; 39 Ky.R. 1484; 1872; eff. 4-5-2013; 40 Ky.R. 360; 1090; 1701; eff. 3-7-2014; 44 Ky.R. 1598; 1959; eff.4-6-2018; 51 Ky.R. 346; 856; eff. 2-4-2025; Recodified to 105 KAR 004:140; eff. 8-5-2026.

105 KAR 4:145 Voluntary Cessation of participation by employers {#sec-105-kar-4-145 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:145}

Section 1. Definitions.

(1) "Ceased employer" means an employer:

(a) Whose Form 7730, Application for Voluntary Cessation from CERS or KERS, has been approved by Kentucky Retirement Systems; and

(b) Who has paid the full actuarial cost.

(2) "Effective cessation date" means the last day of the Kentucky Employees Retirement Systems' or the County Employees Retirement Systems' plan year.

(3) "Plan year" means the period beginning July 1 and ending June 30.

Section 2.

(1) An employer may request an estimate of the actuarial cost of ceasing participation from Kentucky Employees Retirement System or County Employees Retirement System. The request shall be made by completing the Form 7725, Request for Estimated Actuarial Cost of Voluntary Cessation.

(2) Kentucky Retirement Systems shall provide the estimate of the cost as of the next available cessation date.

(3) Kentucky Retirement Systems shall provide the estimate of the cost based on the information currently in its database and projecting the service and salary of all active employees as if they remain employed and continue to earn the same creditable compensation through the next available cessation date.

(4) The estimated actuarial cost of ceasing participation shall not be binding on Kentucky Retirement Systems.

(5) The employer shall not rely on the estimated actuarial cost of ceasing participation.

(6) Kentucky Retirement Systems shall notify the employer of the administrative cost to process the Form 7725, Request for Estimated Actuarial Cost of Voluntary Cessation. The administrative cost shall be calculated as follows:

(a) If the number of employees and former employees to be submitted to the actuary for purposes of determining the estimated actuarial cost of voluntary cessation equals one (1) to 100 employees, the administrative cost shall be $1,500.

(b) If the number of employees and former employees to be submitted to the actuary for purposes of determining the estimated actuarial cost of voluntary cessation equals 101 or more employees, the administrative cost shall be $4,000.

(7) Kentucky Retirement Systems shall process the Form 7725, Request for Estimated Actuarial Cost of Voluntary Cessation, after the employer has remitted its payment for the administrative cost.

Section 3.

(1) The governing body of an employer seeking to cease participation in Kentucky Employees Retirement System or County Employees Retirement System shall pass a resolution to voluntarily cease participation in Kentucky Employees Retirement System or County Employees Retirement System.

(2) The resolution shall contain the following statements:

(a) That the employer has decided to voluntarily cease participation in Kentucky Employees Retirement System or County Employees Retirement System;

(b) That the employer acknowledges that the employer is subject to the requirements and restrictions of KRS 61.522 and this administrative regulation;

(c) That the employer acknowledges that in order to voluntarily cease participation in Kentucky Employees Retirement System or County Employees Retirement System the employer shall pay the full actuarial cost of withdrawal and all administrative costs;

(d) That the employer acknowledges that its employees will no longer earn service credit in Kentucky Employees Retirement System or County Employees Retirement System for employment with the employer after its approved effective cessation date from Kentucky Employees Retirement System or County Employees Retirement System under KRS 61.522 and this administrative regulation;

(e) That the employer agrees to cooperate with Kentucky Retirement Systems to educate its employees about the effect of the employer's cessation on the employees' retirement accounts and the employees' options regarding their retirement accounts; and

(f) That the employer shall not mandate, force, or require its employees to take a refund of their accumulated account balance as defined by KRS 61.510(41) or 78.510(38) or retaliate against its employees who chose not to take refunds of their accumulated account balance as defined in KRS 61.510(41) or 78.510(38).

Section 4.

(1) An employer seeking to cease participation in Kentucky Employees Retirement System or County Employees Retirement System shall file a completed Form 7730, Application for Voluntary Cessation from CERS or KERS, with the executive director of Kentucky Retirement Systems by December 31 during the plan year containing the employer's selected effective cessation date.

(2) The employer shall submit the following documents with its Form 7730, Application for Voluntary Cessation from CERS or KERS:

(a) The Resolution of the governing body of the employer resolving to voluntarily cease its participation in Kentucky Employees Retirement System or County Employees Retirement System;

(b) The employer's Articles of Incorporation, if applicable;

(c) The employer's current by-laws, if applicable;

(d) The employer's Certificate of Existence/Authorization from the Kentucky Secretary of State, if applicable;

(e) Documentation of the alternative retirement program created by or being created by the employer for its employees, such as a written description of the alternative retirement program;

(f) The employer's most recent five (5) audited financial statements and independent auditor's reports;

(g) The employer's most recent five (5) Consolidated Annual Financial Reports, if applicable; and

(h) Documentation of the source of the funds the employer intends to use to pay the full actuarial cost.

(3) The employer shall submit with its Form 7730, Application for Voluntary Cessation from CERS or KERS, an encrypted electronic file listing each current and former full-time employee as defined by KRS 61.510(21) and 78.510(21) who were employed during any time period the employer participated in Kentucky Employees Retirement System or County Employees Retirement System, containing:

(a) Full name;

(b) Last known address;

(c) Date of birth;

(d) Social security number or Kentucky Retirement Systems member identification number;

(e) Beginning date of employment;

(f) Date employment ended, if applicable;

(g) Sick leave balance;

(h) Beginning and ending dates of any active duty military service when the employee was not employed by the employer filing the Form 7730, Application for Voluntary Cessation from CERS or KERS, if available; and

(i) Beginning and ending dates of any active duty military service when the employee was employed by the employer filing the Form 7730, Application for Voluntary Cessation from CERS or KERS.

(4) The employer shall submit with its Form 7730, Application for Voluntary Cessation from CERS or KERS, a list of pending lawsuits, legal actions, arbitrations, mediations, and other litigation to which the employer is a party including:

(a) Name of the case;

(b) The case number;

(c) The name and address of the court, arbitrator, mediator, or administrative agency in which the case is pending; and

(d) A copy of the complaint or a description of the allegations made in the complaint as well as the type and amount of relief sought by the plaintiff or plaintiffs.

(5) Kentucky Retirement Systems shall not accept or continue processing a Form 7730, Application for Voluntary Cessation from CERS or KERS, for an employer who:

(a) Has not paid or otherwise resolved all its outstanding invoices with Kentucky Retirement Systems;

(b) Has reporting that is not correct in accordance with KRS 61.675, 78.625, and 105 KAR 4:140; or

(c) Is a party to pending legal action in which Kentucky Retirement Systems is an adverse party and the result of which may affect the accounts of the employer's employees, the employer's full actuarial cost of ceasing participation, or the amount of employer contributions owed by the employer.

(6) The Board of Trustees of Kentucky Retirement Systems shall accept or reject the Form 7730, Application for Voluntary Cessation from CERS or KERS, for processing prior to the effective cessation date following submission of the Form 7730, Application for Voluntary Cessation from CERS or KERS.

Section 5.

(1) The employer shall pay the administrative costs incurred by Kentucky Retirement Systems for processing the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS.

(2) The employer shall pay $10,000 as a deposit with the Form 7730, Application for Voluntary Cessation from CERS or KERS.

(3) Kentucky Retirement Systems shall place the deposit in a designated account and shall utilize the funds to pay the administrative costs of processing the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS.

(4) Kentucky Retirement Systems shall maintain records of all costs associated with the processing of the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, including:

(a) The cost of compensation and benefits of Kentucky Retirement Systems' employees computed on an hourly basis;

(b) Fees incurred by Kentucky Retirement Systems for use of external professional services; and

(c) The costs of postage, printing, and other expenses incurred by Kentucky Retirement Systems.

(5) Kentucky Retirement Systems shall calculate its total administrative costs and send an invoice to the employer either after the employer gives notice to Kentucky Retirement Systems pursuant to Section 10(3) of this administrative regulation or following withdrawal of the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS.

(a) Kentucky Retirement Systems shall apply the deposit received pursuant to subsection (2) of this section to any administrative costs incurred by Kentucky Retirement Systems as a result of the employer seeking to utilize the provisions of KRS 61.522.

(b) Following the application of the deposit to the outstanding administrative costs, Kentucky Retirement Systems shall submit an invoice to the employer for the additional administrative costs and the employer shall pay the invoice for the remaining administrative costs within thirty (30) days of the date of the invoice.

(6)

(a) If the total administrative cost is less than the deposit paid by the employer, Kentucky Retirement Systems shall apply the remaining balance of the deposit to the:

1. Full actuarial cost if the employer gives notice of its intention to proceed with the voluntary withdrawal pursuant to Section 10(3) of this administrative regulation; or

2. Amount owed by the employer to Kentucky Retirement Systems for continued participation if the employer gives notice of its intention not to proceed with the voluntary withdrawal pursuant to Section 10(3) of this administrative regulation.

(b) Kentucky Retirement Systems shall refund any remaining balance to the employer after the amounts due pursuant to paragraph (a) of this subsection have been satisfied.

(7) The Board of Trustees of Kentucky Retirement Systems shall not consider the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, until the employer has paid all the administrative costs incurred by Kentucky Retirement Systems.

(8) The costs paid pursuant to this section shall not be refunded to the employer if the employer withdraws its application.

Section 6.

(1) Kentucky Retirement Systems shall make reasonable efforts to notify each employee identified on the list provided by the employer that the employer has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, to voluntarily cease participating in County Employees Retirement System or Kentucky Employees Retirement System.

(2) Kentucky Retirement Systems shall provide notice informing the employee of the employee's right to request an irrevocable refund, pursuant to KRS 61.522(3)(a)5., of their accumulated account balance as defined in KRS 61.510(41) or 78.510(38) within sixty (60) days of the employer's effective cessation date by submitting a completed Form 1500, KRS 61.522 60-Day Transfer Request, to Kentucky Retirement Systems. The notice shall be sent at least ten (10) days prior to the employer's effective cessation date.

(a) Kentucky Retirement Systems shall send the notice to the active employees listed by the employer who has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, on its most recent report required by KRS 61.675 or 78.625 filed prior to the date the notices required by KRS 61.522 are mailed.

(b) The employer shall submit the name and contact information of each employee it hires between the date the employer filed its Form 7730, Application for Voluntary Cessation from CERS or KERS, and the employer's effective cessation date within five (5) days of the date the employee begins working for the ceasing employer.

(c) A Form 1500, KRS 61.522 60-Day Transfer Request, submitted on or before the employer's effective cessation date shall be void.

(d) A Form 1500, KRS 61.522 60-Day Transfer Request, submitted after the last day of the sixty (60) day refund period shall be void.

(e) The employee shall be employed by the employer who has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, on the employer's effective cessation date to be eligible to request a refund of his accumulated account balance pursuant to KRS 61.522(3)(a)5.

(f) If the employee requests a refund of his accumulated account balance pursuant to KRS 61.522(3)(a)5., the employee's accumulated account balance shall be transferred to the employer's alternative retirement plan pursuant to this section even if the employee terminates employment with the employer prior to the date the Board of Trustees of Kentucky Retirement Systems has approved the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, and the employer has become a ceased employer.

(3)

(a) The employer who has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, shall establish an alternative retirement plan that is a qualified plan pursuant to 26 U.S.C. 401 on or before the expiration of the sixty (60) day refund period provided in KRS 61.522(3)(a)5.

(b) The employer shall submit verification that it has established an alternative retirement plan that is a qualified plan pursuant to 26 U.S.C. 401.

(c) Kentucky Retirement Systems shall accept one (1) of the following as verification that the employer has established an alternative retirement plan that is a qualified plan pursuant to 26 U.S.C. 401:

1. A determination letter from the Internal Revenue Service providing that the alternative retirement plan established by the employer is a qualified plan pursuant to 26 U.S.C. 401;

2. A letter from the employer's legal counsel certifying that the alternative retirement plan established by the employer is intended as a qualified plan pursuant to 26 U.S.C. 401 capable of accepting trustee to trustee transfers; or

3. Other reliable verification as determined by Kentucky Retirement Systems.

(d) Refunds requested pursuant to KRS 61.522(3)(a)5. shall be transferred to the alternative retirement plan established by the employer who has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, by trustee to trustee transfer after the Board of Trustees of Kentucky Retirement Systems has approved the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, and the employer has become a ceased employer.

1. The alternative retirement plan shall accept and separately account for post-tax employee contributions.

2. The employer's legal counsel shall provide written certification that its alternative retirement plan shall accept and separately account for post-tax employee contributions.

(e) If the employer who has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, fails to establish an alternative retirement plan pursuant to paragraph (a) of this subsection or refuses to accept and separately account for post-tax employee contributions, the refund requests pursuant to KRS 61.522(3)(a)5. shall be void. The employees who filed the refund requests pursuant to KRS 61.522(3)(a)5. shall remain members of the system and shall be included in the full actuarial cost.

(4) The employer shall not mandate, force, or require its employees to take a refund of their accumulated account balance as defined in KRS 61.510(41) or 78.510(38) or retaliate against any employee who does not take refund of their accumulated account balance as defined by KRS 61.510(41) or 78.510(38).

(5) Former employees of the ceased employer who are currently participating in the State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System, due to employment with a participating agency, shall not be eligible to take a refund of their accumulated account balance until terminating employment with the participating employer.

(6) Current employees of the employer who are also employed by another employer participating in the State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System shall not be eligible to take a refund of their accumulated account balance.

(7) Current employees of the employer on its effective cessation date may request a refund pursuant to KRS 61.522(3)(a)5.

(8) Former employees of the employer who are not participating in State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System shall not be eligible to take a refund of their accumulated account balance pursuant to KRS 61.522(3)(a)5.

Section 7.

(1) The employer shall continue to file reports in accordance with KRS 61.675, 78.625, and 105 KAR 4:140after the employer's effective cessation date until the Form 7730, Application for Voluntary Cessation from CERS or KERS, is approved by the Board of Trustees of Kentucky Retirement Systems and the employer becomes a ceased employer.

(2) The employer shall continue to remit employer contributions in accordance with KRS 61.675, 78.625, and 105 KAR 4:140after the effective cessation date until the Form 7730, Application for Voluntary Cessation from CERS or KERS, is finally approved by the Board of Trustees of Kentucky Retirement Systems and the employer becomes a ceased employer.

(a)

1. Kentucky Retirement Systems shall hold the employer contributions until the Form 7730, Application for Voluntary Cessation from CERS or KERS, is finally approved by the Board of Trustees of Kentucky Retirement Systems and the employer becomes a ceased employer.

2. Kentucky Retirement Systems shall credit the entire sum of the employer contributions remitted pursuant to this section to the employer's full actuarial cost.

(b) If the employer does not become a ceased employer because it withdraws its Form 7730, Application for Voluntary Cessation from CERS or KERS, or if its Form 7730, Application for Voluntary Cessation from CERS or KERS, is rejected by the Board of Trustees of Kentucky Retirement Systems, the employer contributions remitted pursuant to this subsection shall be credited towards any outstanding contributions owed for its continued participation in Kentucky Employees Retirement System or County Employees Retirement System while the Form 7730, Application for Voluntary Cessation from CERS or KERS, was pending.

(c) Kentucky Retirement Systems shall refund any remaining balance to the employer after the amounts due pursuant to paragraphs (a) and (b) of this subsection have been satisfied.

(3)

(a) If the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, is withdrawn by the employer or is rejected by the Board of Trustees of Kentucky Retirement Systems, the employer shall resume withholding employee contributions effective the month after the month in which the Form 7730, Application for Voluntary Cessation from CERS or KERS, was withdrawn or rejected.

(b) Pursuant to KRS 61.552(20), if the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, is withdrawn by the employer or is rejected by the Board of Trustees of Kentucky Retirement Systems, Kentucky Retirement Systems shall provide notice to each employee of the amount of employee contributions due to Kentucky Retirement Systems for the time period between the employer's proposed effective cessation date and the date the Form 7730 was withdrawn or rejected.

(c) The employee shall not receive service credit for the period between the employer's proposed cessation date and the date the Form 7730, Application for Voluntary Cessation from CERS or KERS, was withdrawn or rejected, if the employee does not pay the employee contributions to Kentucky Retirement Systems.

(4)

(a) If a member who is an employee of the employer that has filed a Form 7730, Application for Voluntary Cessation from CERS or KERS, files for disability retirement benefits while the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS is pending, Kentucky Retirement Systems shall use the employer's proposed effective cessation date as the member's last day of paid employment if the member has not established a last day of paid employment prior to the employer's effective cessation date.

(b) If the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, is withdrawn by the employer or rejected by the Board of Trustees of Kentucky Retirement Systems, Kentucky Retirement Systems shall determine the member's last day of paid employment pursuant to KRS 61.510(32) if the member has paid the employee contributions due.

(c) If an employee does not pay the employee contributions due, the first day of the month the employer resumes withholding employee contributions shall be a reemployment date for purposes of determining eligibility for disability retirement benefits.

(5) The employer shall continue to pick-up payments for installment purchase of service for any employee who is purchasing service pursuant to KRS 61.552(14) and 105 KAR 1:150.

(a) The employee shall have sixty (60) days from the date the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, is finally approved by the Board of Trustees of Kentucky Retirement Systems and the employer becomes a ceased employer to pay in full any outstanding balance on the installment purchase agreement pursuant to KRS 61.552(14) and 105 KAR 1:150.

(b) If the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, is withdrawn by the employer or is rejected by the Board of Trustees of Kentucky Retirement Systems, the employee's installment purchase of service agreement shall remain in effect.

(6)

(a) The four (4) percent employer pay credit and applicable interest accrued while employed with a ceased employer shall vest as of the effective cessation date for those employees who began participating on or after January 1, 2014.

(b) Employees of the ceased employer who began participating on or after January 1, 2014, shall not be vested in the four (4) percent employer pay credit or applicable interest attributable to the time the employee was employed with an employer other than the ceased employer.

Section 8.

(1) Employees of an employer that has submitted a Form 7730, Application for Voluntary Cessation from CERS or KERS, shall comply with the provisions of KRS 61.590, 61.625, and 61.637.

(2) Employees of a ceased employer shall terminate employment with all participating employers of the State Police Retirement System, County Employees Retirement System, Kentucky Employees Retirement System, and the ceased employer prior to retiring pursuant to KRS 61.590 or taking a refund pursuant to KRS 61.625.

(3)

(a) Employees of a ceased employer shall comply with KRS 61.637 and 105 KAR 5:390 after retirement.

(b) The ceased employer shall certify that the employee seeking to retire or take a refund is terminating employment or has terminated employment with no prearranged agreement to return to work for the ceased employer.

Section 9.

(1) Employees shall receive service credit for sick leave accrued pursuant to KRS 61.546 or 78.616 as of the effective cessation date.

(a) If the employer participates in a sick leave program established in KRS 61.546 or 78.616, the employer shall report to Kentucky Retirement Systems the number of hours of each employee's accumulated sick leave as of the effective cessation date.

(b) Kentucky Retirement Systems shall credit the months of sick leave service reported pursuant to this section to the employee's total service credit to determine the employer's full actuarial cost.

(2) Kentucky Retirement Systems shall credit the months of military service pursuant to KRS 61.555(1) and (2) prior to the employer's effective cessation date and include the months in the calculation of the employer's full actuarial cost.

Section 10.

(1) The employer shall pay or otherwise resolve all its invoices and correct all reporting in accordance with KRS 61.675, 78.625, and 105 KAR 4:140 by August 31 after the effective cessation date.

(2) Kentucky Retirement Systems shall provide the employer with the amount of the full actuarial cost by sending a notice of actuarial cost and the report of the actuary to the employer.

(3) The employer shall notify Kentucky Retirement Systems in writing of its decision to voluntarily cease participation or withdraw the Form 7730, Application for Voluntary Cessation from CERS or KERS, within sixty (60) days of the date of the notice of actuarial cost.

(4) The employer shall submit the final plan documents for its alternative retirement program with its notification if it intends to cease participation.

(5) The Board of Trustees of Kentucky Retirement Systems shall not consider the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, until the employer has paid all the administrative costs incurred by Kentucky Retirement Systems, pursuant to Section 5 of this administrative regulation.

(6) After the employer has paid all the administrative costs, the Board of Trustees of Kentucky Retirement Systems shall approve or reject the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS.

Section 11.

(1) The ceased employer shall pay the full actuarial cost of benefits accrued by its current and former employees by lump sum payment within thirty (30) days of the date the Board of Trustees of Kentucky Retirement Systems approves its application.

(2) If the employer's Form 7730 has not received final approval by the Board of Trustees of Kentucky Retirement Systems or the ceasing employer has not paid the full actuarial cost by lump sum within thirty (30) days of the date of the Board of Trustees of Kentucky Retirement Systems' final approval of its application, the employer's Form 7730 shall be void.

Section 12.

(1) A person eligible to purchase service credit pursuant to KRS 61.552 related to employment with the ceasing employer, must either complete the purchase or enter into a service purchase agreement with Kentucky Retirement Systems no later than the employer's effective cessation date.

(2) Pursuant to KRS 61.552, current and former employees shall not be eligible to purchase service credit related to employment with a ceased employer after the employer's effective cessation date.

(3) A person may purchase service credit pursuant to KRS 61.552(20) if the service is not related to employment with the ceased employer.

(4) A former employee of a ceased employer who becomes employed with a participating employer after terminating employment with the ceased employer may purchase service credit pursuant to KRS 61.552 that is not related to employment with a ceased employer.

(5) An employee's eligibility to purchase service credit pursuant to KRS 61.552 shall be reinstated if the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, is withdrawn by the employer or rejected by the Board of Trustees of Kentucky Retirement Systems.

Section 13.

(1) If an employer files legal action against Kentucky Retirement Systems regarding the provisions of KRS 61.522 or this administrative regulation, the employer shall pay all administrative costs and legal fees incurred by Kentucky Retirement Systems if the employer's legal action against Kentucky Retirement Systems is unsuccessful or is dismissed for any reason other than by the agreement of the parties.

(2) The Board of Trustees of Kentucky Retirement Systems shall not approve or deny the employer's Form 7730, Application for Voluntary Cessation from CERS or KERS, until the legal action is resolved.

Section 14. If any due date or time period deadline provided in KRS 61.522 or this administrative regulation falls on a Saturday, Sunday, or day that Kentucky Retirement Systems is closed due to state holiday, the due date or time period deadline shall extend to the close of business of the next business day.

