102 KAR | Title 102 KAR — Teachers' Retirement System

Chapter 1 General Rules

102 KAR 1:010 Rules and administrative regulations {#sec-102-kar-1-010 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:010}

Section 1. All rules and administrative regulations of school districts and institutions of learning relating to retirement shall conform to the Teachers' Retirement Act.

History

RELATES TO: KRS 161.220-161.710
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: Each school district and educational agency which employs members of the Teachers' Retirement System has the right to adopt rules and administrative regulations which affect their employees. This administrative regulation is intended to assure that such rules and administrative regulations which refer to the Teachers' Retirement System are in conformity with the statutes and administrative regulations under which the system operates.
History: 102 KAR 001:010. TRS-1; 1 Ky.R. 460; eff. 3-12-1975; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:030 Substitute teachers and nonuniversity, noncommunity college part-time members {#sec-102-kar-1-030 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:030}

Section 1. A member substituting for at least seven-tenths (7/10) of the legal school year for a local school district or districts may make contributions for a full year and receive a full year of service credit.

Section 2.

(1) A member, not employed by a university, college or community college, who is employed part time and who teaches or is paid on the basis of at least seven-tenths (7/10) of regular full-time service may make contributions for the balance of the contract year.

(2) Members who are employed on a part-time basis after the start of a regular contract year shall not be eligible to obtain service credit for any period of the contract year prior to the date of their employment.

Section 3.

(1) Contributions for substitute and part-time service pursuant to Section 1 or 2 of this administrative regulation shall be based upon the equivalent annual contract salary and shall be made by December 31 immediately following the year in which the service occurred.

(2) Interest charges of eight (8) percent per annum shall be added to payments made after June 30 of the year that the service occurred.

(3) The total amount of service credit that may be purchased pursuant to Sections 1 and 2 of this administrative regulation shall not exceed five (5) years. Service purchased pursuant to Sections 1 and 2 of this administrative regulation shall be included in calculating the maximum of five (5) years of nonqualified service credit that may be purchased in accordance with KRS 161.5465.

Section 4.

(1) Service credit for substitute teaching and part-time employment rendered on or before June 30, 2002 and balance of the year purchases based on substitute teaching and part-time employment provided prior to June 30, 2002, shall have been purchased on or before December 31, 2002.

(2) Service credit for substitute teaching rendered on or before June 30, 2002 shall not be used for compliance with minimum service requirements as set out in KRS 161.600(1)(a) and (b) and 161.661(1).

History

RELATES TO: KRS 161.545, 161.5465, 161.600(1)(a), (b), 161.612, 161.661(1)
STATUTORY AUTHORITY: KRS 161.310(1), 161.545
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.545 authorizes members of the Teachers' Retirement System to receive service credit for substitute and part-time service, towards which contributions were not otherwise made, only in accordance with trustee administrative regulations. KRS 161.310(1) requires the Teachers' Retirement System Board of Trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. This administrative regulation establishes the requirements for evaluating and crediting that service, including balance of the year purchases.
History: 102 KAR 001:030. TRS-3(c); 1 Ky.R. 134; eff. 12-11-1974; 3 Ky.R. 376; eff. 12-1-1976; 29 Ky.R. 2931; 30 Ky.R. 271; eff. 8-13-2003; 33 Ky.R. 3427; 34 Ky.R. 227; eff. 8-31-2007; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:032 Bona fide retirement {#sec-102-kar-1-032 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:032}

Section 1. Definitions.

(1) "Bona fide retirement" means a complete cessation of all employment relationships between the member and any participating employer, regardless of whether the position is one that participates in TRS, and that there shall be no prearranged agreement prior to retirement between the member and any participating employer that the member will be reemployed or otherwise return to work for the employer in any capacity.

(2) "Break in service" means the period of time required under KRS 161.605(7)(a)-(b) during which the member shall have a complete separation from service before becoming reemployed with any participating employer.

(3) "Participating employer" means an employer that participates in TRS pursuant to KRS 161.220(4).

(4) "Reemployed" and "Reemployment," unless indicated otherwise in this administrative regulation, shall mean employment as defined by KRS 161.220(12) following retirement with a participating employer and shall include both paid and unpaid employment and full-time, part-time, temporary, seasonal, voluntary, and hourly employment.