Section 15. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 7725, "Request for Estimated Actuarial Cost of Voluntary Cessation", October 2015;

(b) Form 7730, "Application for Voluntary Cessation from CERS or KERS", July 2018; and

(c) Form 1500, "KRS 61.522 60-Day Transfer Request", March 2016.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

• RELATES TO: KRS 61.510, 61.522, 61.546, 61.552, 61.555, 61.565, 61.590, 61.598, 61.625, 61.637, 61.675, 78.510 – 78.852, 26 U.S.C. 401
• STATUTORY AUTHORITY: KRS 61.522(8), 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Board of Trustees of Kentucky Retirement Systems to promulgate administrative regulations necessary or proper in order to carry out the provisions of KRS 61.510 to 61.705, and 78.510 to 78.852. KRS 61.522 authorizes certain participating employers in the Kentucky Employees Retirement System and the County Employees Retirement System to voluntarily cease participation if that employer pays the full actuarial cost of benefits accrued by its current and former employees. KRS 61.522(8) requires the Board to promulgate administrative regulations to administer the provisions of the statute. This administrative regulation establishes the procedures and requirements for voluntary cessation from participation in the Kentucky Employees Retirement System and the County Employees Retirement System.
• History: 105 KAR 001:145. 42 Ky.R. 2293, 2578; eff. 6-3-2016; 45 Ky.R. 1318, 2066; eff. 2-1-2019; Crt eff. 1-13-2026; Recodified to 105 KAR 004:145; eff. 8-5-2026.

105 KAR 4:147 Involuntary cessation of participating employers {#sec-105-kar-4-147 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:147}

Section 1. Definitions.

(1) "Ceased employer" means an employer who the Board of Trustees has determined must involuntarily cease participation.

(2) "Involuntary cessation date" means the date established by the Board of Trustees when approving the employer's involuntary cessation from participation in the Kentucky Employees Retirement System or County Employees Retirement System.

Section 2. Upon determination by the Board of Trustees, an employer shall be required to involuntarily cease participation from the Kentucky Employees Retirement System or the County Employees Retirement System.

(1) The Board of Trustees shall provide written notice to the employer of its intention to involuntarily cease participation. The notice shall be sent by certified mail to the employer's designated reporting official on file at Kentucky Retirement Systems.

(2) The notice shall provide an explanation of the board's decision for involuntary cessation, including whether:

(a) The board has determined that the employer is no longer qualified to participate in a governmental plan; or

(b) The board has determined that the employer has failed to comply with the requirements of KRS 61.510 to 61.705 or 78.510 to 78.852.

(3) The notice shall provide the employer with the opportunity to fully resolve its noncompliance within sixty (60) days of the date the notice was issued by Kentucky Retirement Systems. The board may extend this time if provided a written statement from the employer ensuring full resolution but requiring additional time due to factors outside the employer's control preventing the employer from fully resolving its noncompliance within sixty (60) days of the date of the notice.

(a) Upon expiration of this time, the board shall determine whether the employer fully resolved its noncompliance and shall remain a participant of the Kentucky Employees Retirement System or County Employees Retirement System or that the employer failed to fully resolve its noncompliance and to proceed with involuntary cessation.

(b) If the board determines that the employer fully resolved its noncompliance, then the employer shall be informed that the involuntary cessation process shall be suspended contingent upon continued compliance.

(4) If the board determines involuntary cessation should proceed, the employer shall be provided with written notice indicating:

(a) That the employer shall pay the full actuarial cost of the benefits accrued by its current and former employees;

(b) That the employer shall be responsible for all fees incurred by Kentucky Retirement Systems for use of external professional services including the administrative costs of an actuarial study performed by Kentucky Retirement Systems' consulting actuary;

(c) That the employer shall be responsible for reimbursing Kentucky Retirement Systems for the cost of compensation and benefits of Kentucky Retirement Systems' employees computed on an hourly basis as well as the costs of postage, printing, and other expenses incurred by Kentucky Retirement Systems;

(d) That the involuntary cessation of participation applies to all of the employer's current and former employees; and

(e) An involuntary cessation date.

(5) The employer shall submit in an encrypted electronic file a list of each current and former full-time employee as defined by KRS 61.510(21) and 78.510(21) who were employed during any time period the employer participated in Kentucky Employees Retirement System or County Employees Retirement System, containing:

(a) Full name;

(b) Last known address;

(c) Date of birth;

(d) Social Security number or Kentucky Retirement Systems member identification number;

(e) Beginning date of employment;

(f) Date employment ended, if applicable;

(g) Sick leave balance;

(h) Beginning and ending dates of any active duty military service when the employee was not employed by the employer; and

(i) Beginning and ending dates of any active duty military service when the employee was employed by the employer.

(j) If the employer refuses or fails to submit the requested information, Kentucky Retirement Systems shall make reasonable efforts to issue a notice to the last known address on file to those current and former employees of the employer that involuntary cessation has been initiated. Kentucky Retirement Systems will provide an involuntary cessation date and notification that the employee will no longer earn service credit while employed with the employer after that date.

(6) Upon receipt of the actuarial study, Kentucky Retirement Systems shall:

(a) Issue an invoice to the employer for the full actuarial cost of cessation as determined in the actuarial study and the total administrative costs for administering the involuntary cessation; and

(b) Require the employer to pay the invoice by lump sum within thirty (30) days of its issuance by Kentucky Retirement Systems.

Section 3.

(1)

(a) Former employees of the ceased employer who are currently employed with a different employer participating in the State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System shall not be eligible to take a refund of their accumulated account balance until terminating employment with the participating employer.

(b) Current employees of the ceased employer who are also employed by another employer participating in the State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System shall not be eligible to take a refund of their accumulated account balance unless they terminate all employment with participating employers.

(2) Current employees of a ceased employer shall terminate employment with the ceased employer and all employers participating in the State Police Retirement System, County Employees Retirement System, and Kentucky Employees Retirement System prior to retiring pursuant to KRS 61.590 or taking a refund pursuant to KRS 61.625.

(3) Employees of a ceased employer shall comply with KRS 61.637 and 105 KAR 5:390 after retirement.

(4) Employees of a ceased employer shall have sixty (60) days from the involuntary cessation date to pay in full any outstanding balance on an installment purchase agreement pursuant to KRS 61.552(14) and 105 KAR 1:150.

(5)

(a) The four (4) percent employer pay credit and applicable interest accrued while employed with a ceased employer shall vest as of the involuntary cessation date for those employees who began participating on or after January 1, 2014.

(b) Employees of the ceased employer who began participating on or after January 1, 2014, shall not be vested in the four (4) percent employer pay credit or applicable interest attributable to a time of employment with an employer other than the ceased employer.

(6) Employees of the ceased employer shall receive service credit for sick leave accrued pursuant to KRS 61.546 or 78.616 as of the involuntary cessation date.

(a) If the employer participates in a sick leave program established in KRS 61.546 or 78.616, the employer shall report to Kentucky Retirement Systems the number of hours of each employee's accumulated sick leave as of the involuntary cessation date.

(b) Kentucky Retirement Systems shall credit the months of sick leave service reported pursuant to this section to the employee's total service credit to determine the employer's full actuarial cost.

(c) If the employer refuses or fails to certify an employee's unused sick leave, Kentucky Retirement Systems shall credit the months of sick leave last reported to the employee's file with Kentucky Retirement Systems as of the employer's involuntary cessation date.

(7) Kentucky Retirement Systems shall credit the months of military service pursuant to KRS 61.555(1) and (2) reported prior to the employer's involuntary cessation date to determine the employer's full actuarial cost.

(8) Kentucky Retirement Systems shall use the employer's involuntary cessation date as the member's last day of paid employment pursuant to KRS 61.510(32) for any member who files for disability retirement benefits that has not established a last day of paid employment prior to the involuntary cessation date.

Section 4. If the employer fails to timely remit the full actuarial cost and Kentucky Retirement Systems' total administrative costs attributable to involuntary cessation, the Board of Trustees may file an action in the Franklin Circuit Court to enforce the provisions of KRS 61.522 and this administrative regulation to recover the full actuarial cost.

Section 5.

(1) A person eligible to purchase service credit pursuant to KRS 61.552 related to employment with the ceasing employer, must either complete the purchase or enter into a service purchase agreement with Kentucky Retirement Systems no later than the employer's involuntary cessation date.

(2) Pursuant to KRS 61.552, current and former employees shall not be eligible to purchase service credit related to employment with a ceased employer after the employer's involuntary cessation date.

(3) A person may purchase service credit pursuant to KRS 61.552(20) if the service is not related to employment with the ceased employer.

(4) A former employee of a ceased employer who becomes employed with a participating employer after terminating employment with the ceased employer may purchase service credit pursuant to KRS 61.552 that is not related to employment with a ceased employer.

Section 6. If an employer files legal action against Kentucky Retirement Systems regarding the provisions of KRS 61.522 or this administrative regulation, the employer shall pay all administrative costs and legal fees incurred by Kentucky Retirement Systems if the employer's legal action against Kentucky Retirement Systems is unsuccessful or is dismissed for any reason other than by the agreement of the parties.

Section 7. If any due date or time period deadline provided in KRS 61.522 or this administrative regulation falls on a Saturday, Sunday, or day that Kentucky Retirement Systems is closed due to state holiday, the due date or time period deadline shall extend to the close of business of the next business day.

History

• RELATES TO: KRS 61.510, 61.522, 61.546, 61.552, 61.555, 61.565, 61.590, 61.598, 61.625, 61.637, 61.675, 78.510 – 78.852, 26 U.S.C. 401
• STATUTORY AUTHORITY: KRS 61.522(9), 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Board of Trustees of Kentucky Retirement Systems to promulgate administrative regulations necessary or proper in order to carry out the provisions of KRS 61.510 to 61.705, and 78.510 to 78.852. KRS 61.522 authorizes the Board of Trustees of Kentucky Retirement Systems to involuntarily terminate participation of employers in the Kentucky Employees Retirement System and the County Employees Retirement System determined by the board to no longer qualify to participate in a governmental plan or to be noncompliant with the provisions of KRS 61.510 to 61.705 or 78.510 to 78.852. The Board of Trustees of Kentucky Retirement Systems shall require lump sum payment of the full actuarial cost of benefits accrued by its current and former employees for those involuntarily ceased employers. KRS 61.522(8) requires the board to promulgate administrative regulations to administer the provisions of the statute. This administrative regulation establishes the procedures and requirements for involuntary cessation from participation in the Kentucky Employees Retirement System and the County Employees Retirement System.
• History: 105 KAR 001:147. 45 Ky.R. 1318, 2066; eff. 2-1-2019; TAm eff. 8-19-2019; TAm eff. 9-12-2019; Crt eff. 1-13-2026; Recodified to 105 KAR 004:147; eff. 8-5-2026.

105 KAR 4:148 Merged, split, new, separate, or separated employers or entities {#sec-105-kar-4-148 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:148}

Section 1. Definitions.

(1) "Actuarially accrued liability" means a prorated annual dollar contribution amount for employers with employees that have participated in or are participating in the system on or after July 1, 2021, that is based on the individual employer's percentage of the system's total actuarially accrued liability as of June 30, 2019, and determined pursuant to KRS 61.565(1)(d)1.

(2) "Assign" means the transfer of legal and financial responsibility for paying the actuarially accrued liability to another participating or non-participating employer.

(3) "Inactive employer" means a participating employer that ceases to have any employees in a regular full-time position participating in the system.

(4) "Merged employer" means one (1) or more participating employers with an actuarially accrued liability that have merged or have plans to merge with one (1) or more participating or non-participating employers into a new single entity or under the name of one (1) of the participating or non-participating employers that are part of the merger.

(5) "New or separate employer" means:

(a) A participating employer with an actuarially accrued liability that forms, becomes, or is bought out by a non-participating employer; or

(b) A participating employer with an actuarially accrued liability that dissolves or becomes an inactive employer and one (1) or more distinct entities assumes responsibility for a portion or all of the business of the inactive employer or participating employer that has dissolved.

(6) "Non-participating employer" means an entity that does not participate in the system.

(7) "Participating employer" means an employer that participates in the system.

(8) "Split or separated employer" means a participating employer with an actuarially accrued liability that divides into two (2) or more distinct entities.

(9) "Submit" means an employer required form, documentation, report, or payment has been received by the retirement office via mail, fax, electronic mail, the Employer Self Service Web site, or other mode specifically detailed in this administrative regulation.

(10) "System" means the Kentucky Employees Retirement System.

Section 2. Retroactive Effective Date of Application. This administrative regulation applies to the actuarially accrued liability of any participating employer that on or after March 23, 2021 pursuant to KRS 61.565(1)(d)4., merges with another employer or entity, forms a new or separate employer or entity, or splits or separates operations into multiple employers or entities.

Section 3. Actuarially Accrued Liability Assignment.

(1)

(a) Except as provided in paragraphs (b) and (c) of this subsection, if, on or after March 23, 2021, a participating employer that has an actuarially accrued liability becomes a merged employer, new or separate employer, or split or separated employer, the agency shall have full authority to assign a portion or all of the total actuarially accrued liability of the participating employer to:

1. The merged, new, split, separate, or separated participating employer or the merged non-participating employer; or

2. Another participating employer that voluntarily requests assignment of a portion or all of the total actuarially accrued liability of the participating employer under Section 8(2)(c) of this administrative regulation.

(b) Employers that pay the costs to cease participation in the system as provided by KRS 61.522 are not subject to the provisions of paragraph (a) of this subsection.

(c) If a district health department ceases to operate or has a county or counties that withdraw from the district health department, the agency shall assign the total actuarially accrued liability contribution based upon the proportion of taxable property of each county as certified by the Department for Public Health in the Cabinet for Health and Family Services in accordance with KRS 212.132.

(2) The effective date of the new assignment of actuarially accrued liability shall be the latter of:

(a) The first day of the month following the completion of the merger, split, separation, or formation of a new participating employer; or

(b) March 23, 2021.

(3) If a merged, new, split, separate, or separated participating employer or the merged non-participating employer fails to pay in full an actuarially accrued liability assigned to it pursuant to this administrative regulation and KRS 61.565, the agency may pursue all available remedies, including actions such as those set forth in KRS 61.675(4), and civil payments, legal fees, and costs in accordance with KRS 61.685(3).

Section 4. Notification of Merge, Split, Separating, or New Entity.

(1)

(a) Prior to beginning the formal process or merging, splitting, separating, or becoming a new entity, a participating employer that has an actuarially accrued liability shall submit a written notification of the participating employer's intended merger, split, separation, or formation of a new entity. The written notification shall be on the participating employer's official letterhead.

(b) Following receipt of the notification required by paragraph (a) of this subsection, the agency shall make the relevant determination under Sections 5 through 9 of this administrative regulation.

(2) If the agency becomes aware, through any means, that a participating employer that has an actuarially accrued liability has merged, split, separated, or become a new or separate entity, and the participating employer failed to submit a written notification in compliance with subsection (1)(a) of this section, the agency shall make the relevant determination under Sections 5 through 9 of this administrative regulation.

Section 5. Merged Employers.

(1) The agency shall determine whether two (2) or more participating employers, or one (1) or more participating employer and one (1) or more non-participating employer, have become a merged employer on or after March 23, 2021.

(2) If two (2) or more participating employers with an actuarially accrued liability combine into a new single merged employer, then:

(a) The merged employer shall take the necessary steps to participate in the system in accordance with KRS 61.520; and

(b) The entire actuarially accrued liability shall be assigned to the merged employer.

(3)

(a) If one (1) or more participating employers with an actuarially accrued liability combines with one (1) or more non-participating employer into a new single merged employer, then:

1. The merged employer may be required to take the necessary steps to participate in the system in accordance with KRS 61.520, as determined by the agency; and

2. The entire actuarially accrued liability shall be assigned to the merged employer.

(b) The agency shall have the authority to determine whether a merged employer as described in paragraph (a) of this subsection shall be required to take the necessary steps to participate in the system in accordance with KRS 61.520.

Section 6. New or Separate Employers.

(1) The agency shall determine whether one (1) or more new or separate employers have been created on or after March 23, 2021.

(2)

(a) Except as provided in paragraph (b) of this subsection, the entire actuarially accrued liability of the original participating employer that becomes the new or separate employer shall be assigned to the new or separate employer.

(b) If multiple new or separate employers have been created on or after March 23, 2021, the actuarially accrued liability calculated for the original participating employer shall be divided by the number of new or separate employers and an equal portion of the actuarially accrued liability shall be assigned to each new or separate employer.

(3) The agency shall have the authority to determine whether each new or separate employer as described in subsection (1) of this section shall be required to or may take the necessary steps to participate in the system in accordance with KRS 61.520.

Section 7. Split or Separated Employers.

(1) The agency shall determine whether split or separated employers have been created on or after March 23, 2021.

(2) Split or separated employers shall be required to take the necessary steps to participate in the system in accordance with KRS 61.520.

(3) Each split or separated employer shall be assigned a share of the actuarially accrued liability calculated for the original participating employer based on the percentage of participating employees of each split or separated employer.

Section 8. Inactive Employers.

(1) The agency shall determine whether a participating employer is an inactive employer.

(2) Except as provided in paragraphs (a) through (c) of this subsection, the actuarially accrued liability calculated for the inactive employer shall remain assigned to the inactive employer.

(a) If the inactive employer becomes part of a merged employer on or after March 23, 2021, the actuarially accrued liability of the inactive employer shall be assigned as described in Section 5 of this administrative regulation.

(b) If, relevant to the inactive employer, a new or separate employer is created on or after March 23, 2021, the actuarially accrued liability of the inactive employer shall be assigned as described in Section 6 of this administrative regulation.

(c) If one (1) or more other entities voluntarily requests that the agency assign it all or part of the actuarially accrued liability of the inactive employer, the actuarially accrued liability of the inactive employer shall be assigned by the agency to the other entities.

Section 9. Other Similar Circumstances. Employers whose circumstances do not fit exactly into merged, new, split, separate, or separated participating employer, or merged non-participating employer as identified in Sections (5) through (8) of this administrative regulation, but have similar circumstances, shall be individually evaluated by the agency. The agency shall determine which section of this administrative regulation closest matches the employer circumstances and shall administer in accordance with the identified section.

Section 10. Enforcement. Any participating employer or non-participating employer that has been assigned an actuarially accrued liability pursuant to this administrative regulation shall be subject to KRS 61.675(4) for the purposes of the actuarially accrued liability.

History

• RELATES TO: KRS 61.520, 61.522, 61.565, 61.645, 61.675, 61.685, 212.132
• STATUTORY AUTHORITY: KRS 61.565(1)(d)4., 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) authorizes the Board of Trustees of the Kentucky Retirement Systems to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 16.505 to 16.652 and 61.510 to 61.705, and to conform to federal statutes and regulations. As required by KRS 61.565(1)(d)4., this administrative regulation establishes the procedures and requirements for the process of assigning actuarially accrued liability contributions for a Kentucky Employees Retirement System employer that, on or after March 23, 2021, merges with another employer or entity, forms a new or separate employer or entity, or splits or separates operations into multiple employers or entities.
• History: 105 KAR 001:148. 50 Ky.R. 1207, 1653; eff. 5-7-2024; Recodified to 105 KAR 004:148; eff. 8-5-2026.

105 KAR 4:149 Quasi-governmental employer cessation window {#sec-105-kar-4-149 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:149}

Section 1. Definitions.

(1) "Alternative retirement program" means a plan provided by a ceased quasi-governmental employer, which meets the qualification requirements of 26 U.S.C. 401(a) or 26 U.S.C. 403(b), is eligible to receive direct trustee-to-trustee transfers of pre-tax and post-tax contributions, and does not include a defined benefit plan.

(2) "Ceased employer" means a quasi-governmental employer who, on or after April 1, 2020, but prior to May 1, 2021, or in the case of university or community college employers it shall be prior to January 1, 2021, submits a resolution to cease participation in Kentucky Employees Retirement System ("KERS"), which is accepted by the Board on or before June 30, 2021.

(3) "Employer", for the purposes of this administrative regulation, means a quasi-governmental employer including local and district health departments governed by KRS Chapter 212, state-supported universities and community colleges, the Kentucky Higher Education Student Loan Corporation, and any other agency otherwise eligible to voluntarily cease participating in KERS pursuant to KRS 61.522.

(4) "Employer election" means an election by ceasing employers set forth in the resolution to cease participation in KERS regarding whether nonhazardous employees hired prior to June 30, 2021, who began participating in KERS prior to January 1, 2014, will continue to participate in KERS after June 30, 2021. Nonhazardous employees of employers who do not elect for their employees to continue participating in KERS will not accrue additional service credit or benefits with KERS through the ceased employer after June 30, 2021.

(5) "Nonhazardous employee" means a regular full-time employee participating in KERS in a position other than a position classified as hazardous by the board pursuant to KRS 61.592.

Section 2.

(1) An employer may request an estimate of the actuarial cost of ceasing participation in KERS of its nonhazardous employees prior to December 31, 2019. The request shall be made by completing the Form 7726, Request for Estimated Cost of Voluntary Cessation from KERS under KRS 61.522(8).

(2) Kentucky Retirement Systems (hereafter "Systems") shall provide the estimate of the cost within sixty (60) days of receipt of the Form 7726, however, no estimate shall be required to be provided prior to January 31, 2020.

(3) Systems shall provide the estimate of the cost based on the information currently in its database and projecting the service and creditable compensation of all nonhazardous employees as if they remain employed in a regular full-time position through June 30, 2020.

(4) The estimated actuarial cost of ceasing participation shall not be binding on the Systems.

(5) The employer shall not rely on the estimated actuarial cost of ceasing participation.

(6) Systems shall notify the employer of the administrative cost to process the Form 7726. The administrative cost shall be calculated as follows:

(a) If the number of employees and former employees to be submitted to the actuary for purposes of determining the estimated actuarial cost of cessation equals one (1) to 100 employees, the administrative cost shall be $1,500.

(b) If the number of employees and former employees to be submitted to the actuary for purposes of determining the estimated actuarial cost of cessation equals 101 or more employees, the administrative cost shall be $4,000.

(7) Systems shall process the Form 7726 after the employer has remitted its payment for the administrative cost.

Section 3.

(1) The governing body of an employer seeking to cease participation in KERS through KRS 61.522(8) shall pass a resolution to cease participation and submit the resolution to the board on or after April 1, 2020, but prior to May 1, 2021, or January 1, 2021, in the case of university or community college employers.

(2) The resolution shall contain the following statements:

(a) That the employer has decided to voluntarily cease participation in KERS;

(b) The employer election and acknowledgement as to whether nonhazardous employees hired prior to June 30, 2021, who began participating in the Systems prior to January 1, 2014, will, as a result of the employer election, either continue to participate or cease earning service credit and benefits after June 30, 2021;

(c) That the employer acknowledges it is unable to rescind the resolution to cease participation after April 30, 2021, or after December 31, 2020 in the case of university or community college employers;

(d) That the employer acknowledges it is subject to the requirements and restrictions of KRS 61.522 and this administrative regulation;

(e) That the employer acknowledges that in order to cease participation in KERS pursuant to KRS 61.522(8), the employer shall pay the actuarial cost of ceasing participation and all administrative costs associated therewith;

(f) That the employer agrees to cooperate with the Systems to educate its employees about the effect of cessation and the employer election on the employees' retirement accounts and the employees' options regarding their retirement accounts;

(g) That the employer shall not mandate, force, or require its employees to take a refund of their accumulated account balance as defined by KRS 61.510(41), or retaliate against its employees who chose not to take refunds of their accumulated account balance as defined in KRS 61.510(41); and

(h) That the employer shall hold the Commonwealth and the Systems, including board members and employees of the Systems, harmless from damages, attorney's fees and costs from legal claims for any cause of action brought by any member or retired member of the ceasing employer related to the cessation of the employer.