(5) "Reemployment date" means the first date that the member is reemployed after their retirement date.

(6) "Retirement date" means the member's most recent effective retirement date with TRS.

Section 2.

(1) A retired member may not be reemployed unless he or she has first experienced a bona fide retirement with the appropriate break in service, as provided in KRS 161.605(7)(a) or (b), prior to reemployment. Failure to do so shall void the member's retirement and require the return of all benefits with interest as provided under KRS 161.605(7)(c). This requirement applies to all members and participating employers.

(2) The period of time established for the break in service shall be measured from the member's retirement date to the member's reemployment date.

Section 3.

(1) There shall be no prearranged agreement, prior to retirement, between the member and any participating employer that the member shall be reemployed or otherwise return to work in any capacity after retirement.

(2) A retired member shall not be reemployed by a participating employer, unless prior to reemployment both the member and the participating employer have certified that there was no prearranged agreement prior to retirement between the member and the employer that the member would be reemployed. This requirement applies to both reemployment in positions that participate in TRS and those that do not.

Section 4.

(1) The member and participating employer shall complete and file with TRS Form 10-C prior to reemployment of that retired member. If the member has been retired twelve (12) months or longer following his or her retirement date, the member and participating employer shall not be required to file Form 10-C.

(2) A participating employer shall complete and file Form 30-E with TRS prior to reemployment of any retired member who is returning to work in a position that the employer deems to be a position that is not required to contribute to TRS.

Section 5. Incorporation by Reference.

(1) Form 10-C, "Reemployment Certification", 06/17/2019; and

(2) Form 30-E, "Employment Limitations Exemption Request", 06/17/2019.

(3) This material may be inspected, copied, or obtained, subject to applicable copyright law, at Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 5 p.m.

History

RELATES TO: KRS 161.420(5), 161.540(2), 161.605, 161.677, 161.700(4), 26 U.S.C. 401(a), 414(h), 26 C.F.R. 1.401-1, 1.401(a)-1
STATUTORY AUTHORITY: KRS 161.310, 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of Teachers' Retirement System (TRS) to promulgate administrative regulations for the administration of funds of the retirement system. KRS 161.716 requires the board to promulgate administrative regulations as are necessary to remove any conflicts with federal law. TRS is a qualified plan under Section 401(a) et seq. of the Internal Revenue Code. As a qualified plan, member contributions are "picked-up" contributions under IRC Section 414(h) and made to TRS on a tax-deferred basis. This administrative regulation establishes guidelines to help ensure that a bona fide retirement has occurred under federal law before a member returns to employment with a TRS-participating employer. This administrative regulation is necessary to help maintain compliance with federal tax law and the qualified status of TRS under IRC Section 401(a) et seq.
History: 102 KAR 001:032. 46 Ky.R. 778, 1410; eff. 12-6-2019; Crt eff. 12-17-2025.

102 KAR 1:035 Employment by retired members; calculation of the Daily Wage Threshold and Average Daily Rate {#sec-102-kar-1-035 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:035}

Section 1. Definitions.

(1) "Average Daily Rate (ADR)" means the average daily rate of pay a retired member returning to work receives over a fiscal year as calculated under this administrative regulation.

(2) "Daily Wage Threshold (DWT)" means the limitations of seventy-five (75) percent or sixty-five (65) percent of a member's last annual compensation measured on a daily rate as prescribed in KRS 161.605(1) and (2).

(3) "Extra Service" means service that is not part of, and is provided outside of, the service provided for Position Contract Days and does not earn service credit. It includes, service for which compensation is paid from the district's supplemental or extra service salary schedules, coaching, professional development, and summer school.

(4) "Position Contract Days" means days during the regular school or fiscal year that are part of the normal school calendar and are performed during regular school hours that, standing alone without any other worked service, earn service credit in TRS. It includes service performed on these days through full-time employment as defined in KRS 161.220(21), part-time employment, and substitute teaching. It does not include extra service as defined by this section.