(3) The Board shall accept the resolution on or before June 30, 2021, in order for the employer to cease participation.

(4) If a resolution to cease participation in the KERS is not received by the board prior to May 1, 2021, or January 1, 2021 in the case of university or community college employers, the employer shall continue to participate in the KERS and pay the full actuarially determined contributions for fiscal years occurring on or after July 1, 2021.

Section 4.

(1) An employer shall file a completed Form 7727, Actuarial Study for Quasi-Governmental Employer Cessation with its resolution on or after April 1, 2020, but prior to May 1, 2021, or January 1, 2021 in the case of university or community college employers, with the executive director of the Systems.

(2) The employer shall submit the following documents with its Form 7727:

(a) Documentation of the alternative retirement program created by or being created by the employer for its employees, such as the determination letter issued by the Internal Revenue Service or a written description of the alternative retirement program;

(b) The employer's most recent five (5) audited financial statements and independent auditor's reports; and

(c) The employer's most recent five (5) Comprehensive Annual Financial Reports, if applicable.

(3) The employer shall submit with its Form 7727, an encrypted electronic file in a format prescribed by the Systems listing each current and former nonhazardous employee, employed in a full-time position as defined by KRS 61.510(21), who was employed during any period the employer participated in KERS, containing:

(a) Full name;

(b) Last known address;

(c) Date of birth;

(d) Social security number or Systems member identification number;

(e) Beginning date of employment;

(f) Date employment ended, if applicable;

(g) Sick leave balance;

(h) Beginning and ending dates of any active duty military service when the employee was not employed by the employer filing the Form 7727, if available; and

(i) Beginning and ending dates of any active duty military service when the employee was employed by the employer filing the Form 7727.

Section 5.

(1) The employer shall pay the administrative costs incurred by the Systems for the actuarial study completed in accordance with the Form 7727 to determine the final cost, as well as all other administrative costs incurred for ceasing participation pursuant to KRS 61.522(3)(a).

(2) The employer shall pay $10,000 as a deposit with the Form 7727.

(3) Systems shall place the deposit in a designated account and shall utilize the funds to pay the administrative costs of processing the employer's Form 7727.

(4) Systems shall charge a reasonable fee for its administrative costs associated with processing of the employer's Form 7727 and send an invoice to the employer upon completion of the actuarial study.

(a) Systems shall apply the deposit received pursuant to subsection (2) of this section to any administrative costs incurred by the Systems attributable to the employer's cessation in accordance with KRS 61.522(8).

(b) Following the application of the deposit to the outstanding administrative costs, Systems shall submit an invoice to the employer for the additional administrative costs and the employer shall pay the invoice for the remaining administrative costs within thirty (30) days of the date of the invoice.

(5) If the total administrative cost is less than the deposit paid by the employer, Systems shall credit the remaining balance of the deposit to the employer.

Section 6.

(1) Systems shall attempt to notify each nonhazardous employee identified on the list provided by the ceased employer that the employer is ceasing participation pursuant to KRS 61.522(8).

(2) For those eligible nonhazardous employees, the Systems shall provide notice informing the employee of the right to request an irrevocable refund, pursuant to KRS 61.522(3)(a)5., of their accumulated account balance as defined in KRS 61.510(41) by submitting a completed Form 1500, KRS 61.522 60-Day Transfer Request within sixty (60) days of June 30, 2021 to Kentucky Retirement Systems. The notice shall be sent no later than June 19, 2021.

(a) Systems shall send the notice to the active nonhazardous employees listed by the employer who has filed a Form 7727 on its most recent report required by KRS 61.675 submitted prior to the date the notices are mailed.

(b) The employer shall submit the name and contact information of each nonhazardous employee it hired between the completion of the Form 7727 and before June 30, 2021, within five (5) days of the date the employee begins working for the employer.

(c) A Form 1500 submitted on or before June 30, 2021, shall be void.

(d) A Form 1500 submitted after August 31, 2021, shall be void.

(e) The employee shall be employed by the employer who has filed a Form 7727 on June 30, 2021, to be eligible to request a refund of his accumulated account balance pursuant to KRS 61.522(3)(a)5.

(f) An employee who submitted Form 1500 to the Systems may rescind the form by submitting written notice to the Systems on or before August 31, 2021.

(g) If an employee requests a refund pursuant to KRS 61.522(3)(a)5., the employee's accumulated account balance shall be transferred to the employer's alternative retirement program pursuant to this section even if the employee terminates employment with the employer after June 30, 2021, unless the employee rescinds the Form 1500 on or before August 31, 2021.

(3)

(a) The employer shall establish an alternative retirement program on or before August 31, 2021, as provided in KRS 61.522(3)(a)5.

(b) The employer shall submit the final plan documents for its alternative retirement program as well as an affirmative statement that the alternative retirement program does not include a defined benefit plan.

(c) The employer shall submit verification that it has established an alternative retirement program qualified under 26 U.S.C. 401(a) or 26 U.S.C. 403(b) that is eligible to receive direct trustee-to-trustee transfers of pre-tax and post-tax contributions and does not include a defined benefit plan. Systems shall accept one (1) of the following as verification that the employer has established a valid alternative retirement program:

1. A determination letter from the Internal Revenue Service providing that the alternative retirement program established by the employer is a qualified plan pursuant to 26 U.S.C. 401(a) or 26 U.S.C. 403(b) capable of accepting trustee-to-trustee transfers;

2. A letter from the employer's legal counsel certifying that the alternative retirement program satisfies the requirements of 26 U.S.C. 401(a) or 26 U.S.C. 403(b) capable of accepting trustee-to-trustee transfers; or

3. Other reliable verification as determined by the Systems.

(d) Refunds requested pursuant to KRS 61.522(3)(a)5. shall be transferred to the alternative retirement program established by the ceased employer by trustee-to-trustee transfer after August 31, 2021.

1. The alternative retirement program shall accept and separately account for post-tax employee contributions.

2. The ceased employer's legal counsel shall provide written certification that its alternative retirement program shall accept and separately account for post-tax employee contributions.

(e) If the ceased employer fails to establish an alternative retirement program pursuant to paragraph (a) of this subsection, the refund requests pursuant to KRS 61.522(3)(a)5. shall be void. The employees who filed the refund requests pursuant to KRS 61.522(3)(a)5. shall remain members of the system and shall be included in the full actuarial cost.

(4) Former employees of the ceased employer who are currently participating in the State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System, due to employment with a participating agency, shall not be eligible to take a refund of their accumulated account balance until terminating employment with the current participating employer.

(5) Current employees of the ceased employer who are also employed by another employer participating in the State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System shall not be eligible to take a refund of their accumulated account balance until terminating employment with the participating employer.

(6) Current employees of the ceased employer on June 30, 2021, may request a refund pursuant to KRS 61.522(3)(a)5.

(7)

(a) Former employees of the ceased employer who are not participating in State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System shall not be eligible to take a refund of their accumulated account balance pursuant to KRS 61.522(3)(a)5.

(b) The account balance of former employees of the ceased employer who are not participating in State Police Retirement System, County Employees Retirement System, or Kentucky Employees Retirement System, but who were employed with the ceased employer on June 30, 2021, and who submitted a valid Form 1500 pursuant to this section, shall be transferred to the employer's alternative retirement program unless the employee rescinds the Form 1500 on or before August 31, 2021.

(8) The four (4) percent employer pay credit and applicable interest accrued shall vest as of June 30, 2021, for those nonhazardous employees who began participating on or after January 1, 2014, and who request a refund pursuant to KRS 61.522(3)(a)5.

Section 7.

(1)

(a) The employer shall continue to file reports and remit employer contributions on all employees in accordance with KRS 61.675 and 105 KAR 4:140 for creditable compensation paid through June 30, 2021.

(b) If the employer elects for nonhazardous employees to continue participation through the employer election, the employer shall continue to file reports in accordance with KRS 61.675 and 105 KAR 4:140. In addition, the employer shall continue to report all applicable pick up installments for pre-tax service purchases pursuant to KRS 61.552(14)(c). However, pursuant to KRS 61.522(8)(d)2., the employer shall not remit employer contributions for nonhazardous employees after June 30, 2021, as those amounts are factored into the cost calculation established by KRS 61.522(7).

(c) The employer shall continue to remit employer contributions for all hazardous employees.

(2)

(a) If a member who is an employee of a ceased employer files for disability retirement benefits but does not establish a last day of paid employment prior to June 30, 2021, and does not continue participation, the Systems shall use June 30, 2021, as the member's last day of paid employment.

(b) If a member who is an employee of a ceased employer continues participation because of the employer election and files for disability retirement benefits, the member's last day of paid employment shall be established pursuant to KRS 61.510(32).

(3)

(a) The ceased employer shall continue to pick-up payments for installment purchase of service for any employee who is purchasing service pursuant to KRS 61.552(14) and 105 KAR 1:150 through June 30, 2021.

(b) An employee that ceases participation in KERS on June 30, 2021, shall have sixty (60) days from the date of cessation to pay in full any outstanding balance on the installment purchase agreement pursuant to KRS 61.552(14) and 105 KAR 1:150.

Section 8.

(1) Employees of a ceased employer shall comply with the provisions of KRS 61.590, 61.625 and 61.637.

(2) Employees of a ceased employer shall terminate employment with all participating employers of the State Police Retirement System, County Employees Retirement System, Kentucky Employees Retirement System and the ceased employer prior to retiring pursuant to KRS 61.590 or taking a refund pursuant to KRS 61.625.

(3)

(a) Employees of a ceased employer shall comply with KRS 61.637 and 105 KAR 5:390 after retirement.

(b) The ceased employer shall certify that the employee seeking to retire or take a refund is terminating employment or has terminated employment with no prearranged agreement to return to work for the ceased employer.

Section 9.

(1) Employees shall receive service credit for sick leave accrued pursuant to KRS 61.546 as of June 30, 2021.

(a) If the ceased employer participates in a sick leave program established in KRS 61.546 the employer shall report to the Systems the number of hours of each employee's accumulated sick leave as of June 30, 2021.

(b) Systems shall credit the months of sick leave service reported pursuant to this section to the employee's total service credit to determine the ceased employer's actuarial cost.

(c) If the ceased employer elects that nonhazardous employees hired prior to June 30, 2021, who began participating in the Systems prior to January 1, 2014, will continue participation pursuant to KRS 61.522(8)(d), then those employees shall continue to receive service credit for sick leave accrued pursuant to KRS 61.546 after June 30, 2021, while participating through the ceased employer.

(2)

(a) Systems shall credit the months of military service pursuant to KRS 61.555 prior to June 30, 2021, and include the months in the calculation of the ceased employer's actuarial cost.

(b) If the ceased employer elects that nonhazardous employees hired prior to June 30, 2021, who began participating in the Systems prior to January 1, 2014, will continue participation pursuant to KRS 61.522(8)(d), then those employees shall continue to be able to obtain military service pursuant to KRS 61.555 if otherwise eligible.

Section 10.

(1) The ceased employer shall pay or otherwise resolve all its invoices and correct all reporting in accordance with KRS 61.675 and 105 KAR 4:140by July 25, 2021.

(2)

(a) Systems shall provide the ceased employer with the amount of the full actuarial cost by sending a notice of actuarial cost and the report of the actuary to the employer.

(b) Systems shall provide the ceased employer with the payment amounts required if the ceased employer elects to pay the actuarial cost in installment payments.

(3)

(a) The ceased employer shall elect on the Form 7728, Payment Election for Quasi-Governmental Employer Cessation whether to pay the actuarial cost of cessation by lump-sum payment or in installment payments not to exceed thirty (30) years from June 30, 2021.

(b) The Form 7728 shall be received in the retirement office on or before thirty (30) days after the date on which the Systems mailed the notice of actuarial cost and the report of the actuary to the ceased employer.

(c) A ceased employer intending to pay the full actuarial cost by lump-sum shall submit with the Form 7728 documentation of the source of the funds the employer intends to use to pay the full actuarial cost.

(d) A ceased employer intending to pay the actuarial cost by installment payment plan shall submit with the Form 7728 documentation of:

1. Source of funds to pay the installment payments;

2. List of real property owned by the ceased employer, including deeds of conveyance, title, all liens or encumbrances on the real property, and any current written contractual lease or rental agreement of the real property identified;

3. List of liabilities of the ceased employer; and

4. Inventory of all personal property owned by the ceased employer or in which the employer has an interest that may be used as collateral by the employer, including chattel paper, deposit accounts, documents, goods covered by documents, instruments, investment property, letters of credit rights, and money.

(4)

(a) Ceased employers who elect to pay the full actuarial cost by lump-sum shall make the payment by June 30, 2022, pursuant to KRS 61.522(3)(a)7.

(b) If the lump-sum payment is not received by the Systems at the retirement office on or before June 30, 2022, then the ceased employer shall make installment payments and the payment amount shall be recalculated based upon this adjustment with interest added for fiscal year 2022-2023. The ceased employer shall also remit all outstanding installments payments.

(c) Systems shall notify any ceased employer who has not submitted the lump-sum payment on June 21, 2022, of the impending deadline and the consequences of failing to timely pay.

(5)

(a) If the ceased employer elects to pay the actuarial cost of cessation in installment payments, the cost shall be financed by the Systems pursuant to KRS 61.522(8)(g).

(b) If the ceased employer elects for nonhazardous employees who began participating in the Systems prior to January 1, 2014, to continue participating in KERS, and the employer is not projected to pay the full actuarial cost in thirty (30) years, then the Systems shall adjust the payments so that the full actuarial costs are paid at the end of the thirty (30) year period.

(c) If the ceased employer elects for nonhazardous employees who began participating in the Systems prior to January 1, 2014 to cease participating in KERS, and the employer is not projected to pay the full actuarial cost in thirty (30) years, then the employer shall pay the amount financed through the Systems pursuant to KRS 61.522(8)(g)1. and no adjustments shall be made to the monthly payments nor shall additional amounts be charged after the thirty (30) year period.

(6)

(a) Interest shall be assigned to the principal amount annually for both lump-sum and installment payment plans beginning on July 1, 2021. A ceased employer who elects to pay the actuarial cost by installments may at any time submit payments towards the remaining balance.

(b) If the employer elects to pay the costs in installment payments, the annual payments beginning on or after July 1, 2021, including interest will be calculated as a set dollar value and then divided into monthly installments.

(c) If the ceased employer submits more than the required payments for a fiscal year, the total cost will be reduced but the monthly installment amounts will remain unchanged because the monthly amounts are based upon the set dollar value of the annual payments. Pursuant to KRS 61.522(8)(g), interest amounts are separate from total cost and interest and interest attributable to the actuarial cost will not be calculated until the cost is finalized. However, any early or additional payments may reduce the number of payments required if the full actuarial cost is paid in less than thirty (30) years from June 30, 2021.

(7) Payments made prior to the notice of full actuarial cost shall be credited to the amount and considered early or additional payments pursuant to (6)(c) of this section.

Section 11.

(1)

(a) If a ceased employer elects to make installment payments, the Systems shall submit invoices to the employer for payments owed, which are not paid through the normal monthly reports.

(b) The employer shall remit payment to the Systems by the due date provided on the invoice.

(2)

(a) If a ceased employer that elected to make installment payments is delinquent for ninety (90) days or more from the due date of an outstanding invoice, and the ceased employer elected for nonhazardous employees with participation dates prior to January 1, 2014, to continue participating, then the participation of those employees in KERS through the ceasing employer will be suspended until the ceased employer has remitted the required payments. The employees shall not earn service credit, including service credit purchased pursuant to KRS 61.552, or benefits in KERS through the ceased employer during the suspension period.

(b) Any employee contributions provided to the Systems will be held until the ceased employer remits the required payments.

(3) Systems shall notify the Finance and Administration Cabinet of any ceased employer that is delinquent for ninety (90) days or more in making installment payments pursuant to KRS 61.675(4)(c).

(4) Systems may file an action in Franklin Circuit Court to collect delinquent installment payments and attach general fund appropriations in order to satisfy the payments owed.

Section 12.

(1)

(a) Current and former employees of the ceased employer shall not be eligible to purchase service credit pursuant to KRS 61.552 after June 30, 2021, unless the current employee has continued participation in KERS because of the employer election.

(b) A current employee of a ceased employer continuing participation in KERS because of the employer election may purchase service credit pursuant to KRS 61.552 even if that service is related to employment with the ceased employer.

(2) Former employees shall not be eligible to purchase service credit related to employment with a ceased employer, pursuant to KRS 61.552 after June 30, 2021.

(3) A person eligible to purchase service credit pursuant to KRS 61.552 related to employment with the ceased employer, shall either complete the purchase or enter into a service purchase agreement with the Systems no later than June 30, 2021 unless the individual is a current employee of the ceased employer who has continued participation in KERS because of the employer election.

(4) A person may purchase service credit pursuant to KRS 61.552(20) if the service is not related to employment with the ceased employer, unless the person is a current employee that has continued participation in KERS because of the employer election.

(5) A former employee of a ceased employer who becomes employed with a participating employer after terminating employment with the ceased employer may purchase service credit pursuant to KRS 61.552 that is not related to employment with a ceased employer.

Section 13. If any due date in this administrative regulation or if an installment payment falls on a Saturday, Sunday, or day that the Systems is closed due to state holiday, the due date or time period deadline shall extend to the close of business of the next business day.

Section 14. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 7726, "Request for Estimated Cost of Voluntary Cessation from KERS under KRS 61.522(8)," August 2019;

(b) Form 7727, "Actuarial Study for Quasi-Governmental Employer Cessation", June 2020;

(c) Form 1500, "KRS 61.522 60-Day Transfer Request", November 2019; and

(d) Form 7728, "Payment Election for Quasi-Governmental Employer Cessation", June 2020.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Retirement Systems, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

• RELATES TO: KRS 18A.205, 18A.225, 61.510 to 61.705, 26 U.S.C. 401, 402, 403
• STATUTORY AUTHORITY: KRS 61.522(9), 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Board of Trustees of Kentucky Retirement Systems to promulgate administrative regulations necessary or proper in order to carry out the provisions of KRS 61.510 to 61.705. KRS 61.522(6) authorizes certain quasi-governmental employers in the Kentucky Employees Retirement System to cease participation of its nonhazardous employees under the provisions and requirements of KRS 61.522(8). The ceased quasi-governmental employer shall pay the full actuarial cost of benefits accrued by its current and former nonhazardous employees through June 30, 2021, except as provided by KRS 61.522(8)(g)4. KRS 61.522(9) requires the Board to promulgate administrative regulations to administer the provisions of the statute. This administrative regulation establishes the temporary procedures and requirements for quasi-governmental employer cessation from participation in the Kentucky Employees Retirement System pursuant to KRS 61.522.
• History: 105 KAR 001:149. 46 Ky.R. 1997, 2391; eff. 6-2-2020; 47 Ky.R. 753, 1357; eff. 4-6-2021; Recodified to 105 KAR 004:149; eff. 8-5-2026.

105 KAR 4:160 Sick leave plans {#sec-105-kar-4-160 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:160}

Section 1. Definitions.

(1) "Alternate plan" means the sick leave program established in KRS 78.616(5).

(2) "Standard plan" means the sick leave program established in KRS 61.546 or 78.616(1), (3) and (4).

Section 2.

(1) An employer participating in the County Employees Retirement System:

(a) May provide a sick leave program under KRS 78.616 by adopting an order appropriate to the employer;

(b) Shall offer only one (1) sick leave program under KRS 78.616 to its employees;

(c) Shall certify to the agency that the program shall be universally administered;

(d) Shall pay all costs of the program; and

(e) Shall certify to the agency the number of hours that constitutes a regular working day for its employees.

(2)

(a) If an employer participating in the County Employees Retirement System has no retirement sick leave program, it may choose the standard plan or it may choose the alternate plan.

1. An employer adopting the standard plan may elect to purchase credit:

a. Only for the first six (6) months of accrued sick leave;

b. For the first six (6) months and to pay fifty (50) percent of the cost for service above six (6) months; or

c. For all accumulated sick leave.

2. An employer that elects to pay only for the first six (6) months of accumulated sick leave may at a later date elect to pay fifty (50) percent or all of the cost of service above six (6) months. An employer that elects to pay for the first six (6) months and fifty (50) percent of the cost for service above six (6) months, may at a later date elect to pay for all accrued sick leave.

3. If an employer adopted the standard plan prior to July 1988, it may choose to adopt the alternate plan.

4. Within thirty (30) days of adoption of a sick leave plan, the employer shall file at the agency a description of the employer's sick leave policy, which shall specify:

a. The maximum sick leave that may be accrued;

b. Whether the policy applies to sick leave accrued prior to the adoption of the sick leave plan; and

c. Whether the policy applies to current and former employees or only to employees who retire from the employer.

(b) Employers participating in the Kentucky Employees Retirement System or the State Police Retirement System shall provide sick leave credit for all accrued sick leave.

(c) Once a sick leave program is adopted, the employer shall continue to offer a sick leave program to its employees.

Section 3. If an employer adopts the standard plan, upon a member's retirement:

(1) Each employer participating in the Kentucky Employees Retirement System, County Employees Retirement System, or State Police Retirement System with which the member has accrued sick leave credit or to which his or her accrued sick leave transferred, shall certify the unused sick leave credit that the member has accrued on "Standard Plan Sick Leave Authorization", Form 6500.

(2)

(a) The agency shall determine the number of days of credit and divide the number of days by twenty-one (21), the average number of working days in a month, unless the employer verifies an alternate number of average working days per month. If the remainder is equal to or greater than eleven (11), the member shall receive credit for an additional month. If an employee has an alternate work schedule, the employer shall verify an alternate number of average working days per month.

(b) For each employer participating in the Kentucky Employees Retirement System or County Employees Retirement System with which the member accrued sick leave credit, the cost of the credit, determined by utilizing the member's final compensation with the formula established in KRS 61.552(10)(a), shall be paid by the employer within thirty (30) days of notification by the agency.

(c) If the member accrued sick leave credit in the Kentucky Employees Retirement System, the last employer with which the member was employed shall pay the cost of sick leave credit. If the member has multiple last employers, the cost due from the last employers under this subsection shall be equally apportioned between them.

(3)

(a) If the total sick leave accrued at a County Employees Retirement System employer is greater than six (6) months and the employer does not pay for service greater than six (6) months, the employee may purchase some or all of the additional months by paying the cost, determined by utilizing the member's final compensation with the formula established in KRS 61.552(10)(a), to the agency before his or her termination, but no earlier than three (3) months from his or her effective retirement date.

(b) If the total sick leave accrued at a County Employees Retirement System employer is greater than six (6) months and the employer pays fifty (50) percent of the cost of additional months, the employee shall receive credit for all or some of the additional months if the employee pays fifty (50) percent of the cost determined by utilizing the member's final compensation with the formula established in KRS 61.552(10)(a), to the agency before his or her termination, but no earlier than three (3) months from his or her effective retirement date, and the employer pays the remaining fifty (50) percent.