Section 2. To determine the DWT of a retiring member, TRS shall first divide the member's last annual compensation, as defined under KRS 161.220(23), by the number of Position Contract Days worked by the member immediately prior to the member's initial retirement that provided the member with one (1) full year of service credit. This number shall then be multiplied by either sixty-five (65) percent or seventy-five (75) percent pursuant to KRS 161.605(1) and (2), the product of which is the DWT.

Section 3.

(1) The ADR shall be measured by adding the total annual compensation for all services performed by the retired member for the fiscal year and dividing that compensation over the number of Position Contract Days worked by the retired member. The total annual compensation for this calculation shall include all forms of remuneration and benefits, except for health insurance coverage generally provided to all eligible employees by the employer, reimbursement for travel expense at the rates approved for state employees, and professional dues. All remuneration of a retiring member returning to work shall be evaluated to determine whether his or her ADR exceeded the DWT for each fiscal year worked. If the ADR exceeds the DWT, the amount of that excess shall be multiplied by the Position Contract Days worked by the retired member for that year to determine the total reduction in the retired member's benefits required under KRS 161.605(6).

(2) Days worked in Position Contract Days shall be calculated on a full-time equivalent basis. Any day in which the retired member works less than a full day as defined by school district or employer policy shall be measured on a pro rata basis so that the retired member is accredited with a partial day based on the ratio of the hours worked during the day divided by the district's or employer's definition of a full day. Full and partial days worked shall be added to calculate the full-time equivalent number of days worked.

(3) Compensation earned in extra services will be included in total annual compensation for ADR calculation purposes if accompanied with any Position Contract Days worked by the retired member. Extra service shall earn only salary credit.

(4) If extra service is not accompanied by Position Contract Days worked by the retired member, no salary or service credit will be awarded. The retirement contributions forwarded to TRS on that service shall be refunded to the member at the completion of the fiscal year, and any salary credit awarded to the member for that service shall be removed.

History

RELATES TO: KRS 161.500, 161.605
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky to promulgate administrative regulations for the administration of retirement system funds and for the transaction of business. This administrative regulation establishes procedures necessary to administer KRS 161.605, concerning income limitations required for employment by retired members.
History: 102 KAR 001:035. TRS-4(a); 1 Ky.R. 135; eff. 12-11-74; Am. 6 Ky.R. 682; eff. 8-6-80; 17 Ky.R. 2471; eff. 4-5-91; 20 Ky.R. 2358; eff. 3-23-94; 30 Ky.R. 1824; 2017; eff. 3-18-2004; Crt eff. 2-27-2020; 46 Ky.R. 1580, 2222; eff. 5-5-2020; Crt eff. 7-9-2026.

102 KAR 1:036 Part-time service for university, college, and community college members {#sec-102-kar-1-036 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:036}

Section 1. Active, contributing members who opt to purchase service credit pursuant to this administrative regulation and who are employed on a part-time basis in a position listed in KRS 161.220(4)(b) and (n) in one (1) of the universities or community colleges shall make retirement contributions and receive service credit in compliance with the following conditions:

(1) An active, contributing member who teaches or is paid the equivalent of at least three-tenths (3/10) of regular full-time service may make contributions on the member's salary and receive a fractional year of service credit.

(2) Contributions shall be based upon the equivalent annual contract salary if a full year of service is to be granted.

(3) Members may make personal contributions for that service in accordance with this administrative regulation upon certification of service and salary by the applicable authority.

(4) The contributions shall be made directly to the retirement office on or before December 31 immediately following the fiscal year in which the part-time service was rendered.

(5) Interest charges of eight (8) percent per annum shall be added to payments made after June 30 of the year that the service occurred.

Section 2. An active, contributing member who is employed and teaches or is paid at least seven-tenths (7/10) of the regular contract year shall have the option of purchasing credit for the balance of the contract year in accordance with the conditions of this section.

(1) The member shall be employed in a regular full-time position pursuant to a contract that requires a full day of service for every workday of a full contract year.

(2) The member would have received one (1) year of service credit for completing the contract had it been completed.

(3) The member provided service for less than a full year as required by the contract.

(4) The member was employed pursuant to the contract at the beginning of the fiscal or school contract year.

(5) A member employed after the beginning of a regular contract year shall not be eligible to obtain service credit for the time prior to the member's employment.