Section 4. Alternate Sick Leave Plans. An employer adopting the alternate plan shall also certify the maximum number of sick leave days that an employee may accumulate prior to termination.

(1) The employer shall compensate the member for all accrued sick leave up to the maximum allowed, upon termination. If the employee is a classified employee of a school board, the employer shall compensate the employee for accrued sick leave, upon the employee's retirement or death, pursuant to KRS 161.155. The rate of compensation for each day shall be based on the employee's current rate of pay.

(2) Each month, the employer shall withhold employer and employee contributions from the sick leave compensation of employees who terminate, and shall remit the contributions along with the Form 6501, "Alternate Plan Sick Leave Authorization", for each employee. The forms and contributions deducted during the month shall be sent to the agency within ten (10) days following the end of the month. The contributions and compensation shall not be reported with the regular payroll.

(3) If the member has one (1) or more months of service credit as determined in Section 3 of this administrative regulation, the service shall be added to the member's total service credit.

(4) Compensation and service shall be included in the member's final compensation as established in this subsection.

(a) The member's sick leave credit expressed in months and the compensation for those months shall be included in the fiscal year with the highest average monthly salary used in his or her final compensation until the service credit in the fiscal year has reached twelve (12) months.

(b) When service credit in the fiscal year with the highest average monthly salary has reached twelve (12) months, the remaining months of service and compensation shall be included in the fiscal year with the lowest average monthly salary used in his or her final compensation until service credit in the fiscal year has reached twelve (12) months.

(c) When service credit in the two (2) fiscal years with the highest and lowest average monthly salary used in his or her final compensation has reached twelve (12) months, the remaining months and compensation shall be used in lieu of the member's service and salary in the fiscal year with the lowest average monthly salary of the member's final compensation. The salary replaced shall be the monthly average of the member's actual salary in the fiscal year.

Section 5. An employee who has service credit in the Kentucky Employees Retirement System as hazardous and nonhazardous, or who has service credit in both the Kentucky Employees Retirement System and the State Police Retirement System, shall have accrued sick leave prorated between the systems and between the hazardous and nonhazardous accounts based on the ratio of service in each account, including purchased service, and to the total service credit.

Section 6. Use of Sick Leave in Calculating Months of Service for Health Insurance Benefits.

(1) Unless otherwise prohibited by statute or this section, service credit attributable to sick leave shall be used to calculate health insurance benefits pursuant to KRS 61.702 or 78.5536 in the same manner as the credit is used to calculate eligibility for retirement benefits.

(2) Service credit attributable to sick leave shall not be used to determine whether a member with service in a:

(a) Nonhazardous position meets the minimum service requirements of "career threshold" as defined by KRS 61.702(4)(e)9. or KRS 78.5536(4)(e)9.; and

(b) Hazardous position meets the minimum service requirements of "career threshold" as defined by KRS 61.702(4)(e)9. or 78.5536(4)(e)9. if the member began membership on or after September 1, 2008.

(3) A member who otherwise qualifies for career threshold status shall have the service credit attributable to sick leave used to calculate any insurance contribution due pursuant to KRS 61.702(4)(e)6.b. or 78.5536(4)(e)6.b. for service as a participating employee beyond the career threshold.

Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6500, "Standard Plan Sick Leave Authorization", KPPA, 1/2026; and

(b) Form 6501, "Alternate Plan Sick Leave Authorization", KPPA, 1/2026.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. or on the agency's website at kyret.ky.gov.

History

• RELATES TO: KRS 61.546, 61.552, 61.702, 78.5536, 78.616, 161.155
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with KRS 13A.105(2) because it does not have a major economic impact.
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority, on behalf of County Employees Retirement System and Kentucky Retirement Systems, to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 61.515 to 61.705, 16.510 to 16.652, and 78.520 to 78.852. KRS 61.546 provides for retirement service credit for unused sick leave for members of the Kentucky Employees Retirement System and the State Police Retirement System who began participating before January 1, 2014. KRS 78.616 provides for retirement service credit for unused sick leave for members of the County Employees Retirement System who began participating before January 1, 2014. This administrative regulation establishes the requirements for participation in the program by individual county agencies, calculation of the service credit, and payment of the employer's cost of the credit. This administrative regulation also establishes the formula for prorating sick leave if it is earned by a member partly under SPRS, partly under KRS hazardous duty coverage, and partly under the Kentucky Employees Retirement System nonhazardous coverage. This administrative regulation also establishes when service credit due to sick leave may be used to calculate health insurance payments under KRS 61.702 or 78.5536.
• History: 105 KAR 001:160. 18 Ky.R. 925; 1322; eff. 11-8-1991; 19 Ky.R. 966; eff. 12-9-1992; 27 Ky.R. 1861; 2425; eff. 3-19-2001; 28 Ky.R. 910; 1349; eff. 12-19-2001; 29 Ky.R. 760; 1246; eff. 11-12-2002; 35 Ky.R. 101; eff. 10-3-2008; TAm eff. 6-28-2019; Crt eff. 6-28-2019; Crt eff. 6-12-2026; 52 Ky.R. 1373, 1796; eff. 8-4-2026; Recodified to 105 KAR 004:160; eff. 8-5-2026.

105 KAR 4:250 Participation of county attorney employees {#sec-105-kar-4-250 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:250}

Section 1. Submission of Form by County Attorney. For each employee paid in whole or in part from any funds outside the control of the fiscal court, urban-county government, or Prosecutors Advisory Council, the county attorney shall complete and submit a Form 2110, Retirement System Determination – County Attorney Employees, to the retirement office. The county attorney shall submit the form on or before the date the first contributions are reported on each employee or prior to the employee assuming the new job function and duties, which causes the employee's participation in a retirement system to change between the County Employees Retirement System and Kentucky Employees Retirement System.

Section 2. Procedures for Determining Membership. The county attorney shall determine the system in which each employee shall participate based on the following:

(1) For an employee participating in the County Employees Retirement System or Kentucky Employees Retirement System, the county attorney shall continue to make the required contributions for creditable compensation paid to the employee, in whole or in part, from any funds outside the control of the fiscal court, urban-county government, or Prosecutors Advisory Council, to the system in which the employee is participating unless the employee experiences a modification in job function such that the employee's duties are more appropriately related to participation in a different system pursuant to KRS 78.5302(2).

(2) The employee shall participate in the Kentucky Employees Retirement System if a majority of the employee's job function is related to the prosecutorial duties of the county attorney's office. The employee shall participate in the County Employees Retirement System if a majority of the employee's job function is related to the civil legal representation of the fiscal court and other county officials.

(3) For those employees whose time is spent performing duties related to child support collection cases, whether criminal or civil, the employee shall participate in the retirement system that the county attorney has selected for child support enforcement employees consistent with the funding and operational methods of the county attorney's office.

(4) For purposes of this section, prosecutorial duties shall include duties and functions related to the prosecution of criminal cases in the district or circuit courts of the Commonwealth. Civil legal representation shall include duties and functions related to the representation of the fiscal court, its officers or employees, or other elected county officers in any civil or administrative proceeding in state or federal courts and administrative agencies.

Section 3. Audit of County Attorney's Determination.

(1) Pursuant to KRS 61.685, Kentucky Retirement Systems may, at any time, conduct an audit of a county attorney's determination regarding employee participation in the Kentucky Employees Retirement System or the County Employees Retirement System to verify compliance with KRS 78.5302.

(2) Upon request, the county attorney shall provide Kentucky Retirement Systems with information regarding an employee's job duties, funding source for the employee's position, and respond to inquiries from the Systems to confirm the employee's correct system participation.

Section 4. Incorporation by Reference.

(1) "Form 2110, Retirement System Determination – County Attorney Employees", March 2018, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Retirement Systems, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

• RELATES TO: KRS 61.685, 78.5302
• STATUTORY AUTHORITY: KRS 61.645
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the board to promulgate administrative regulations necessary or proper to carry out the provisions of KRS 78.510 to 78.852. This administrative regulation sets out the procedures for determining membership in either the Kentucky Employees Retirement System or County Employees Retirement System for each employee of a county attorney who is paid from any source of funds outside the control of the fiscal court, urban-county government, or Prosecutors Advisory Council.
• History: 105 KAR 001:250. 19 Ky.R. 1016; Am. 1339; eff. 12-9-1992; Crt eff. 11-19-2019; 46 Ky.R. 1925, 2395; eff. 6-2-2020; Recodified to 105 KAR 004:250; eff. 8-5-2026.

105 KAR 4:451 Quasi-governmental employer reports on independent contractors and leased employees {#sec-105-kar-4-451 omnilex-key=us-ky-regs-official--title-105--105 KAR 4:451}

Section 1. Definitions.

(1) "Contractor Wizard" means an online interactive form that guides employers to certify their non-contributing service providers by answering a series of questions broken into small, manageable steps.

(2) "Core services independent contractor" means a person, either personally or through a company or other legal entity, who provides services for a quasi-governmental employer as an independent contractor, other than as a non-core services independent contractor.

(3) "Core services leased employee" means a person who provides services for a quasi-governmental employer as a leased employee through a staffing company, other than as a non-core services independent contractor.

(4) "Direct employment" means employees reported by the quasi-governmental employer in accordance with KRS 61.675 and 105 KAR 4:140.

(5) "Noncompliant" means the quasi-governmental employer falsifies, fails to provide, or withholds all, or a portion of, the required documentation or information within the time periods prescribed by this administrative regulation.

(6) "Non-core services independent contractor" is defined by KRS 61.5991(9).

(7) "Other employment arrangement" means any written agreement between a quasi-governmental employer and a third party (including a person, company, or other legal entity) for one (1) or more persons to provide services for the quasi-governmental employer in exchange for the third party receiving monetary compensation, remuneration, or profit that is not:

(a) Direct employment;

(b) A non-core services independent contractor or a non-core service leased employee agreement; or

(c) A person that would be considered in a regular full-time position if the person were directly employed by the quasi-governmental employer.

(8) "Prior fiscal year" means the fiscal year beginning July 1 that is immediately prior to the fiscal year in which the agency provides the report to the state budget director's office and the Legislative Research Commission required by KRS 61.5991(3).

(9) "Quasi-governmental employer":

(a) Means an employer participating in the Kentucky Employees Retirement System that is a local or district health department governed by KRS Chapter 212, state-supported university or community college, mental health/mental retardation board, domestic violence shelter, rape crisis center, child advocacy center, or any other employer that is eligible to voluntarily cease participation in the Kentucky Employees Retirement System as provided by KRS 61.522; and

(b) Does not include county attorneys, the Council on State Governments (CSG), the Kentucky Educational Television (KET) Foundation, Association of Commonwealth's Attorneys, the Kentucky High School Athletic Association (KHSAA), the Municipal Power Association of Kentucky, the Kentucky Office of Bar Admissions, the Nursing Home Ombudsman, the Kentucky Association of Regional Programs (KARP), and the Kentucky Association of Sexual Assault Programs.

Section 2. Required Annual Reporting.

(1)

(a) Quasi-governmental employers shall report all persons providing services as core services independent contractors, core services leased employees, or through any other employment arrangement:

1. For fiscal years July 1, 2021 through June 30, 2023, by completing and submitting a Form 6756, Annual Employer Certification of Non-Contributing Service Providers, on or before the applicable deadline of the fiscal year in which the Form 6756 was required;

2. For fiscal year July 1, 2023 through June 30, 2024, by completing and submitting the initial Form 6756, Annual Employer Certification of Non-Contributing Service Providers, or the initial Contractor Wizard on or before April 15, 2024; and

3. Effective with the fiscal year beginning July 1, 2025, and for each fiscal year thereafter, by completing and submitting the initial Contractor Wizard on or before April 15 of the fiscal year in which the Contractor Wizard is required.

(b) If a quasi-governmental employer contracts with any additional persons to provide services as core services independent contractors, core services leased employees, or through any other employment arrangement after the submission of a completed Contractor Wizard or Form 6756, Annual Employer Certification of Non-Contributing Service Providers, as applicable in accordance with paragraph (a) of this subsection, the quasi-governmental employer shall:

1. For fiscal year July 1, 2023 to June 30, 2024, submit a completed supplemental Form 6756 or Contractor Wizard reflecting only those persons not previously reported on the initial Form 6756 or Contractor Wizard. The supplemental Form 6756 or Contractor Wizard shall be submitted on or before June 30, 2024.

2. Effective with the fiscal year beginning July 1, 2024, submit a completed supplemental Contractor Wizard reflecting only those persons not previously reported on the initial Contractor Wizard. The supplemental Contractor Wizard shall be submitted on or before June 30 of the fiscal year in which the Contractor Wizard is required.

(c) All documentation required by the initial or supplemental Form 6756 or Contractor Wizard shall be submitted with the Form 6756 or Contractor Wizard.

(2)

(a) The following persons providing services as core services independent contractors, core services leased employees, or through any other employment arrangement shall not be listed on an initial or supplemental Contractor Wizard:

1. Persons who would not qualify as an employee in a regular full-time position if directly employed by the quasi-governmental employer; and

2. Persons who would be in a position reported to another state-administered retirement system if directly employed by the quasi-governmental employer.

(b) On the initial or supplemental Contractor Wizard, Quasi-governmental employers:

1. Shall indicate the number of people who meet a reporting exemption as provided in Section 5 of this administrative regulation;

2. May choose to report persons who meet a reporting exemption as provided in Section 5 of this administrative regulation, and those persons shall be treated in the same manner as all other persons listed on the Contractor Wizard, including determinations by the agency under Section 3 of this administrative regulation; and

3. Provide documentation required by the Contractor Wizard for persons marked as meeting a reporting exemption.

(3)

(a) After receiving an initial or supplemental Contractor Wizard, the agency may notify the quasi-governmental employer that additional information is required.

(b) If additional information is required, the agency shall notify the quasi-governmental employer in writing to the attention of the agency head, appointing authority, or authorized designee, such as the reporting official, and shall include the following in its notification:

1. A detailed description of the additional information required; and

2. A deadline by which the additional information required shall be submitted, which shall not be less than fourteen (14) calendar days, but may be longer than fourteen (14) calendar days.

(c) An initial or supplemental Contractor Wizard shall not be considered complete until all additional information requested by the agency is submitted.

(4)

(a) Except as indicated in paragraph (b) of this subsection, a quasi-governmental employer shall be reported as noncompliant to the state budget director's office and the Legislative Research Commission in accordance with KRS 61.5991(2)(c) and 61.5991(3)(d) if:

1. It fails to submit a valid Contractor Wizard as required by subsections (1) through (2) of this section;

2. It submits an initial or supplemental Contractor Wizard without the documentation required by the Contractor Wizard; or

3. It fails to submit additional information requested in accordance with subsection (4) of this section.

(b) The quasi-governmental employer shall not be reported as noncompliant if, by the appropriate deadline provided in this section, it provides all missing information or documentation, including as applicable:

1. A completed valid Contractor Wizard in accordance with subsections (1) and (2) of this section;

2. The documentation required by the Contractor Wizard in accordance with subsections (1) and (2) of this section; or

3. Additional information requested in accordance with subsection (3) of this section.

(5) During an audit of the quasi-governmental employer conducted in accordance with KRS 61.5991(2)(a)2., 61.675, and 61.685:

(a) If the agency discovers that a quasi-governmental employer has failed to list all persons as required by this administrative regulation on the Contractor Wizard, or for reporting prior to fiscal year 2025, a Form 6756, Annual Employer Certification of Non-Contributing Service Providers, then the quasi-governmental employer shall be reported as noncompliant to the state budget director's office and the Legislative Research Commission in accordance with KRS 61.5991(2)(c) and 61.5991(3)(d).

(b) If the agency discovers persons performing services as an independent contractor or leased employee for a quasi-governmental employer in multiple part-time positions that, if combined, constitute a regular full-time position, then the agency shall make a determination of employee or independent contractor status in accordance with Section 3 of this administrative regulation.

Section 3. Determination of Employee or Independent Contractor.

(1) The agency shall have the authority to determine which persons listed on an initial and supplemental Contractor Wizard:

(a) Shall be reported as employees in regular full-time positions; or

(b) Are independent contractors.

(2) In determining whether a person listed on the initial and supplemental Contractor Wizard is an employee of the quasi-governmental employer or an independent contractor of the quasi-governmental employer, the agency:

(a) Shall apply common law factors used by the Internal Revenue Service (IRS), in accordance with IRS Publication 1779; and

(b) May consider rules issued by the United States Department of Labor under federal wage and hour law.

(3) If the agency determines that a person listed on an initial or supplemental Contractor Wizard is an employee of the quasi-governmental employer in a regular full-time position, then the quasi-governmental employer shall:

(a) Remit all reports, records, contributions, and reimbursements for that person as an employee in a regular full-time position in accordance with KRS 61.675 and 105 KAR 4:140 effective the calendar month after the agency has notified the quasi-governmental employer of its determination in accordance with Section 4 of this administrative regulation; and

(b) For all periods during which the person was providing services to the quasi-governmental employer, submit:

1. A valid Form 4225, Verification of Past Employment, for that person; and

2. All relevant contracts and other documentation demonstrating the relationship between the quasi-governmental employer and the person.

(4) After reviewing the information from the quasi-governmental employer required by subsection(3)(b) of this section, if the agency determines that a person listed on an initial or supplemental Contractor Wizard was an employee of the quasi-governmental employer in a regular full-time position for previous periods that were not reported by the quasi-governmental employer in accordance with KRS 61.543, KRS 61.675, and 105 KAR 4:140, then:

(a) The person shall be eligible to purchase omitted service in accordance with KRS 61.552(2) for the periods of his or her previous employment by the quasi-governmental employer in a regular full-time position; and

(b) The quasi-governmental employer shall be responsible for payment of delinquent omitted employer contributions in accordance with KRS 61.552(2) and 61.675(3)(b) for all periods of the person's previous employment by the quasi-governmental employer in a regular full-time position.

Section 4. Notification to Employers of Determination of Employment Relationship.

(1) Each fiscal year quasi-governmental employers shall be notified by the agency of the determination of which persons shall be reported as employees in regular full-time positions no later than September 30 of the subsequent fiscal year.

(2)

(a) The agency shall notify the quasi-governmental employer of the determination of which persons listed on an initial or supplemental Contractor Wizard shall be reported as employees in regular full-time positions in one (1) notification letter.

(b) The notification shall be sent to the agency head, appointing authority, or authorized designee, such as the reporting official.

(c) The notification shall include:

1. The name of each person who shall be reported as an employee in regular full-time position in accordance with KRS 61.675 and 105 KAR 4:140;

2. A description of the contract or other documents for each person who shall be reported as an employee in a regular full-time position who are providing or have provided services to the quasi-governmental employer; and

3. A statement that all other persons listed on the initial or supplemental Contractor Wizard shall not be reported as employees in regular full-time positions.

Section 5. Reporting Exemptions.

(1) A person shall meet a reporting exemption if the person is providing professional services as a core services independent contractor, core services leased employee, or through any other employment arrangement if the person provides services:

(a) As a non-core services independent contractor or non-core services leased employee;

(b) That have not been performed by direct employees of the quasi-governmental employer since January 1, 2000 and have been or are being performed for the quasi-governmental employer under a contract on file at the retirement office and determined by the agency or the Kentucky Retirement Systems to represent services provided by an independent contractor; or

(c) That are under an original contract with the person or a company entered into prior to January 1, 2021 if:

1. The term of the original contract has not expired, and the contract has not been renewed or continued;

2. The contract has not been modified to encompass different services; and

3. The person was included in the original contract.

(2)

(a) When a quasi-governmental employer submits its Contractor Wizard in accordance with Section 2 of this administrative regulation, it shall also submit the employment contract for people indicated as a reporting exemption, except as provided in paragraph (b)1. of this subsection.

(b) The agency shall review the contracts and determine if the person meets the requirements of a reporting exemption.

1. If a person is determined by the agency to meet a reporting exemption, the quasi-governmental employer shall not submit the contract in subsequent fiscal years as long as all terms and conditions of the approved contract remain unchanged.

2. If a person is determined by the agency to not meet a reporting exemption, the agency shall make a determination of employment status in accordance with Section 3 of this administrative regulation.

Section 6. Report to the State Budget Director's Office and the Legislative Research Commission.

(1)

(a) To determine the number of employees of the quasi-governmental employer reported for the prior fiscal year in accordance with KRS 61.5991(3)(a), the agency shall add together all employees in regular full-time positions reported by the quasi-governmental employer pursuant to KRS 61.675 and 105 KAR 4:140 in the prior fiscal year.

(b) Persons listed on an initial or supplemental Contractor Wizard for the prior fiscal year who are ultimately determined by the agency to be employees of the quasi-governmental employer in regular full-time positions shall not be included in the number of employees of the quasi-governmental employer for the prior fiscal year. These persons shall be included in the number of employees of the quasi-governmental employer in a regular full-time position for a subsequent fiscal year if the person is reported by the quasi-governmental employer in the subsequent fiscal year as an employee in a regular full-time position in accordance with KRS 61.675 and 105 KAR 4:140.

(2) To determine the number of persons providing services to the quasi-governmental employer who were not reported for the prior fiscal year in accordance with KRS 61.5991(3)(b), the agency shall use the total number of persons listed on initial and supplemental Contractor Wizards for the prior fiscal year.

(3) The agency shall report the following information for each quasi-governmental employer determined to have falsified data or been noncompliant in accordance with KRS 61.5991(3)(d):

(a) The name of the quasi-governmental employer;

(b) A description of the type of data falsified and the support the agency has for believing the data to be falsified, if applicable; and

(c) A description of the nature of the noncompliance, if applicable.

Section 7. Retired Reemployed. A retired member who is reemployed with a quasi-governmental employer providing services through an independent contractor, leased employee, or through any other employment arrangement shall also comply with KRS 61.637, 78.5540, and 105 KAR 5:390, including employees:

(1) In participating positions and non-participating positions; and

(2) Not reported on the Contractor Wizard.

Section 8. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Contractor Wizard", May 2024;

(b) Internal Revenue Service Publication 1779, "Independent Contractor or Employee", March 2023;

(c) Form 4225, "Verification of Past Employment", March 2024; and

(d) Form 6756, "Annual Employer Certification of Non-Contributing Service Providers", September 2021.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8:00 a.m. to 4:30 p.m. This material is also available on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 61.5991, 61.510, 61.543, 61.552, 61.645, 61.675, 61.685
• STATUTORY AUTHORITY: KRS 61.5991(1)(c), 61.645(9)(e)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.645(9)(e) requires the Board of Trustees of the Kentucky Retirement Systems to promulgate all administrative regulations necessary or proper in order to carry out the provisions of KRS 16.505 to 16.652 and 61.510 to 61.705, and to conform to federal statutes and regulations. KRS 61.5991 requires certain employers that participate in the Kentucky Employees Retirement System to report information to the Kentucky Public Pensions Authority on some persons providing services for the participating employer as an independent contractor, a leased employee, or by any other similar employment arrangement. This administrative regulation establishes quasi-governmental employer reports on independent contractors and leased employees.
• History: 105 KAR 001:451. 49 Ky.R. 938; 1447; 1598; eff. 5-2-2023; 51 Ky.R. 1191, 1767; eff. 7-1-2025; Recodified to 105 KAR 004:451; eff. 8-5-2026.

Chapter 5 Retirement

105 KAR 5:142 Limitations and exclusions on creditable compensation in the last five (5) fiscal years of service {#sec-105-kar-5-142 omnilex-key=us-ky-regs-official--title-105--105 KAR 5:142}

Section 1. Definition. "Member" means a member of the systems with a membership date prior to January 1, 2014.

Section 2. Determining Percentage Increases for Creditable Compensation.

(1) Except as provided in subsection (2) of this section, in accordance with KRS 61.598 and 78.545, the agency shall review each of the last five (5) fiscal years of the member's employment to determine if his or her creditable compensation in any of the last five (5) fiscal years increased by ten (10) percent or more compared to the immediately preceding fiscal year.

(a) The fiscal year immediately preceding the member's last five (5) fiscal years shall be used for comparison to determine if an increase in creditable compensation of ten (10) percent or more occurred in the initial fiscal year of the member's last five (5) fiscal years.

(b) For each of the member's last five (5) fiscal years of employment, the agency shall multiply the member's creditable compensation for the previous fiscal year by 110 percent. If the member's creditable compensation in any of his or her last five (5) fiscal years of employment is greater than the member's creditable compensation from the immediately preceding fiscal year multiplied by 110 percent, the agency shall determine that an annual increase in the member's creditable compensation greater than ten (10) percent has occurred.

(c) For purposes of performing the calculations in this subsection:

1. Only fiscal years in which the member was employed in a regular full-time position in at least one (1) full month of the fiscal year shall be considered; and

2. The member's creditable compensation shall be annualized by dividing the member's creditable compensation for the fiscal year by the number of months of service credit, and multiplying by twelve (12).

(2) For members with an effective retirement date on or after January 1, 2018:

(a) The agency shall not review creditable compensation earned by the member prior to July 1, 2017; and

(b) For members with an effective retirement date on or after June 29, 2021, if a reduction in the member's creditable compensation causes his or her monthly retirement allowance to decrease by twenty-five (25) dollars or more, the member's monthly retirement allowance shall only be reduced by the amount that exceeds $24.99.

(3) The agency shall not consider the following changes in creditable compensation to be increases in creditable compensation:

(a) The employee was on leave without pay for any reason in the fiscal year(s) prior to the fiscal year that contained the increased creditable compensation for members with an effective retirement date on or after January 1, 2014, but prior to July 1, 2017; or

(b) Modifications to the accounting method for reporting employees in accordance with KRS 61.675, KRS 78.625, and 105 KAR 4:140.

Section 3. Final Administrative Determination for Members with an Effective Retirement Date on or after January 1, 2014, but Prior to July 1, 2017.

(1)

(a) Based on the review as provided in Section 2 of this administrative regulation, if the agency determines that the member's creditable compensation in any of the last five (5) fiscal years increased by more than ten (10) percent compared to the immediately preceding fiscal year, the agency shall provide written notice to the member's last participating employer of the agency's determination.

(b) If the member was employed by more than one (1) employer when the member retired, the agency shall provide written notice to each of the member's last participating employers.

(c) The written notice shall include:

1. A statement that the member's creditable compensation in one (1) or more of the last five (5) fiscal years increased by more than ten (10) percent compared to the prior fiscal year;

2. The fiscal year or fiscal years in which the creditable compensation increased by more than ten (10) percent compared to the immediately preceding fiscal year;

3. Details of each increase in creditable compensation; and

4. The amount of the additional actuarial cost to the systems attributable to the increase or increases in creditable compensation.

(2)

(a) In order to indicate that one (1) or more annual increases in creditable compensation greater than ten (10) percent in the member's last five (5) fiscal years of employment were due to a bona fide promotion or career advancement, by the end of day thirty (30) calendar days from the date the notice indicated in subsection (1) of this section was provided, the employer shall:

1. Complete and submit a valid Form 6481, Employer Request for Post-Determination of Bona Fide Promotion or Career Advancement;

2. Submit predetermination documentation if the agency previously provided a determination that a change in position or hiring of the member would be a bona fide promotion or career advancement, and provide documentation that the increase in creditable compensation for that fiscal year was due to the employer implementing the proposed change in position or hiring;

3. Provide a copy of the personnel form with the date of the promotion or advancement, to verify an explanation, and documentation supporting the assertion that the increase in creditable compensation resulted from a bona fide promotion or career advancement, that a salary increase is directly attributable to a bona fide promotion or career advancement; and

4. Effective July 1, 2024, submit a copy of the personnel form with the date of increased rate of pay, an explanation, and documentation supporting the assertion that the increase in rate of pay was authorized or funded by the legislative or administrative body of the employer or mandated in a collective bargaining agreement approved by the legislative body of the employer, if the bona fide promotion or career advancement resulted from an increase in creditable compensation for all employees in a specified class due to an increase in rate of pay authorized or funded by the legislative or administrative body of the employer or due to an increase in rate of pay mandated in a collective bargaining agreement approved by the legislative body of the employer.

(b) The employer shall report any increases in creditable compensation directly attributable to a lump-sum payment for compensatory time during the employer's normal monthly reporting in accordance with 105 KAR 4:140.

(3)

(a) The agency shall consider the following in determining if a change in position or hiring was a bona fide promotion or career advancement:

1. A valid Form 6481, Employer Request for Post-Determination of Bona Fide Promotion or Career Advancement, submitted in accordance with subsection (2)(a) of this section; and

2. Supporting documentation submitted by the employer in accordance with subsection (2)(a) of this section.

(b)

1. The agency may require the employer to provide additional information or require the employer to make certifications regarding the information and documentation submitted.

2. In accordance with KRS 16.645, 61.675, 78.545, and 78.625, the employer shall provide any additional information and certifications requested by the agency under this paragraph by the end of day thirty (30) days from the date the request for additional information was provided.

(4) The employer shall pay the additional actuarial cost to the systems attributable to any annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment if the employer fails to comply with:

(a) Subsection (2) of this section; or

(b) Subsection (3)(b) of this section if additional information is requested in accordance with that subsection.

(5)

(a) If the employer timely submits a valid Form 6481, Employer Request for Post-Determination of Bona Fide Promotion or Career Advancement, in accordance with subsection (3)(a) of this section, the agency shall issue a final administrative decision in writing informing the employer whether the annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment were due to a bona fide promotion or career advancement.

(b) If the employer disagrees with the final administrative decision by the agency, the employer may appeal the decision in accordance with Section 6 of this administrative regulation.

(c) If the employer does not file a written request for administrative hearing timely as provided in Section 6 of this administrative regulation, the employer shall pay the additional actuarial cost to the systems attributable to annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment.

(6)

(a) If an employer is required to pay the additional actuarial cost to the systems attributable to annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment, the agency shall issue an invoice to the last employer representing the actuarial cost.

(b) If the member was employed by more than one (1) employer when the member retired, the actuarial cost to the systems attributable to annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment shall be divided equally among the member's last employers. Each of the member's last employers shall receive an invoice as provided in this subsection.

(c) An employer that receives an invoice may request that the agency allow the employer to pay the cost over a period, not to exceed one (1) year, without interest and the agency shall establish a payment plan for the employer.

(d) An employer that is required to pay the additional actuarial cost shall be treated as a participating employer in the system to which the employer is required to pay the additional actuarial cost solely for purposes of making the payment required pursuant to KRS 61.598 and 78.545.

Section 4. Exemption Determination Process for Members with an Effective Retirement Date on or after January 1, 2018.

(1) This section shall only apply to members with an effective retirement date on or after January 1, 2018.

(2) Exemptions shall include:

(a) Exemptions provided in KRS 61.598(4) and 78.545;

(b) A bona fide promotion or career advancement as defined in 105 KAR 1:001; or

(c) Overtime worked from May 28, 2020, through May 11, 2021, due to local government emergencies issued on or after May 28, 2020, but prior to October 5, 2020, regardless of whether or not the National Guard was mobilized for the entire period.

(3) If the agency review, as provided in Section 2 of this administrative regulation, determines that the member's creditable compensation in any of the last five (5) fiscal years increased by more than ten (10) percent compared to the immediately preceding fiscal year, the agency shall provide the member's employer the Form 6487, Request for Member Pension Spiking Exemption Amounts. If the reductions in the member's creditable compensation would result in reduction to the member's monthly retirement allowance of less than twenty-five (25) dollars per month or the actuarial equivalent, a Form 6487 shall not be provided.

(4) The employer shall complete and submit the valid Form 6487, Request for Member Pension Spiking Exemption Amounts, and provide supporting documentation as required by KRS 16.645, 61.675, and 78.625 by the end of day thirty (30) calendar days from the date the Form 6487 was provided.

(a) To indicate that none of the annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment were due to an exemption as provided in subsection (2) of this section, the employer shall select that none of the listed exemptions are applicable on the Form 6487.

(b)

1. To indicate that one (1) or more of the annual increases in creditable compensation greater than ten (10) percent over the member's last five (5) fiscal years of employment were due to an exemption as provided in subsection (2) of this section, the employer shall select which of the listed exemption are applicable on the Form 6487. Except as provided in subsection (5)(a) of this section, the employer shall list the portion of the salary directly attributable to each exemption in the corresponding section of the Form 6487.

a. To verify that one (1) or more salary increase is directly attributable to a bona fide promotion or career advancement, the employer shall provide a copy of the personnel form with the date of the promotion or advancement, an explanation, and documentation supporting the assertion that the increase in creditable compensation resulted from a bona fide promotion or career advancement.

b. Effective July 1, 2024, to verify that one (1) or more bona fide promotion or career advancement resulted from an increase in creditable compensation for all employees in a specified class due to an increase in rate of pay authorized or funded by the legislative or administrative body of the employer or due to an increase in rate of pay mandated in a collective bargaining agreement approved by the legislative body of the employer, the employer shall submit a copy of the personnel form with the date of increased rate of pay, an explanation, and documentation supporting the assertion that the increase in rate of pay was authorized or funded by the legislative or administrative body of the employer or mandated in a collective bargaining agreement approved by the legislative body of the employer.

c. To verify that one (1) or more salary increase is directly attributable to overtime hours worked under a state or federal grant as prescribed in KRS 61.598(4)(e)1., a copy of the grant shall be submitted with the specific language in the grant requiring overtime highlighted or otherwise emphasized.

d. Except as provided in subsection (2)(c) of this section, to verify that one (1) or more salary increase is directly attributable to a local state of emergency where the Kentucky National Guard was mobilized as prescribed in KRS 61.598(4)(f)2., the applicable Executive Order number that mobilized the National Guard shall be provided.

(5)

(a) The employer shall report any increases in creditable compensation directly attributable to a lump-sum payment for compensatory time, a lump-sum payment made pursuant to alternate sick leave, or leave without pay during the employer's normal monthly reporting in accordance with 105 KAR 4:140.

(b) If, upon review by the employer of the Form 6487, Request for Member Pension Spiking Exemption Amounts, adjustments to the reported salaries are required, then the employer shall make those adjustments during the next monthly reporting cycle pursuant to KRS 16.645, 61.675, and 78.625.

(6)

(a) The agency may require the employer to provide additional information or require the employer to make certifications regarding the information and documentation submitted.

(b) In accordance with KRS 16.645, 61.675, and 78.625, the employer shall provide any additional information and certifications requested by the agency under this subsection by the end of day thirty (30) days from the date the request for additional information was provided.

(7)

(a) Following review of the completed Form 6487, Request for Member Pension Spiking Exemption Amounts, and any additional information and certifications, the agency shall make a final administrative decision in accordance with Section 5 of this administrative regulation.

(b) The agency shall issue a final administrative decision in accordance with Section 5 of this administrative regulation if:

1. A valid Form 6487 is not submitted timely in accordance with subsection (4) of this section; or

2. Additional information requested in accordance with subsection (6) of this section is not submitted timely.

Section 5. Final Administrative Decisions for Members with an Effective Retirement Date on or after January 1, 2018.

(1) This section shall only apply to members with an effective retirement date on or after January 1, 2018.

(2)

(a) If the agency determines an increase in creditable compensation of more than ten (10) percent over the immediately preceding fiscal year, as provided in Section 2 of this administrative regulation, is not directly attributable to any of the listed exemptions in Section 4(2) of this administrative regulation, and no reporting information needs to be corrected, then the increase in creditable compensation above ten (10) percent shall not be used to calculate the member's retirement allowance, unless the reductions in the member's creditable compensation would result in reduction to the member's monthly retirement allowance of less than twenty-five (25) dollars per month or the actuarial equivalent.

(b) The agency shall notify the member of the final administrative decision which shall provide the member's benefit adjustment details. If the member disagrees with the final administrative decision by the agency, he or she may appeal the decision in accordance with Section 6 of this administrative regulation.

(3) Pursuant to KRS 61.598(2)(c)2. and 78.545, the agency shall not issue a refund to the employer for the excess employer contributions. The agency shall utilize any employer contributions directly attributable to the reduction in creditable compensation to pay the unfunded liability of the pension fund in which the retiring member participated.

(4)

(a) Pursuant to KRS 61.598(2)(c)1. and 78.545, the member shall receive a refund of all pre-tax and post-tax member contributions and interest directly attributable to the reduction in creditable compensation.

1. Pre-tax member contributions shall be refunded to the member by the employer that picked-up the contributions.

2. Post-tax member contributions shall be refunded to the member directly by the agency.

3. Interest earned on pre-tax and post-tax member contributions shall be refunded to the member directly by the agency.

(b)

1. If a member files an appeal in accordance with Section 6 of this administrative regulation, the refunds indicated in this subsection shall be placed on hold during the pendency of the appeal.

2. No additional interest shall accrue during the pendency of the appeal.

Section 6. Appeal.

(1)

(a) For members with an effective retirement date on or after January 1, 2014, but prior to July 1, 2017, pursuant to KRS 61.645(16) and 78.782(16), if the employer disagrees with the final administrative decision in accordance with Section 3 of this administrative regulation, the employer shall file a written request for an administrative hearing pursuant to KRS Chapter 13B by the end of day thirty (30) calendar days from the date of the final administrative decision.

(b) In accordance with KRS 61.598(7) and 78.545, the employer's right to appeal is limited to the issue of whether the agency correctly determined that the annual increases in the member's creditable compensation greater than ten (10) percent were not due to a bona fide promotion or career advancement.

(c) Pursuant to KRS Chapter 13B.090(7), the employer has the burden to show its entitlement to the benefit of not paying the additional actuarial costs related to the employer's appeal in accordance with this subsection, and the ultimate burden of persuasion on that issue.

(2)

(a) For members with an effective retirement date on or after January 1, 2018, pursuant to KRS 61.645(16) and 78.782(16), if the member disagrees with the final administrative decision by the agency in accordance with Section 5 of this administrative regulation, the member shall file a written request for an administrative hearing to be held in accordance with KRS Chapter 13B by the end of day thirty (30) calendar days from the date of the final administrative decision.

(b) The member's right to appeal is limited to the issue of whether the agency correctly determined that the annual increases in the member's creditable compensation were not due to one (1) of the exemptions found in KRS 61.598(4) and 78.545, and 105 KAR 1:001(14).

(c) Pursuant to KRS Chapter 13B.090(7), the agency has the burden to show the propriety of the agency action to remove or reduce benefits related to the member appeals in accordance with this subsection, and the ultimate burden of persuasion as to that issue.

Section 7. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6481, "Employer Request for Post-Determination of Bona Fide Promotion or Career Advancement", September 2024; and

(b) Form 6487, "Request for Member Pension Spiking Exemption Amounts", September 2024.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8 a.m. to 4:30 p.m., or on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.645, 61.598, 61.645, 61.675, 78.545, 78.625, 78.782
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.598(6), 78.545
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.598(6) and 78.545 authorize the Kentucky Public Pensions Authority to promulgate an administrative regulation to administer the limitations and exclusions on increases in creditable compensation codified in KRS 61.598 and 78.545. This administrative regulation establishes limitations and exclusions on increases in creditable compensation in the last five (5) years of service for retiring members with a membership date prior to January 1, 2014 in accordance with KRS 61.598 and 78.545.
• History: 105 KAR 001:142. 51 Ky.R. 432, 864; eff. 2-4-2025; Recodified to 105 KAR 005:142; eff. 8-5-2026.

105 KAR 5:200 Retirement procedures {#sec-105-kar-5-200 omnilex-key=us-ky-regs-official--title-105--105 KAR 5:200}

Section 1. Definitions.

(1) "Applicant" means a participant who has:

(a) Applied or is applying for retirement in accordance with KRS 61.590 and 78.545; or

(b) Been approved for retirement but has not yet received a retirement allowance.

(2) "Disability retirement" means a retirement allowance a member is eligible to receive based on an incapacity as established in KRS 16.582, 61.600, 61.621, 61.665, 78.545, 78.5522, and 78.5524.

(3) "Early Retirement date" means a retirement date prior to a member's normal retirement date that is not a disability retirement.

(4) "Effective retirement date" means the date upon which a member's service retirement allowance or disability retirement allowance began or will begin, which might be a different date than the date the payments are initiated.

(5) "Service retirement" means a retirement allowance a participant is eligible to receive as prescribed by KRS 16.576, 16.577, 16.583(6), 61.559, 61.595(2), 61.597(6), 78.5510(2) through (3), 78.5512(6), 78.5514, and 78.5516(6).

(6) "Termination Date" means the date on which the member has ceased or will cease his or her employment relationship with all participating employers.

(7) "Unsubstantiated service" means:

(a) For school board employees, that:

1. The actual days worked averaged or is expected to average less than eighty (80) hours per month in a fiscal year; or

2. Service is incomplete; or

(b) For non-school board employees, that:

1. The actual worked time averaged or is expected to average less than 100 hours per month in a fiscal or calendar year; or

2. Service is incomplete.

Section 2. Retirement Eligibility Requirements.

(1) Service retirement eligibility shall be determined in accordance with:

(a) For applicants with a participation date prior to September 1, 2008, KRS 16.576(1)(a), 16.577, 61.559(1) and (2), 61.592(4), 78.5510(2), and 78.5514(2);

(b) For applicants with a participation date on or after September 1, 2008, but prior to January 1, 2014, KRS 16.576(1)(b), 16.577, 61.559(3), 61.592(4), 78.5510(3), and 78.5514(3); and

(c) For applicants with a participation date on or after January 1, 2014, KRS 16.583(6), 61.592(4), 61.597(6), 78.5512(6), and 78.5516(6).

(2) Disability retirement eligibility shall be determined in accordance with KRS 16.582, 61.600, 61.621, 61.665, 78.545, 78.5522, 78.5524, and 105 KAR 3:210.

Section 3. Application for Retirement.

(1) The applicant shall file a valid Form 6000, Notification of Retirement, incorporated by reference in 105 KAR 5:202, no earlier than six (6) months prior to his or her desired effective retirement date.

(2)

(a) The agency shall not process an invalid Form 6000, Notification of Retirement. The Form 6000 shall be invalid if it:

1. Is incomplete;

2. Does not include all indicated required documentation;

3. Is not signed by the applicant and a spouse or other witness on the indicated place in the Certification of Bona Fide Separation from Service and Notification of Retirement Section unless submitted through the Self-service website with a PIN; or

4. Is not signed by the applicant and a witness on the indicated place in the Member's Statement of Disability section if the applicant is applying for disability retirement unless submitted through the Self-service website with a PIN.

(b) If the agency finds the Form 6000 to be invalid, the agency shall provide notification to the applicant of the actions necessary for completion or correction.

(3) If the applicant indicates on the Form 6000, Notification of Retirement, that he or she is simultaneously retiring with reciprocity and he or she fails to retire from all state administered retirement systems indicated on the Form 6000, either simultaneously or with an effective retirement date within one (1) month of the applicant's effective retirement date with the systems, the applicant shall not be eligible to retire with reciprocity.

(4)

(a) If the applicant fails to designate a federal tax withholding preference, the agency shall withhold federal tax based on the default withholding provided by the Internal Revenue Service.

(b) Once the applicant begins receiving a retirement allowance, he or she may establish or change his or her federal tax withholding preference through the Self Service Web site or by filing a valid Form 6017, Withholding Certificate for Periodic Pension or Annuity Payments.

(5)

(a) The applicant's estate shall be the beneficiary of the $5,000 death benefit if the applicant fails to:

1. Designate a beneficiary of the $5,000 death benefit; or

2. Accurately fill out the $5,000 Death Benefit Section of the Form 6000, Notification of Retirement, designating a single beneficiary.

(b) Once the applicant begins receiving a retirement allowance, he or she may designate or change the beneficiary of the $5,000 death benefit through the Self Service Web site or by filing a valid Form 6030, Death Benefit Designation.

(6) The applicant shall authorize the direct deposit of his or her retirement allowance on the Form 6000, Notification of Retirement.

(7)

(a) If the applicant does not have an account with a financial institution or the applicant's financial institution does not participate in the electronic funds transfer program, the applicant shall file a valid Form 6135, Request for Payment by Check, simultaneously with the Form 6000, Notification of Retirement.

(b) Once a member begins receiving a retirement allowance, he or she may change the designated financial institution or account through the Self Service Web site or by filing a valid Form 6130, Authorization for Deposit of Retirement Payment.

(8)

(a) Only applicants applying for disability retirement shall complete the Member's Statement of Disability section of the Form 6000, Notification of Retirement. These applicants shall also comply with the requirements of 105 KAR 3:210.

(b) Applicants not applying for disability retirement shall not complete the Member's Statement of Disability section of the Form 6000, Notification of Retirement.

(9)

(a) The applicant's current employer shall complete the Employer Certification of Leave Balances and Final Salary section of the Form 6000, Notification of Retirement, as provided in 105 KAR 4:140, Section 15. If the employer does not comply with the requirements of 105 KAR 4:140, Section 15(1), the agency shall utilize the information previously reported to the agency by the applicant's employer and former employers in accordance with KRS 61.675 and 78.625 and shall not include sick leave, compensatory time, projected salary, projected service, or unsubstantiated service in the agency's initial calculations of the applicant's retirement allowance or eligibility to retire, except as provided in paragraph (b) of this subsection.

(b) If the application is for disability retirement, the employer shall comply with the requirements of 105 KAR 3:210.

(c) The Employer Certification of Leave Balances and Final Salary section of the Form 6000, Notification of Retirement, shall be signed by a person designated by the employer on file at the retirement office.

Section 4. Verification of Date of Birth.

(1)

(a) The applicant shall file verification of his or her date of birth and verification of the date of birth of the beneficiary named on the applicant's Form 6000, Notification of Retirement:

1. Prior to the agency processing the application; and

2. For disability retirement or retirement at an early retirement date, by the end of day six (6) months following the date the valid Form 6000 was filed, or the Form 6000 shall be invalid.

(b) The agency shall accept one (1) or more of the following as verification of date of birth of the applicant or beneficiary:

1. Age record from the Social Security Administration;

2. Immigration and naturalization service records;

3. Birth certificate;

4. Military discharge;

5. U.S. passport;

6. Driver's license or state-issued identification that requires birth verification; or

7. Other reliable proof of date of birth that may be used by the courts to verify the person's date of birth.

(2) If the applicant's or beneficiary's name is no longer the same as the name listed on the verification of date of birth, the applicant or beneficiary shall file a social security card, driver's license, marriage certificate, court order, passport, or legally binding documentation verifying the name change.

Section 5. Additional Requirements.

(1) Based on the salary reported to the agency and information provided by the applicant's employer, the agency shall provide an estimate of the applicant's retirement allowance on the Form 6010, Estimated Retirement Allowance, which shall include:

(a) The payment options and amounts available to the applicant;

(b) A place to designate the applicant's choice of payment option;

(c) A place for the applicant to sign and date; and

(d) A place for the spouse or other witness' signature.

(2)

(a)

1. The applicant shall complete and file a valid Form 6010, Estimated Retirement Allowance:

a. For disability retirement, in accordance with 105 KAR 3:210; or

b. For retirement at an early retirement date, by the end of day six (6) months following his or her effective retirement date.

2. A Form 6010, Estimated Retirement Allowance, shall not be valid if not completed in its entirety and signed by the applicant and a spouse or other witness.

(b)

1. If the applicant for retirement at an early retirement date fails to comply with paragraph (2)(a)2. of this subsection, the Form 6000, shall be void.

2. The applicant may file a new valid Form 6000 to re-apply for retirement benefits. If the applicant files a new valid Form 6000, he or she shall select a new effective retirement date that shall not be prior to the date the new Form 6000 is filed.

(3) If an applicant is approved for disability retirement, he or she shall comply with the requirements of 105 KAR 3:210 prior to receiving the approved disability retirement allowance.

(4) If the applicant selects a monthly retirement allowance or a partial lump-sum payment option and is eligible for hospital and medical insurance in accordance with KRS 16.645, 61.702, and 78.5536, he or she shall be provided with information on how to apply for hospital and medical insurance in accordance with 105 KAR 5:411.

(5)

(a) If the applicant selects an actuarial equivalent refund, lump-sum refund, or partial lump-sum payment option, he or she shall complete and file a valid Form 6025, Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution, selecting the option for payment.

(b) If the applicant intends to have the funds rolled over directly into an IRA or other qualified plan, the applicant shall have the trustee or institution relevant to the IRA or other qualified plan complete the applicable section of the Form 6025 certifying that the rollover shall be accepted.

Section 6. Voiding the Form 6000.

(1) The Form 6000, Notification of Retirement, shall be void if:

(a) The Form 6000 is invalid, and the applicant fails to comply with Section 3(2) and Section 4 of this administrative regulation;

(b) The Form 6000 is withdrawn;

(c) The applicant is applying for disability retirement;

(d) The applicant is approved for retirement but fails to complete the requirements of Section 5 of this administrative regulation;

(e) The applicant died while the application is being processed and the beneficiary, representative of the deceased applicant's estate, or trustee fails to complete the requirements of Section 9 of this administrative regulation; or

(f) The applicant did not indicate on the Form 6000 that he or she was applying for disability retirement and the applicant is not eligible for service retirement.

(2)

(a) If an applicant's Form 6000, Notification of Retirement, is void, the beneficiary or beneficiaries and contingent beneficiary or beneficiaries designated on the most recently filed valid Form 2035, Beneficiary Designation, shall remain in full force and effect, except as provided in paragraph (b) of this subsection.

(b) This subsection shall not apply to a retirement account from which the applicant was already receiving a retirement allowance.

Section 7. Administration of the Retirement Allowance.

(1)

(a) The agency shall not process a monthly retirement allowance until the applicant has completed and filed all requirements of this administrative regulation.

(b) If an applicant is retiring from any other state-administered retirement system with reciprocity, the agency shall hold the retirement allowance payment until the other state-administered retirement system finalizes the applicant's retirement from its retirement system in accordance with KRS 61.680(8) and 78.5542.

(2) The agency shall not process an actuarial equivalent refund or lump sum refund until the applicant has complied with all requirements of this administrative regulation, the applicant's employer has submitted proof of the applicant's employment termination, and the applicant's employer has reported all creditable compensation and accumulated sick leave.

(3)

(a) The agency shall not process the first retirement allowance payment earlier than the month of the applicant's effective retirement date as indicated on the Form 6010, Estimated Retirement Allowance.

(b) The agency shall process the first service retirement allowance payment the month following the month:

1. Of the applicant's last termination date; and

2. That all applicable forms and documents as established by this administrative regulation are on file.

(c) The agency shall process the disability retirement allowance payment in accordance with 105 KAR 3:210.

Section 8. Subsequent Application for Retirement While a Prior Application is Pending. If a valid subsequent application for retirement that complies with Section 3 of this administrative regulation is filed while a prior application is pending:

(1) If the subsequent application is filed by 11:59 p.m. Eastern Time on the last day of the month prior to the month of the applicant's initial retirement allowance payment, the subsequent application shall supersede the prior application on file; or

(2) If the subsequent application is filed after 11:59 p.m. Eastern Time on the last day of the month prior to the month of the applicant's initial retirement allowance payment, the subsequent application shall not be valid.

Section 9. Death During the Retirement Application Process.

(1) Except as provided in subsection (2) of this section, if the applicant dies prior to the first day of the month in which the applicant would have received his or her first retirement payment, any benefits payable to a beneficiary or estate shall be determined pursuant to KRS 16.578, 61.621, 61.640, 78.5532, and 105 KAR 4:180.

(2) If an applicant for disability retirement dies prior to receiving his or her first retirement payment, eligibility for a disability retirement allowance that might be payable to a beneficiary, surviving spouse, dependent child, or estate shall be determined pursuant to KRS 16.582, 61.600, 61.621, 61.665, 78.545, 78.5522, 78.5524, and 105 KAR 3:210.

Section 10. Exceptions to Changing the Beneficiary After Retirement.

(1) Except as provided in this section, the beneficiary indicated on the Form 6000 shall not be changed on or after the first day of the month in which a recipient receives his or her first retirement allowance payment.

(2)

(a) In accordance with KRS 61.542(5)(a) and 78.545, a beneficiary may be changed at any time by a recipient receiving a monthly retirement allowance under:

1. The basic payment option;

2. A period certain option as provided by KRS 61.635(5) through (7) and 78.545; or

3. The Social Security adjustment option without survivor rights as provided by KRS 61.635(8)(a) and 78.545.

(b) To change the beneficiary as provided in this subsection, the recipient shall file a valid Form 6036, Beneficiary Designation Change. The newly designated beneficiary shall be effective the date the valid Form 6036 is on file.

(c) The recipient shall not change the payment option selected at retirement.

(3)

(a) In accordance with KRS 61.542(5)(b) and 78.545, a beneficiary may be changed only once by the end of day 120 calendar days following the date of a recipient's marriage or remarriage.

(b) To change the beneficiary as provided in this subsection, the recipient shall file a valid Form 6035, Beneficiary and Payment Option Change, by the end of day 100 calendar days following the date of a recipient's marriage or remarriage that includes:

1. Verification of the date of birth of the new beneficiary as provided in Section 4 of this administrative regulation;

2. The recipient and new beneficiary's marriage certificate; and

3. If a prior spouse was the beneficiary, a divorce decree or death certificate.

(c) Once a valid Form 6035, Beneficiary and Payment Option Change, is on file, the agency shall provide the recipient with a Form 6050 Payment Option Change Designation. The recipient shall complete and file a valid Form 6050 selecting his or her new payment option as established in KRS 61.542(5)(b)2. and 78.545 by the end of day 120 calendar days following the date of his or her marriage or remarriage.

(d) A change in payment option pursuant to this subsection shall not affect payments to an alternate payee under a Qualified Domestic Relations Order.

(e)

1. If the recipient fails to timely complete all requirements of this subsection, the beneficiary previously on file will remain the beneficiary.

2. If no beneficiary was previously on file, the beneficiary shall be the estate.

Section 11. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 2035, "Beneficiary Designation", December 2024;

(b) Form 6010, "Estimated Retirement Allowance", April 2024;

(c) Form 6017, "Tax Withholding Certificate for Periodic Pension or Annuity Payments", January 2024;

(d) Form 6025, "Direct Rollover/Direct Payment Election Form for a Member, Beneficiary, or Alternate Payee Regarding an Eligible Rollover Distribution ", June 2023;

(e) Form 6030, "Death Benefit Designation", November 2024;

(f) Form 6035, "Beneficiary and Payment Option Change", April 2024;

(g) Form 6036, "Beneficiary Designation Change", April 2024;

(h) Form 6050 "Payment Option Change Designation", April 2022;

(i) Form 6130, "Authorization for Deposit of Retirement Payment", November 2024; and

(j) Form 6135, "Request for Payment by Check", April 2024.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the agency's Web site at https://kyret.ky.gov.

History

• RELATES TO: KRS 16.505-16.652, 61.505, 61.510-61.705, 78.510-78.852
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.590(1), 78.545
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with, and are necessary or proper in order to carry out the provisions of, KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.590(1) and 78.545 require that all forms and information required by the board are on file to receive retirement benefits. This administrative regulation establishes the procedures and forms required to apply for and receive retirement benefits.
• History: 105 KAR 001:200. 18 Ky.R. 931; Am. 1324; eff. 11-8-1991; 21 Ky.R. 1523; eff. 2-8-1995; 23 Ky.R. 2834; 3311; 3554; eff. 2-26-1997; 27 Ky.R. 1048; 1443; eff. 12-21-2000; 29 Ky.R. 765; 1248; eff. 11-12-2002; 31 Ky.R. 383; 700; eff. 11-5-2004; 34 Ky.R. 117; 542; eff. 10-5-2007; 35 Ky.R. 108, Am. 536; eff. 10-3-2008; 42 Ky.R. 452; eff. 11-6-2015; 46 Ky.R. 74, 879, eff. 10-4-2019; 51 Ky.R. 1864; 52 Ky.R. 169; eff. 11-4-2025; Recodified to 105 KAR 005:200; eff/ 8-5-2026.

105 KAR 5:202 Notification of Retirement {#sec-105-kar-5-202 omnilex-key=us-ky-regs-official--title-105--105 KAR 5:202}

Section 1. Uses.

(1) The Form 6000, Notification of Retirement, shall be used by participants to apply for:

(a) Retirement based on service as established in KRS 16.576, 16.577, 16.583, 61.559, 61.595(2), 61.597(6), 78.5510(2) through (3), 78.5512(6), 78.5514, and 78.5516; or

(b) Disability retirement as established in KRS 16.582, 61.600, 61.621, 61.665, 78.545, 78.5522, and 78.5524.

(2) The Form 6000, Notification of Retirement, shall be used as established by:

(a) 105 KAR 1:020;

(b) 105 KAR 5:202;

(c) 105 KAR 3:210;

(d) 105 KAR 3:310;

(e) 105 KAR 5:390; and

(f) 105 KAR 3:455;

Section 2. Incorporation by Reference.

(1) The Form 6000, "Notification of Retirement", November 2024, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the agency's website at https://kyret.ky.gov.

History

• RELATES TO: KRS 16.505 - 16.652, 61.505, 61.610 - 61.705, 78.510 - 78.852
• STATUTORY AUTHORITY: KRS 61.505
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with, and are necessary or proper in order to carry out the provisions of, KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. This administrative regulation establishes the use of the Form 6000, Notification of Retirement.
• History: 105 KAR 001:202. 51 Ky.R. 1913; eff. 11-4-2025; Recodified to 105 KAR 005:202; eff. 8-5-2026.

105 KAR 5:390 Employment after retirement {#sec-105-kar-5-390 omnilex-key=us-ky-regs-official--title-105--105 KAR 5:390}

Section 1. Definitions.

(1) "Bona fide separation from service" means:

(a) A cessation of the employment relationship between the member and the member's employer; and

(b) There is no prearranged agreement.

(2) "Employee" means a retired member who is performing services for an employer in a manner that demonstrates an employment relationship under the common law factors used by the Internal Revenue Service.

(3) "Non-participating position" means any position of employment with a participating employer other than a regular full-time position or a regular full-time officer position.

(4) "Participating position" means a regular full-time position or a regular full-time officer position.

(5) "Prearranged agreement" means a verbal or written, explicit or implicit agreement:

(a) Between the retired member and his or her employer for the retired member to reemploy with the employer within twelve (12) months after the retired member's effective retirement date; and

(b) That occurred prior to the retired member's effective retirement date.

(6) "Retirement date" means the member's effective retirement date as described in KRS 61.590(5) and 78.545(4).

Section 2. Form 6000 Certification.

(1) In order to retire with the systems, an eligible member shall complete and file a valid Form 6000, Notification of Retirement, which shall comply with the requirements of KRS 61.590, KRS 78.545, and 105 KAR 5:200.

(2) The agency shall not process a Form 6000, Notification of Retirement, until the member certifies on the Form 6000 that there is no prearranged agreement for reemployment with a participating employer after the member's retirement date.

Section 3. Employment After Retirement.

(1) A retired member who is reemployed with a participating employer in any position, including participating positions and non-participating positions, shall have:

(a) A bona fide separation from service; and

(b) A break in service as provided in subsection (3) of this section.

(2)

(a) A retired member who is reemployed with a participating employer in any position, including participating positions and non-participating positions shall not have a prearranged agreement.

(b) An elected official who is reelected and takes office in the same elected position as he or she held prior to retirement within twelve (12) months after his or her effective retirement date shall be deemed to have a prearranged agreement.

(3) "Break in service" as provided in this section shall require that:

(a) For effective retirement dates prior to January 1, 2024:

1. A member who retired from a hazardous position shall have a one (1) month break in service before returning to work with any participating employer in a regular full-time hazardous participating position.

2. Except as provided in subparagraph 1. of this paragraph, a member who retired from a hazardous or nonhazardous position shall have a three (3) month break in service before returning to work with any participating employer in a participating or nonparticipating position.

(b) For effective retirement dates beginning January 1, 2024, a member who retired from a hazardous or nonhazardous position shall have a one (1) month break in service before returning to work with any participating employer in a participating or nonparticipating position.

(4) If a retired member seeks reemployment with a participating employer within twelve (12) months of his or her retirement date, then the following shall be filed:

(a) A valid Form 6751, Employer Certification Regarding Reemployment, completed by the participating employer, which shall certify that there was no prearranged agreement;

(b) A valid Form 6754, Member Reemployment Certification, completed by the retired member; and

(c) Any other information requested by the agency from the participating employer and the retired member pursuant to KRS 61.637(8) and 78.5540(2)(a).

(5)

(a) The agency shall issue a final determination to the retired member no later than thirty (30) calendar days after receipt of all required forms and additional requested information.

(b) If the agency determines that the retired member failed to comply with any of the requirements of this section or federal law, the retired member's retirement shall be voided and he or she shall repay all retirement allowances, dependent child payments, and hospital and medical insurance plan premiums paid by the systems.

Section 4. Independent Contractors and Leased Employees.

(1) If a retired member seeks to provide services to a participating employer as an independent contractor, under a professional services contract, or as a leased employee within twelve (12) months of the retired member's retirement date, then the following shall be filed:

(a) A valid Form 6752, Employer Certification of Independent Contractor/Leased Employee, completed by the participating employer;

(b) A valid Form 6754, Member Reemployment Certification, completed by the retired member;

(c) A complete copy of any contract under which services are provided by the retired member to the participating employer; and

(d) Any other information requested by the agency from the participating employer and the retired member pursuant to KRS 61.637(9) and 78.5540(2)(b).

(2) The agency shall apply common law factors used by the Internal Revenue Service (IRS), in accordance with IRS Publication 1779, Independent Contractor or Employee, to determine whether a retired member is an employee of the participating employer or an independent contractor of the participating employer. The agency may also consider rules issued by the United States Department of Labor for determining whether a worker is an employee or an independent contractor under federal wage and hour law.

(3)

(a) The agency shall issue a final determination to the retired member no later than thirty (30) calendar days after receipt of all required forms and requested information.

(b) If the agency determines that the retired member is an employee of the participating employer, rather than an independent contractor or leased employee through a leasing company, staffing agency, or other entity:

1. The retired member shall be subject to the provisions of Section 3 of this administrative regulation and shall have a "bona fide separation from service" and "break in service"; and

2. The employer shall:

a. Report the retired member as required by KRS 61.675, 78.625, and 105 KAR 4:140;

b. Pay employer contributions for the retired member as specified by KRS 61.565, 61.702, and 78.635; and

c. Reimburse the systems for the cost of hospital and medical insurance plan premiums paid by the systems for the retired member.

(c) If the agency determines that the retired member is an independent contractor or leased employee through a leasing company, staffing agency, or other entity, the retired member may still be required to observe a bona fide separation from service to the extent required by federal law.

Section 5. Volunteers.

(1) If a retired member seeks to volunteer with a participating employer within twelve (12) months of the retired member's retirement date, then the following shall be filed:

(a) A valid Form 6753, Employer Certification of Volunteer, completed by the participating employer;

(b) A valid Form 6754, Member Reemployment Certification, completed by the retired member; and

(c) Any other information requested by the agency from the participating employer and retired member pursuant to KRS 61.637(8) and 78.5540(2)(a).

(2)

(a) The agency shall issue a final determination to the retired member no later than thirty (30) calendar days after receipt of all required forms and requested information.

(b) If the Agency determines that the retired member is an employee of the participating employer, rather than a volunteer:

1. The retired member shall be subject to the provisions of Section 3 of this administrative regulation and shall have a "bona fide separation from service" and "break in service"; and

2. The employer shall:

a. Report the retired member as required by KRS 61.675, 78.625, and 105 KAR 4:140;

b. Pay employer contributions for the retired member as specified by KRS 61.565, 61.702, and 78.635; and

c. Reimburse the systems for the cost of hospital and medical insurance plan premiums paid by the systems for the retired member.

(c) If the agency determines that the retired member is a volunteer, the retired member may still be required to observe a bona fide separation from service to the extent required by federal law.

Section 6. Hospital and Medical Insurance Plan Premium Reimbursements for Retired Members Reemployed by Multiple Participating Employers.

(1) This section shall only apply to a retired member who is reemployed by a participating employer on or after September 1, 2008 in accordance with KRS 61.637(17) and 78.5540(4).

(2) If a retired member is reemployed by multiple participating employers in a month in two (2) or more regular full-time positions, one (1) regular full-time position and one (1) or more part-time positions pursuant to KRS 61.680(6) and 78.545, or multiple part-time positions pursuant to KRS 61.680(6) and 78.545, then:

(a) Each participating employer shall be responsible for reimbursing the systems for a portion of the hospital and medical insurance plan premium paid by the systems to provide coverage for the retired member for that month; and

(b) The portion shall be equal to the cost of the premium divided by the number of participating employers that are not exempt from reimbursement of hospital and medical insurance plan premiums.

(3) Participating employers that are exempt from reimbursement of hospital and medical insurance plan premiums under Section 7 of this administrative regulation, or by virtue of being a school board employing the retired member for eighty (80) calendar days or less during the fiscal year, are not responsible for hospital and medical insurance plan premiums under this section.

Section 7. Exemption for Payment Of Employer Contributions and Reimbursement of Hospital and Medical Insurance Plan Premiums for Retired Members Reemployed as Police Officers and School Resource Officers.

(1) This section shall only apply to a retired member who is reemployed by a participating employer on or after September 1, 2008 in accordance with KRS 61.637(17) and 78.5540(4).

(2)

(a) A participating employer shall be exempt from paying employer contributions and from reimbursing the systems for the cost of the hospital and medical insurance plan premiums paid by the systems for a retired member reemployed as a police officer pursuant to KRS 70.291 to 70.293 for a term of appointment of no more than one (1) year if a valid Form 6760, County Police or Sheriff Appointment of Retired Police Officer, and the supporting documentation required by the Form 6760 are on file prior to the start of the retired member's term of appointment.

(b) If a valid Form 6760, County Police or Sheriff Appointment of Retired Police Officer, and the supporting documentation required by the Form 6760 are not on file prior to the start of the retired member's term of appointment as a police officer pursuant to KRS 70.291 to 70.293, then the participating employer shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for a retired member reemployed as a police officer pursuant to KRS 70.291 to 70.293 effective in the month after a valid Form 6760 and supporting documentation are on file.

(3)

(a) For each subsequent term of reappointment after the initial term of appointment listed on the valid Form 6760, County Police or Sheriff Appointment of Retired Police Officer, described in subsection (1) of this section, the participating employer shall be exempt from paying employer contributions and from reimbursing the systems for the cost of the hospital and medical insurance plan premiums paid by the systems for a retired member reemployed as a police officer pursuant to KRS 70.291 to 70.293 for a term of reappointment of no more than one (1) year if a valid Form 6764, Recertification of Retired Police Officer, is on file prior to the start of the retired member's term of reappointment.

(b) If a valid Form 6764, Recertification of Retired Police Officer, is not on file prior to the start of the retired member's term of reappointment as a police officer pursuant to KRS 70.291 to 70.293, then the participating employer shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for a retired member reemployed as a police officer pursuant to KRS 70.291 to 70.293 effective in the month after a valid Form 6764 and supporting documentation are on file.

(4)

(a) A participating employer shall be exempt from paying employer contributions and from reimbursing the systems for the cost of the hospital and medical insurance plan premiums paid by the systems to provide coverage for a retired member reemployed as a school resource officer pursuant to KRS 158.441 for a term of appointment of no more than one (1) year if a valid Form 6766, Appointment of Retired School Resource Officer, and the supporting documentation required by the Form 6766 are on file prior to the start of the retired member's term of appointment.

(b) If a valid Form 6766, Appointment of Retired School Resource Officer, and the supporting documentation required by the Form 6766 are not on file prior to the start of the retired member's term of appointment, then the participating employer shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for a retired member reemployed as a school resource officer pursuant to KRS 158.441 effective in the month after a valid Form 6766 and supporting documentation are on file.

(5)

(a) A participating employer shall be exempt from paying employer contributions and from reimbursing the systems for the cost of the hospital and medical insurance plan premiums paid by the systems for a retired member reemployed as a Kentucky State Police school resource officer pursuant to KRS 158.441 for a term of appointment of no more than one (1) year if a valid Form 6767, Appointment of Kentucky State Police School Resource Officer, and the supporting documentation required by the Form 6767 are on file prior to the start of the retired member's term of appointment.

(b) If a valid Form 6767, Appointment of Kentucky State Police School Resource Officer, and the supporting documentation required by the Form 6767 are not on file prior to the start of the retired member's term of appointment, then the participating employer shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for a retired member reemployed as a Kentucky State Police school resource officer pursuant to KRS 158.441 effective in the month after a valid Form 6767 and supporting documentation are on file.

(6)

(a) A participating employer shall be exempt from paying employer contributions and from reimbursing the systems for the cost of the hospital and medical insurance plan premiums paid by the systems for a retired member reemployed as a police officer by a postsecondary institution pursuant to KRS 164.952 for a term of appointment of no more than one (1) year if a valid Form 6768, Postsecondary Institution Appointment of Retired Police Officer, and the supporting documentation required by the Form 6768 are on file prior to the start of the retired member's term of appointment.

(b) If a valid Form 6768, Postsecondary Institution Appointment of Retired Police Officer, and the supporting documentation required by the Form 6768 are not on file prior to the start of the retired member's term of appointment, then the participating employer shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for a retired member reemployed as a police officer by a postsecondary institution pursuant to KRS 164.952 in the month after a valid Form 6768 and supporting documentation are on file.

(7) A participating employer shall not be eligible for exemption from payment of employer contributions or from reimbursing the systems for the costs of hospital and medical insurance plan premiums for any retired members reemployed as a police officer pursuant to KRS 95.022 unless a valid Form 6769, Certification of Employed Police Officers Calendar Year 2015, is on file.

(8)

(a) A participating employer with a valid Form 6769, Certification of Employed Police Officers Calendar Year 2015, on file shall be exempt from paying employer contributions and from reimbursing the systems for the costs of hospital and medical insurance plan premiums for a retired member reemployed as a police officer pursuant to KRS 95.022 for a term of appointment of no more than one (1) year if a valid Form 6770, City Appointment of Retired Police Officer, and the supporting documentation required by the Form 6770 are on file prior to the start of the retired member's term of appointment.

(b) If a valid Form 6770, City Appointment of Retired Police Officer, and the supporting documentation required by the Form 6770 are not on file prior to the start of the retired member's term of appointment, then the participating employer with a valid Form 6769, Certification of Employed Police Officers Calendar Year 2015, on file shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for a retired member reemployed as a police officer pursuant to KRS 95.022 effective in the month after a valid Form 6770 and supporting documentation are on file.

(9)

(a) For each subsequent term of reappointment after the initial term of appointment listed on the valid Form 6770, City Appointment of Retired Police Officer, described in subsection (7) of this section, the participating employer with a valid Form 6769, Certification of Employed Police Officers Calendar Year 2015, on file shall be exempt from paying employer contributions and hospital and medical insurance plan premiums paid by the systems for a retired member reemployed as a police officer pursuant to KRS 95.022 for a term of reappointment of no more than one (1) year if a valid Form 6774, City Recertification of Retired Police Officer, is on file prior to the start of the retired member's term of reappointment.

(b) If a valid Form 6774, City Recertification of Retired Police Officer, is not on file prior to the start of the retired member's term of reappointment, then the participating employer shall be exempt from paying employer contributions and reimbursements of hospital and medical insurance plan premiums for retired member reemployed as a police officer pursuant to KRS 95.022 in the month after a valid Form 6774 is on file.

(10) If the appropriate form as required by this section is not on file, then the employer shall not be exempt from paying employer contributions and reimbursement of hospital and medical insurance plan premiums.

Section 8. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6000, "Notification of Retirement", June 2023;

(b) Form 6751, "Employer Certification Regarding Reemployment", December 2023;

(c) Form 6752, "Employer Certification of Independent Contractor/Leased Employee", December 2023;

(d) Form 6753, "Employer Certification of Volunteer", December 2023;

(e) Form 6754, "Member Reemployment Certification", December 2023;

(f) Form 6760, "County Police or Sheriff Appointment of Retired Police Officer", December 2023;

(g) Form 6764, "Recertification of Retired Police Officer", December 2023;

(h) Form 6766, "Appointment of Retired School Resource Officer", December 2023;

(i) Form 6767, "Appointment of Kentucky State Police School Resource Officer", December 2023;

(j) Form 6768, "Postsecondary Institution Appointment of Retired Police Officer", December 2023;

(k) Form 6769, "Certification of Employed Police Officers Calendar Year 2015", December 2023;

(l) Form 6770, "City Appointment of Retired Police Officer", December 2023;

(m) Form 6774, "City Recertification of Retired Police Officer", December 2023; and

(n) Internal Revenue Service Publication 1779, "Independent Contractor or Employee", March 2023.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8:00 a.m. to 4:30 p.m. This material is also available on the Authority's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 15.420(2)(a), 16.010, 16.505, 61.505, 61.510, 61.565, 61.590, 61.637, 61.675, 61.702, 70.291 - 70.293, 78.510, 78.545, 78.5540, 78.625, 78.635, 95.022, 158.441, 164.952, 26 U.S.C. 401(a), 26 C.F.R. 1.401-1, 1.401(a)-1
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.590, 61.637(18), 78.5540(5)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.505, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.637(18) and 78.5540(5) requires the Kentucky Public Pensions Authority to promulgate administrative regulations to implement the requirements of KRS 61.637 and 78.5540. This administrative regulation concerns the administration of KRS 61.637 and 78.5540 in conjunction with federal law regarding bona fide separation from service and changes in employment relationship if a retired member returns to employment with a participating employer in a retirement system operated by the Kentucky Public Pensions Authority. 26 C.F.R. 1.401-1(a)(2) requires that a qualified plan expressly provide in its statutes and administrative regulations (plan documents) how it shall administer its plan in accordance with federal law in order to maintain the tax qualified status of the plan. This administrative regulation is necessary to maintain the tax qualified status of the Kentucky Employees Retirement System, the County Employees Retirement System, and the State Police Retirement System under 26 U.S.C. 401(a), and to comply with the provisions established in 26 C.F.R. 1.401-1(b)(1)(i) and 1.401(a)-1.
• History: 105 KAR 001:390. 34 Ky.R. 826; 1388; eff. 1-4-2008; 35 Ky.R. 975; 1723; eff. 2-6-2009; 36 Ky.R. 141; eff. 10-2-2009; 46 Ky.R. 76, 883, eff. 10-4-2019; 48 Ky.R. 2811; 49 Ky.R 317; eff. 9-27-2022; 50 Ky.R. 15598, 2004; eff. 7-2-2024; Recodified to 105 KAR 005:390; eff. 8-5-2026.

105 KAR 5:411 Hospital and medical insurance for retired members and Kentucky Retirement Systems Insurance Fund Trust {#sec-105-kar-5-411 omnilex-key=us-ky-regs-official--title-105--105 KAR 5:411}

Section 1. Definitions.

(1) "Eligible spouse and dependent children" means spouses and dependent children who are eligible to receive all or a portion of their premiums paid for by the boards in accordance with KRS 61.702 and 78.5536.

(2) "Hospital and medical insurance plan" means:

(a) A basic health benefit plan as defined by KRS 304.17A-005(4);

(b) A provider-sponsored integrated health delivery network as defined by KRS 304.17A-005(39);

(c) A self-insured health plan as defined by KRS 304.17A-005(43);

(d) A health maintenance organization contract that meets the requirements of 42 U.S.C. 300e;

(e) Other health benefit plan as defined by KRS 304.17A-005(22);

(f) A health savings account as permitted by 26 U.S.C. sec. 223;

(g) A health reimbursement arrangement or a similar account as permitted by 26 U.S.C. sec. 105 or 106; or

(h) A hospital and medical insurance premium reimbursement program where members purchase individual health insurance coverage through a health insurance exchange established under 42 U.S.C. sec. 18031 or 18041.

(3) "MEM" means:

(a) A Medicare eligible member who is retired and reemployed:

1. With a participating employer that offers the member a hospital and medical insurance benefit; or

2. By a participating employer that is prevented from offering a hospital and medical benefit to the member as a condition of reemployment under KRS 70.293, 95.022, or 164.952; and

(b) A Medicare eligible member who is retired and whose spouse meets the following criteria:

1. The spouse is also a member;

2. The spouse is reemployed with a participating employer that offers the spouse a hospital and medical insurance benefit, or by a participating employer that is prevented from offering a hospital and medical benefit to the spouse as a condition of reemployment under KRS 70.293, 95.022, or 164.952; and

3. The spouse's hospital and medical insurance plan coverage is provided by the retired member's benefits pursuant to KRS 61.702(2) and 78.5536(2).

(4) "Months of service" is defined by KRS 61.702(1)(c) and 78.5536(1)(c).

(5) "Premium" means the monthly dollar cost required to provide hospital and medical insurance plan coverage for a recipient, a recipient's spouse, or a disabled or dependent child.

(6) "Qualifying event" means a change in life circumstances that:

(a) Meets the agency's requirement for a member to alter an existing hospital and medical insurance plan, or sign up for a new one outside of new or open enrollment if the alteration is consistent with the change; and

(b) Is included on the list of qualifying events provided annually to the members by the agency.

(7) "Wellness" or "wellbeing promise" means an annual health assessment or screening that, if completed by the due date established by the Kentucky Employees' Health Plan, provides a discounted insurance rate for the following fiscal year's health insurance plan premium.

Section 2. Trust Fund.

(1) Pursuant to KRS 61.701, fund assets shall be dedicated for use toward health benefits, as established in KRS 61.702 and 78.5536, and as permitted under 26 U.S.C. 105 and 106 of the United States Internal Revenue Code, to retired recipients and employees of employers participating in the systems. Certain dependents or beneficiaries shall be included, such as qualified beneficiaries as established in 42 U.S.C. 300bb-8(3) of the United States Public Health Service Act.

(2) The boards may adopt a trust agreement and take all action authorized by KRS 61.701(6).

Section 3. Contribution Rates.

(1)

(a) The boards shall adopt monthly contribution rates for:

1. Medicare eligible coverage;

2. Non-Medicare eligible coverage; and

3. MEM coverage.

(b) The boards may choose to adopt a monthly contribution rate for MEM coverage that is separate from the monthly contribution rate the boards adopt for Medicare and non-Medicare eligible coverage, or may choose to adopt a monthly contribution rate that is the same for Non-Medicare eligible coverage and MEM coverage.

(2) The boards shall adopt a contribution plan for each monthly contribution rate in subsection (1) of this section.

Section 4. Payments by the Boards.

(1)

(a) The monthly contribution rate paid by the boards towards premiums for a recipient or eligible spouse or dependent child shall not exceed the monthly contribution rate to which the recipient is entitled under KRS 61.702 and 78.5536.

(b) The actual amount the systems will pay toward a retired member's hospital and medical insurance plan premium, or his or her eligible spouse and dependent children's hospital and medical insurance plan premium, shall be dependent on the membership date of the member.

1. Except as established in subparagraph 3. of this paragraph, if the membership date is prior to July 1, 2003, the systems shall pay a percentage of the contribution rate toward the hospital and medical insurance plan premiums in accordance with KRS 61.702(4)(b) through (d) and 78.5536(b) through (d).

2. Except as established in subparagraph 3. of this paragraph, if the membership date is on or after July 1, 2003, the systems shall pay a dollar amount of the contribution rate toward hospital and medical insurance plan premiums in accordance with KRS 61.702(4)(e) and 78.5536(4)(e).

3. For a member with a membership date that began July 1, 2003 through July 31, 2004, his or her hire date shall be used to determine if the hospital and medical insurance plan premiums are paid as a percentage of the contribution rate as established in subparagraph 1. of this paragraph, or as a dollar amount of the contribution rate as established in subparagraph 2. of this paragraph.

(2) For a retired member who retired based on reciprocity with any other state-administered retirement system, the boards shall not pay more than a portion of the single monthly contribution rate for the hospital and medical insurance plan chosen by the retired member based on the retired member's service credit with the systems.

(3)

(a) A retired member who is not Medicare eligible or is a MEM may cross-reference health insurance coverage with a spouse enrolled in the same hospital and medical insurance plan.

(b) A retired member established in paragraph (a) of this subsection who has hazardous service and a membership date prior to July 1, 2003 may be able to use any unused portion of the monthly contribution rate the retired member is entitled to receive toward the premium cost attributable to the spouse, if the spouse's portion of the premium is not fully paid by the boards pursuant to KRS 61.702 and 78.5536.

(4) Pursuant to KRS 61.702(4)(d), 61.702(4)(e)5., 78.5536(4)(d), and 78.5536(4)(e)5., funds from the insurance trust fund or the 401(h) accounts provided for in KRS 61.702(3)(b) and 78.5536(3)(b) shall be used to pay the determined percentage of the monthly contribution rate for family coverage for eligible spouses and dependent children.

(5)

(a) Members not eligible for Medicare who began participation in the system on or after July 1, 2003 and have accrued an additional full year of service as a participating employee beyond his or her career threshold may receive an additional five (5) dollar contribution toward monthly hospital and medical insurance premiums in accordance with KRS 61.702(4)(e)6.b. and 78.5536(4)(e)6.b.

(b)

1. If a member who is eligible for an additional five (5) dollar contribution pursuant to paragraph (a) of this subsection has service in multiple systems operated by the agency, each system in which the member participates that meets the requirements of KRS 61.702(4)(e)6.b.iii. and 78.5536(4)(e)6.b.iii shall pay a portion of the additional five (5) dollar contribution based on the percentage of the member's service in each system.

2. If a member who is eligible for an additional five (5) dollar contribution pursuant to paragraph (a) of this subsection has service in multiple systems operated by the agency, and not all of the systems in which the member participates meet the requirements of KRS 61.702(4)(e)6.b.iii. and 78.5536(4)(e)6.b.iii, only those systems that meet the requirements of KRS 61.702(4)(e)6.b.iii. and 78.5536(4)(e)6.b.iii shall pay a portion of the additional five (5) dollar contribution based on the percentage of the member's service in each system.

Section 5. Premiums Paid by Recipient.

(1) A recipient may be charged one (1) or more of the following monthly fees related to his or her hospital and medical insurance coverage:

(a) Tobacco user fee; and

(b) Wellness or wellbeing promise incompletion fee.

(2) Any premium amount or fee that is not paid or payable by the insurance trust fund established under KRS 61.701 or a 401(h) account in accordance KRS 61.702 and 78.5536 shall be deducted from the monthly retirement allowance of the recipient.

(3)

(a) If the amount of a premium or fee is not fully paid by the insurance trust fund established under KRS 61.701, a 401(h) account, and the recipient's monthly retirement allowance, then the recipient shall pay the balance of the premium monthly by electronic transfer of funds by completing and filing a valid Form 6131, Bank Draft Authorization for Direct Pay Accounts.

(b) If a valid Form 6131, Bank Draft Authorization for Direct Pay Accounts, is required and is not filed, then the recipient, the recipient's spouse, and any disabled or dependent children shall not be enrolled in a hospital and medical insurance plan established pursuant to KRS 61.702 and 78.5536.

(c)

1. If the electronic transfer of funds based on a valid Form 6131, Bank Draft Authorization for Direct Pay Accounts, fails, then the agency shall provide an invoice to the recipient.

2. If a recipient fails to remit the balance of the premium or fee by the date provided on the invoice, then the enrollment of the recipient, the recipient's spouse, and any disabled or dependent children in the hospital and medical insurance plan shall be cancelled the month after the last month the recipient paid the premium.

(d) If the hospital and medical insurance plan coverage of a recipient, the recipient's spouse, or any disabled or dependent children is cancelled pursuant to this subsection, the recipient shall not be eligible to enroll in a hospital and medical insurance plan established pursuant to KRS 61.702 and 78.5536 until the next open enrollment period for hospital and medical insurance plan coverage.

Section 6. Eligibility to Participate in Hospital and Medical Insurance Plans.

(1) A person shall not be eligible to participate in the hospital and medical insurance plans established pursuant to KRS 61.702 and 78.5536 until the person is a recipient of a monthly retirement allowance, except as established in KRS 16.576(4).

(2) A person who retires under disability retirement shall not be eligible to participate in the hospital and medical insurance plans established pursuant to KRS 61.702 and 78.5536 until the month the person receives his or her first monthly retirement allowance payment.

(3) A recipient's spouse, disabled child, or dependent child shall not be eligible to participate in the hospital and medical insurance plans established pursuant to KRS 61.702 and 78.5536 unless the recipient is participating in the hospital and medical insurance plans established pursuant to KRS 61.702 and 78.5536.

(4) An alternate payee shall not be eligible for participation in the hospital and medical insurance plans established pursuant to KRS 61.702 and 78.5536.

Section 7. Participation in a Hospital and Medical Insurance Plan.

(1) A recipient, spouse, or disabled or dependent child who is Medicare eligible, except individuals established in subsection (2) of this section, shall participate in the hospital and medical insurance plan established for Medicare eligible recipients pursuant to KRS 61.702 and 78.5536.

(2) MEMs, and spouses of MEMs and disabled or dependent children of MEMs who are Medicare eligible, shall participate in the group hospital and medical insurance plan established for MEMs pursuant to KRS 61.702(2)(b)3.b. and 78.5536(2)(b)3.b.

(3) A recipient, spouse, or disabled or dependent child who is not Medicare eligible shall participate in a non-Medicare eligible group hospital and medical insurance plan established pursuant to KRS 61.702 and 78.5536.

(4) If a recipient, spouse, or disabled or dependent child is eligible for Medicare but the other persons enrolled in a group hospital and medical insurance plan are not, then the recipient, spouse, or disabled or dependent child who is not eligible for Medicare may continue to participate in the non-Medicare eligible group hospital and medical insurance plan established pursuant to KRS 61.702 and 78.5536.

(5) Members established in subsections (1) through (4) of this section may waive enrollment in the hospital and medical insurance plan by filing:

(a) A completed KPPA Health Plans for Medicare Eligible Persons form, for Medicare eligible recipients; or

(b) A completed Retiree Health Insurance Enrollment/Change Form, for MEMs and non-Medicare eligible recipients.

(6) Members established in subsections (1) through (4) of this section who do not enroll in or waive the hospital and medical insurance plan shall be automatically enrolled in an appropriate default plan in accordance with Section 9 of this administrative regulation.

Section 8. Required Forms.

(1) If the boards use the group hospital and medical insurance provided by the Kentucky Department of Employee Insurance to provide health insurance coverage for its non-Medicare eligible recipients, spouses, disabled or dependent children, and MEMs, then the agency shall provide these recipients and MEMs with the Retiree Health Insurance Enrollment/Change Form, required for enrollment, waiver, or changes to the group hospital and medical insurance plan.

(2) On behalf of the boards, the agency shall arrange hospital and medical insurance coverage for Medicare eligible recipients, spouses, and disabled or dependent children, except MEMs. The agency shall provide these recipients with the KPPA Health Plans for Medicare Eligible Persons form, required for enrollment, waiver, or changes to the hospital and medical insurance plans.

(3) The agency shall provide the Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, for recipients to complete to receive health insurance contributions toward an eligible spouse and dependent children who are between the ages of eighteen (18) and twenty-two (22).

Section 9. Default Plans.

(1) The boards shall adopt a default plan for new retired members upon initial enrollment, and for recipients who do not file a complete insurance enrollment form during annual open enrollment, if required.

(2) The boards shall adopt a default plan for retired members and recipients who are Medicare eligible, and a default plan for retired members and recipients who are non-Medicare eligible and recipients who are subject to 42 U.S.C. 1395y.

Section 10. Initial and Annual Enrollment and Qualifying Events.

(1)

(a) The recipient shall complete and file valid insurance enrollment forms as established in Section 8 of this administrative regulation by the last day of the month the initial retirement allowance is paid.

(b) If the recipient fails to file the valid insurance enrollment forms as required by paragraph (a) of this subsection, the retired member shall be automatically enrolled in the appropriate default plan adopted by the boards as established in Section 9 of this administrative regulation.

(c) If the recipient established in paragraph (a) of this subsection files the valid insurance enrollment forms as established in Section 8 of this administrative regulation by the last day of the month in which he or she receives his or her initial retirement allowance payment, the retired member shall be enrolled in the selection indicated on the form effective the first day of the following month.

(2) If a recipient has a qualifying event, the recipient shall complete and file the valid insurance enrollment forms as established in Section 8(1) or (2) of this administrative regulation within the time period established by state and federal law and the health insurance plan documents.

(3)

(a) If enrollment is mandatory:

1. The recipient shall complete and file the valid insurance enrollment forms as established in Section 8 of this administrative regulation by the last day of the month of the annual open enrollment period; or

2. If the recipient fails to file the complete insurance enrollment forms as required by subparagraph 1. of this paragraph, the recipient shall be automatically enrolled in the default plan adopted by the boards as established in Section 9 of this administrative regulation.

(b) If enrollment is not mandatory:

1. The recipient may complete and file the valid insurance enrollment forms as established in Section 8 of this administrative regulation by the last day of the month of the annual open enrollment period; or

2. If the recipient does not file the valid insurance enrollment forms as required by subparagraph 1. of this paragraph, the recipient, and the recipient's spouse and disabled or dependent children as applicable, shall remain on the same plan with the same level of coverage as the previous plan year.

(4)

(a)

1. In order to receive health insurance contributions toward an eligible spouse or a dependent child who is between the ages of eighteen (18) and twenty-two (22), the recipient shall complete and file a valid Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, by the end-of-day on November 30th of the calendar year prior to the calendar year in which coverage is effective, regardless of whether enrollment is mandatory or not mandatory.

2. If a qualifying event results in a new eligible spouse or dependent child, in order to receive health insurance contributions toward the eligible spouse or a dependent child who is between the ages of eighteen (18) and twenty-two (22), the recipient shall complete and file a valid Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, and:

a. To add a spouse, the recipient shall file a copy of the marriage certificate; and

b. To add a dependent child, the recipient shall file a copy of the child's birth certificate or a court order establishing legal or natural parenthood.

(b)

1. If the recipient does not file a valid Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, in accordance with paragraph (a) of this subsection, health insurance contributions shall not be paid toward the premiums for an eligible spouse or dependent children unless a complete Form 6256 is filed in the calendar year in which coverage is in effect.

2. If the recipient files a valid Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, between December 1 and December 31 of the calendar year prior to the calendar year in which coverage is effective, then health insurance contributions may be paid for an eligible spouse or a dependent child who is between the ages of eighteen (18) and twenty-two (22) as of January of the calendar year in which coverage is effective. If the health insurance contributions are not paid for an eligible spouse or a dependent child as of January of the calendar year in which coverage is effective, then health insurance contributions shall be paid starting in February of the calendar year in which coverage is effective and the recipient shall also be reimbursed for the January health insurance contributions for the eligible spouse or dependent child.

3. If the recipient files a valid Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, prior to December 31 of the calendar year in which coverage is in effect, health insurance contributions shall be paid toward premiums for an eligible spouse or a dependent child who is between the ages of eighteen (18) and twenty-two (22) in any month in the calendar year in which coverage is effective after the valid Form 6256 is filed. If a valid Form 6256 is filed prior to December 31 of the calendar year in which coverage is in effect, the recipient shall also be reimbursed for up to three (3) months of health insurance contributions for the eligible spouse and dependent children.

Section 11. Changes in Spouse and Disabled or Dependent Child Eligibility.

(1) Recipients, spouses, and disabled or dependent children shall notify the agency of any change that may affect the eligibility of the spouse, disabled child, or dependent child to enroll in a hospital and medical insurance plan offered by the agency or the eligibility of the spouse or dependent child to have all or a portion of their premiums paid for by the boards in accordance with KRS 61.702 and 78.5536.

(2)

(a) The recipient shall repay any premiums that were paid by the boards after the spouse or dependent child ceased to be eligible to have all or portion of their premiums paid in accordance with KRS 61.702 and 78.5536.

(b) If the agency is unable to recover from the recipient the full amount of premiums paid in accordance with paragraph (a) of this subsection, the agency may withhold any remaining amount from the recipient's monthly retirement allowance payment.

(c) If the agency is not able to recover the full amount of the premiums paid in accordance with paragraphs (a) and (b) of this subsection, the agency may recover any remaining amount from the spouse or dependent child.

Section 12. Medical Insurance Reimbursement Plan for Recipients Living Outside of Kentucky.

(1) A recipient may participate in the medical insurance reimbursement plan pursuant to KRS 61.702(6) and 78.5536(6) if the recipient lives in an area outside of the coverage of the group hospital and medical insurance plans offered by the agency.

(2) The medical insurance reimbursement plan shall be available in any month the recipient:

(a) Resides outside of Kentucky;

(b) Is not eligible for the same level of hospital and medical benefits as recipients who resided inside of Kentucky with the same Medicare status; and

(c) Has paid hospital and medical insurance plan premiums capable of being reimbursed.

(3) Recipients eligible to participate in the medical insurance reimbursement plan shall be reimbursed up to the applicable monthly contribution rate for premiums paid for hospital and medical coverage less any premiums paid by the recipient's employer.

(4)

(a) In order to receive the applicable reimbursement, an eligible recipient shall complete and file a valid Form 6240, Application for Out of State Reimbursement for Medical Insurance, and as applicable a valid Form 6256, Designation of Spouse and/or Dependent Child for Health Insurance Contributions, with one (1) or more of the following as proof of coverage and payment of premiums for hospital and medical insurance that covers the entire time period for the requested reimbursement:

1. A valid Form 6241, Employer Certification of Health Insurance for Health Insurance Reimbursement Plan, completed by the employer;

2. A valid Form 6242, Insurance Agency/Company Certification of Health Insurance for Health Insurance Reimbursement Plan, completed by the insurance agency or company;

3. A signed statement from the employer listing individuals covered, dates of hospital and medical insurance coverage, amount of premiums deducted from wages, and the cost of the single coverage; or

4. A signed statement or invoice from the insurance company listing individuals covered, the dates and cost of single hospital and medical insurance coverage, along with proof of payment such as a receipt or bank statement clearly indicating payment for the statement or invoice provided.

(b)

1. If any provided documentation is deemed insufficient by the agency, the agency may request additional proof of medical and hospital insurance coverage or payment.

2. The agency may verify the recipient's eligibility for reimbursement for hospital and medical insurance by requesting verification of coverage and payments directly from the insurance company indicated on the Form 6240, Application for Out of State Reimbursement for Medical Insurance.

(5) An eligible recipient may file for reimbursement quarterly each calendar year in accordance with subsection (4) of this section.

(6) If the eligible recipient files for reimbursement in accordance with subsection (4) of this section, the eligible recipient shall be reimbursed on the following schedule:

(a) In February, if all documentation is filed by January 20;

(b) In May, if all documentation is filed by April 20;

(c) In August, if all documentation is filed by July 20; or

(d) In November, if all documentation is filed by October 20.

(7) The agency shall not reimburse an eligible recipient for premiums for a calendar year in which the eligible recipient failed to file a request for reimbursement in accordance with subsection (4) of this section by March 20 of the following calendar year.

(8)

(a) If a recipient receives a payment from the agency that does not qualify as a premium reimbursement, the recipient shall return the payment to the agency at the retirement office.

(b) If the recipient fails to return the payment, the agency may withhold the payment from the recipient's monthly retirement allowance payment.

Section 13. Dollar Contribution Medical Insurance Reimbursement Plan for Recipients Hired on or after July 1, 2003.

(1)

(a) Except as established in paragraph (b) of this subsection, beginning January 1, 2003, a recipient with a hire date on or after July 1, 2003 may participate in the hospital and medical insurance dollar contribution reimbursement plan pursuant to KRS 61.702(6) and 78.5536(6), if the recipient chooses to purchase a hospital and medical insurance plan not provided by the systems.

(b) A recipient who retired with reciprocity with another state-administered retirement system in accordance with KRS 61.680 and 78.545 shall not be eligible for the hospital and medical insurance dollar contribution reimbursement plan established by KRS 61.702(6) and 78.6636(6) if the recipient elects to receive hospital and medical insurance coverage through another state-administered retirement system. The systems shall pay a pro rata share of the recipient's premium for hospital and medical insurance coverage in accordance with KRS 6.577, 21.427, and 105 KAR 1:020.

(2)

(a) Recipients eligible to participate in the dollar contribution medical insurance reimbursement plan shall be reimbursed up to the applicable monthly contribution rate for premiums paid for the cost of single hospital and medical insurance coverage.

(b)

1. The reimbursement established in this subsection shall be retroactive to January 1, 2023.

2. A recipient who previously received reimbursement that was reduced based on premiums paid by the recipient's employer or who was denied reimbursement solely based on premiums paid by the recipient's employer shall be reimbursed for an amount equal to the difference between what is owed to the recipient under this subsection and what was previously paid to the recipient.

(3)

(a) In order to receive the applicable reimbursement, an eligible recipient shall complete and file a valid Form 6280, Application for Dollar Contribution Reimbursement for Medical Insurance, with one (1) or more of the following as proof of payment of premiums for hospital and medical insurance coverage that covers the entire time period for the requested reimbursement:

1. A valid Form 6281, Employer Certification of Health Insurance for Dollar Contribution Reimbursement Plan, completed by the employer;

2. A valid Form 6282, Insurance Agency/Company Certification of Health Insurance for Dollar Contribution Reimbursement Plan, completed by the insurance agency or company;

3. A signed statement from the employer or state-administered retirement system listing individuals covered, dates of hospital and medical insurance coverage, amount of premiums deducted from wages, and the cost of the single coverage; or

4. A signed statement or invoice from the insurance company listing the individuals covered, dates, and cost of single hospital and medical insurance coverage, along with proof of payment such as a receipt or bank statement clearly indicating payment for the statement or invoice provided.

(b)

1. If any provided documentation is deemed insufficient by the agency, the agency may request additional proof of medical and hospital insurance coverage or payment.

2. The agency may verify the recipient's eligibility for reimbursement for hospital and medical insurance by requesting verification of coverage and payments directly from the insurance company indicated on the Form 6280, Application for Dollar Contribution Reimbursement for Medical Insurance.

(4) An eligible recipient may file for reimbursement in accordance with subsection (3) of this section, quarterly each calendar year.

(5) If the eligible recipient files a request for reimbursement in accordance with subsection (3) of this section, the eligible recipient shall be reimbursed:

(a) In February, if all documentation is filed by January 20;

(b) In May, if all documentation is filed by April 20;

(c) In August, if all documentation is filed by July 20; or

(d) In November, if all documentation is filed by October 20.

(6) The agency shall not reimburse an eligible recipient for premiums for a calendar year in which the eligible recipient failed to file a request for reimbursement in accordance with subsection (3) of this section by March 20 of the following calendar year.

(7)

(a) If a recipient receives a payment from the agency that does not qualify as a premium reimbursement, the recipient shall return the payment to the agency at the retirement office.

(b) If the recipient fails to return the payment, the agency may withhold the payment from the recipient's monthly retirement allowance payment.

Section 14. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form 6131, "Bank Draft Authorization for Direct Pay Accounts", April 2021;

(b) "KPPA Health Plans for Medicare Eligible Persons", September 2022;

(c) "Retiree Health Insurance Enrollment/Change Form", September 2022;

(d) Form 6240, "Application for Out of State Reimbursement for Medical Insurance," September 2022;

(e) Form 6241, "Employer Certification of Health Insurance for Health Insurance Reimbursement Plan", September 2022;

(f) Form 6242, "Insurance Agency/Company Certification of Health Insurance for Health Insurance Reimbursement Plan", September 2022;

(g) Form 6256, "Designation of Spouse and/or Dependent Child for Health Insurance Contributions", September 2022;

(h) Form 6280, "Application for Dollar Contribution Reimbursement for Medical Insurance", September 2023;

(i) Form 6281, "Employer Certification of Health Insurance for Dollar Contribution Reimbursement Plan", June 2024; and

(j) Form 6282, "Insurance Agency/Company Certification of Health Insurance for Dollar Contribution Reimbursement Plan", September 2022.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m., or on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 16.576(4), 61.505(1)(g), 61.510, 61.701, 61.702, 78.510, 78.5536, 304.17A-005, 26 U.S.C. 105-106, 115, 213(d), 223, 18031, 18041, 42 U.S.C. 300bb-8(3), 300e, 1395y(b), Pub.L. 111-148
• STATUTORY AUTHORITY: KRS 61.505(1)(g), 61.702, 78.5536
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 through 16.652, 61.505, 61.510 through 61.705, and 78.510 through 78.852. KRS 61.702 and 78.5536 provide for the systems operated by the Kentucky Public Pensions Authority to offer hospital and medical insurance coverage to recipients (including retired members and some beneficiaries of deceased members), their spouses, and their disabled or dependent children, and require the promulgation of administrative regulations concerning requirements for medical insurance reimbursement programs. This administrative regulation establishes procedures for the administration of the hospital and medical insurance benefits provided by the Kentucky Retirement Systems and the County Employees Retirement System, as well as establishes eligibility requirements, necessary documentation for proof of insurance, deadlines for filing for reimbursement, and forms.
• History: 105 KAR 001:411. 49 Ky.R. 1203, 1633, 1750; eff. 5-30-2023; 50 Ky.R. 2276; 51 Ky.R. 261; eff. 10-22-2024; Recodified to 105 KAR 005:411; eff. 8-5-2026.

105 KAR 5:415 Reimbursement of hospital and medical insurance premiums for Medicare eligible retired members reemployed with a participating employer {#sec-105-kar-5-415 omnilex-key=us-ky-regs-official--title-105--105 KAR 5:415}

Section 1. Definitions.

(1) "Agency" means:

(a) Prior to April 1, 2021, the Kentucky Retirement Systems, which administered the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System; and

(b) Beginning April 1, 2021, the Kentucky Public Pensions Authority, which is authorized to carry out the day-to-day administrative needs of the Kentucky Retirement Systems (comprised of the State Police Retirement System and the Kentucky Employees Retirement System) and the County Employees Retirement System.

(2) "Boards" means the Board of Trustees of the Kentucky Retirement Systems and the Board of Trustees of the County Employees Retirement System.

(3) "Complete" means all required sections of a form are filled out, the form has been fully executed by the recipient or the recipient's legal representative, and all supporting documentation required by the form is included with the form.

(4) "Eligible spouse and dependents" means spouses and dependent children of MEMs who are eligible to receive all or a portion of their premiums paid for by the Boards in accordance with KRS 61.702 and 78.5536.

(5) "Employee" is defined by KRS 61.510(5) and 78.510(6).

(6) "Employer" is defined by KRS 16.505(3), 61.510(6), and 78.510(7).

(7) "File" means a form or document has been received at the retirement office by mail, fax, secure email, in-person delivery, or via Self Service on the Web site maintained by the agency (if available).

(8) "KEHP" means the Kentucky Employees' Health Plan as established in 101 KAR 2:210.

(9) "MEM" means:

(a) A Medicare eligible member who is retired and reemployed in a position:

1. With a participating employer that offers or offered the member a hospital and medical insurance benefit; or

2. By a participating employer which is or was prevented from offering a hospital and medical benefit to the member as a condition of reemployment under KRS 70.293, 95.022, or 164.952; and

(b) A Medicare eligible member who is retired and whose spouse meets the following criteria:

1. The spouse is also a member.

2. The spouse is reemployed with a participating employer that offers the spouse a hospital and medical insurance benefit, or by a participating employer that is prevented from offering a hospital and medical benefit to the spouse as a condition of reemployment under KRS 70.293, 95.022, or 164.952.

3. The spouse's hospital and medical insurance plan coverage is provided by the retired member's benefits pursuant to KRS 61.702(2) and 78.5536(2).

(10) "Member" is defined by KRS 16.505(21), 61.510(8), and 78.510(8).

(11) "Month" is defined by KRS 16.505(34), 61.510(35), and 78.510(32).

(12) "Monthly contribution rate" means:

(a) The amount determined by the boards as the maximum contribution the systems will pay toward the premium of a retired member who began participating in the systems on or before June 30, 2003; or

(b) For a retired member who began participating in the system on or after July 1, 2003, the amount per month earned by the retired member based on years of service as provided in KRS 61.702(4)(e) and 78.5536(4)(e).

(13) "Premium" means the monthly dollar amount required to provide hospital and medical insurance plan coverage for a recipient, spouse of a retired member, or dependent child.

(14) "Provide", when used in reference to a form or other document, means the agency makes a form or document available on its Web site (if appropriate) or makes a form or document available to a person by mail, fax, secure email, or via Self Service on the Web site maintained by the agency (if available).

(15) "Recipient" is defined by KRS 16.505(26), 61.510(27), and 78.510(26).

(16) "Retired member" is defined by KRS 16.505(11), 61.510(24), and 78.510(23).

(17) "Retirement allowance" is defined by KRS 16.505(12), 61.510(16), and 78.510(16).

(18) "Retirement office" is defined by KRS 16.505(28), 61.510(31), and 78.510(29).

(19) "Participating" is defined by KRS 16.505(33), 61.510(34), and 78.510(31).

(20) "Service" is defined by KRS 16.505(6), 61.510(9), and 78.510(9).

(21) "Systems" means the State Police Retirement System, the Kentucky Employees Retirement System, and the County Employees Retirement System.

Section 2. Group Hospital and Medical Insurance Plans Established for MEMs. Beginning October 1, 2022, a KEHP group hospital and medical insurance plan shall be available for MEMs and the eligible spouses and dependents of MEMs in accordance with KRS 61.702, 78.5536 and 42 U.S.C. 1395y(b).

Section 3. Eligibility for Reimbursement.

(1) A MEM who was informed by the agency that he or she was not eligible for group hospital and medical insurance plan coverage through the systems, and who paid premiums for a group hospital and medical insurance plan for himself or herself as well as his or her eligible spouse and dependents may request reimbursement for those premiums paid during the time period from January 1, 2009 to September 30, 2022 as described in Section 4 of this administrative regulation.

(a) MEMs shall not be eligible for reimbursement for any portion of premiums paid for themselves, spouses, and dependents on or after October 1, 2022, except as indicated in paragraph (b) of this subsection.

(b) For calendar year 2022 only, MEMs and eligible spouses and dependents of MEMs already enrolled in a hospital and medical insurance plan other than a KEHP group hospital and medical insurance plan may choose to remain on that plan through December 31, 2022 and have his or her reimbursement eligibility period extended to December 31, 2022.

(2) Payment of premiums for a group hospital and medical insurance plan for MEMs and eligible spouses and dependents of MEMs identified in subsection (1) of this section shall be reimbursed upon submission of documentation as described in Section 4 of this administrative regulation if all or a portion of the MEM, MEM's eligible spouse's or dependent's group hospital and medical insurance coverage would have been paid for by the Boards pursuant to KRS 61.702 and 78.5536.

(3) A MEM shall not be eligible for reimbursement of premiums paid by or on behalf of the MEM or his or her eligible spouse or dependent if:

(a) The MEM was not notified by the agency that he or she was ineligible for group hospital and medical insurance plan coverage through the agency; and

(b) The MEM voluntarily chose to purchase or enroll in a hospital and medical insurance plan not offered by the agency.

Section 4. Request for Reimbursement.

(1) The agency shall provide the Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, to eligible MEMs.

(2) A MEM may request reimbursement for himself or herself, and any eligible spouse and dependents by filing Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, which shall include all premiums for the entire time period for which the MEM is requesting reimbursement.

(a) MEMs may begin filing Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, on August 1, 2022.

(b) MEMs shall only file one (1) Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, for each entity that provided hospital and medical insurance coverage for the MEM and his or her eligible spouses and dependents.

(c) Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement shall only be filed once MEMs and MEM's eligible spouse or dependents are no longer paying premiums eligible for reimbursement.

(3)

(a) In order to receive the applicable reimbursement, MEMs shall file the completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, with one (1) or more of the following proof of payment of premiums for hospital and medical insurance coverage that covers the entire time period for the requested reimbursement:

1. The employer certification of health insurance for medical reimbursement section of Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, completed by an employer to certify premiums paid by the MEM;

2. The insurance agent certification of health insurance for medical reimbursement section of Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, completed by an insurance agency or company to certify the premiums paid by or on behalf of the MEM;

3. A signed statement from the MEM's employer listing dates of hospital and medical insurance coverage amount of premiums deducted from wages and the cost of the single coverage; or

4. A signed statement or invoice from the MEM's insurance company listing the dates and cost of single hospital and medical insurance coverage, along with proof of payment such as a receipt or bank statement clearly indicating payment for the statement or invoice provided.

(b) If any provided documentation is deemed insufficient by the agency, the agency may request additional proof of medical and hospital insurance coverage or payment.

(4)

(a) A completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, shall be filed no later than June 30, 2023.

(b) MEMs and eligible spouses or dependents of MEMs for whom a completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, is not on file on or before June 30, 2023 shall not be eligible for reimbursement, except as provided by subsection (5) of this section.

(5)

(a) If a MEM submits a Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, by the deadline indicated in subsection (4) of this section that is not complete, then the MEM shall have until December 31, 2023 to file a completed Form 6260, including any documentation or proof of payments for the time period the MEM is requesting reimbursement that were missing from the initial incomplete Form 6260.

(b) MEMs and eligible spouses or dependents of MEMs for whom a completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, is not on file on or before December 31, 2023 shall not be eligible for reimbursement.

(6)

(a) If a MEM is deceased, the executor, administrator, or other representative of the MEM's estate may request reimbursement for the MEM, and any eligible spouse or dependents, by filing a Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, and all other required documentation at the retirement office in compliance with this section.

(b) The executor, administrator, or other representative of the MEM's estate shall also file an order appointing the executor, administrator, or other representative of the MEM's estate from a court with jurisdiction that has been entered by the Clerk of the Court or certified by the Clerk of the Court.

(7) If the last day to file a completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, under this section is a Saturday, Sunday, a public holiday listed in KRS 2.110, a day on which the retirement office is actually and legally closed, or any other state or federal holiday that disrupts mail service, then the deadline shall be satisfied if the completed Form 6260 is on file by the end of the next business day.

Section 5. Funding. Pursuant to KRS 61.701, fund assets shall be dedicated for use toward health benefits, as provided in KRS 61.702 and 78.5536, and as permitted under 26 U.S.C. 105 and 106 of the United States Internal Revenue Code, to retired recipients and employees of employers participating in the systems, including MEMs. Fund assets shall also be dedicated for use toward eligible spouses and dependents of MEMs health benefits as provided in KRS 61.702 and 78.5536. Fund assets shall be used to reimburse eligible MEMs and eligible spouses and dependents of the MEM.

Section 6. Authorized Payments.

(1) The agency shall reimburse premiums paid by a MEM or the spouse of a MEM for a MEM who meets the eligibility requirements of Section 3 of this administrative regulation and the MEM's eligible spouse and dependents for each month between January 1, 2009 and September 30, 2022, except as provided in subsection (2) of this section:

(a) That are included on a timely-submitted, completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, in compliance with Section 4 of this administrative regulation; and

(b) Where documented proof of payment of premiums was filed in compliance with Section 4 of this administrative regulation.

(2) In the case of MEMs who choose to remain on their current hospital and medical insurance plan through December 31, 2022 in accordance with paragraph (1)(b) of Section 3 of this administrative regulation, the agency shall reimburse premiums paid by a MEM or the spouse of a MEM for a MEM who meets the eligibility requirements of Section 3 of this administrative regulation and the MEM's eligible spouse and dependents for each month between January 1, 2009 and December 31, 2022:

(a) That are included on a timely-submitted, completed Form 6260, Medicare Secondary Payer Application for Medical Insurance Reimbursement, in compliance with Section 4 of this administrative regulation; and

(b) Where documented proof of payment of premiums was filed in compliance with Section 4 of this administrative regulation.

(3) The amount the MEM or the estate of the MEM shall receive for each month of premium reimbursements authorized by subsection (1) or (2) of this section shall be the lesser of:

(a) The monthly contribution rate in effect during the calendar year in which the premiums authorized for reimbursement were paid by the MEM or the spouse of the MEM had the MEM been eligible to enroll in the non-Medicare eligible group hospital and medical insurance plan established in accordance with KRS 61.702 and 78.5536; or

(b) The premiums paid by the MEM or the spouse of the MEM for hospital and medical insurance coverage for the MEM and his or her eligible spouse and dependents.

(4)

(a) The applicable monthly contribution rate referenced in paragraph (3)(a) of this section shall be based on the MEM's hazardous and nonhazardous service.

(b) The applicable monthly contribution rate referenced in paragraph (3)(a) of this section shall not include the tobacco usage fee for the non-Medicare eligible group hospital and medical insurance plan.

(5)

(a) If a MEM or an estate of a MEM receives a payment from the agency that does not qualify for reimbursement in accordance with this administrative regulation, the MEM shall return the payment to the agency at the retirement office.

(b) If the MEM or an estate of a MEM fails to return the payment, the agency may withhold payment from the MEM's monthly retirement allowance payment or take other action to collect on the payment received in error.

Section 7. Incorporation by Reference.

(1) Form 6260, "Medicare Secondary Payer Application for Medical Insurance Reimbursement", November 2022, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Public Pensions Authority, 1260 Louisville Road, Frankfort, Kentucky 40601, Monday through Friday, from 8:00 a.m. to 4:30 p.m. This material is also available on the agency's Web site at kyret.ky.gov.

History

• RELATES TO: KRS 16.505, 61.505, 61.510, 61.701, 61.702, 78.510, 78.5536, 26 U.S.C. 105, 106, 42 U.S.C. 1395y(b)
• STATUTORY AUTHORITY: KRS 61.505(1)(g)
• NECESSITY, FUNCTION, AND CONFORMITY: KRS 61.505(1)(g) authorizes the Kentucky Public Pensions Authority to promulgate administrative regulations on behalf of the Kentucky Retirement Systems and the County Employees Retirement System that are consistent with KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to 78.852. KRS 61.702 and 78.5536 provide for the systems operated by the Kentucky Public Pensions Authority to offer group hospital and medical insurance coverage to retired members and some spouses and dependents. This administrative regulation establishes eligibility requirements, procedures, and necessary documentation and forms for the reimbursement of hospital and medical insurance benefit premiums paid by Medicare eligible retired members who were reemployed in a position with a participating employer and were informed by the Kentucky Retirement Systems or the Kentucky Public Pensions Authority that they were not eligible for enrollment in an existing group hospital and medical insurance plan through the Kentucky Public Pensions Authority from January 1, 2009 through September 30, 2022.
• History: 105 KAR 001:415. 49 Ky.R. 485, 1106, 1250; eff. 3-7-2023; Recodified from 105 KAR 001:415; eff. 8-5-2026.