(6) The contributions shall be made directly to the retirement office on or before December 31 immediately following the fiscal year in which the part-time service was rendered.

(7) Interest charges of eight (8) percent per annum shall be added to payments made after June 30 of the year that the service occurred.

(8) The total amount of service credit that may be purchased pursuant to this section shall not exceed five (5) years. Service purchased pursuant to this section shall be included in calculating the maximum of five (5) years of nonqualified service credit that may be purchased in accordance with KRS 161.5465.

Section 3. Active, contributing members who purchase retirement credit for full-time or part-time employment in one (1) of the universities or community colleges during years in which they have full-time employment with another employer participating in Teachers' Retirement System, and for which the purchase would result in more than one (1) year of service credit, shall receive salary credit only. Notwithstanding Section 2(8) of this administrative regulation, members making this salary credit purchase, shall purchase every year of their part-time service with the university or community college.

History

RELATES TO: KRS 161.220(4), 161.545, 161.5465
STATUTORY AUTHORITY: KRS 161.310(1), 161.545
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.545 authorizes members of the Teachers' Retirement System to make contributions based on part-time service in accordance with trustee administrative regulations. KRS 161.310(1) requires the Teachers' Retirement System Board of Trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. This administrative regulation establishes the service towards which contributions may be made and the procedures for crediting those contributions.
History: 102 KAR 001:036. TRS-3(c); 1 Ky.R. 134; eff. 12-11-74; Am. 3 Ky.R. 376; eff. 12-1-76; 29 Ky.R. 2931; 30 Ky.R. 271; eff. 8-13-2003; 33 Ky.R. 3428; 34 Ky.R. 228; eff. 8-31-07; Crt eff. 2-27-2020; 46 Ky.R. 1581; eff. 5-5-2020; Crt eff. 7-9-2026.

102 KAR 1:037 Administrative staff membership {#sec-102-kar-1-037 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:037}

Section 1. Any position requiring graduation from a four (4) year college or university as a condition of employment shall be included in the membership of the Teachers' Retirement System.

History

RELATES TO: KRS 161.220
STATUTORY AUTHORITY: KRS 161.220, 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.220(4)(d) authorizes the Board of Trustees to designate by administrative regulation the members of the staff of the Teachers' Retirement System who shall be members of the system. This administrative regulation sets out the positions which shall be covered by this section.
History: 102 KAR 001:037. TRS-12(a); 1 Ky.R. 460; eff. 3-12-75; Am. 5 Ky.R. 21; eff. 9-6-78; Crt eff. 2-27-2020; 46 Ky.R. 1583, 2222; eff. 5-5-2020; Crt eff. 7-9-2026.

102 KAR 1:038 Fractional service year for members initially employed on a full-time basis {#sec-102-kar-1-038 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:038}

Section 1.

(1) Except as provided in Sections 2, 3, and 4 of this administrative regulation, a member shall receive a proportional fraction of a year of service credit computed to the nearest hundredth if the member provides service for less than the regular contract year.

(2) A member employed in a position listed in KRS 161.220(4)(b) or (n) in one (1) of the universities, colleges, or community colleges shall be employed in a regular full-time position in order to receive a proportional fraction of a year of service credit.

Section 2. A member employed for at least the first one-half (1/2) or more of a regular contract year shall have the option of purchasing credit for the balance of the contract year in accordance with the conditions of this section.

(1) The member shall be employed in a regular full-time position pursuant to a contract that requires a full day of service for every workday of a full contract year.

(2) The member would have received one (1) year of service credit for completing the contract had it been completed.

(3) The member provided service for less than a full year as required by the contract.

(4) The member was employed pursuant to the contract at the beginning of the fiscal or school contract year.

(5) A member employed after the beginning of a regular contract year shall not be eligible to obtain service credit for the time prior to the member's employment.

(6) This option shall not be exercised by a member more than one (1) time in a three (3) year period.

(7) The member shall make contributions based on the equivalent annual contract salary, and interest at the rate of eight (8) percent shall be added to payments made after June 30 of the fractional year.

(8) Payment for contributions shall be made by December 31 immediately following the year in which the fractional year's service occurred.

(9) The total amount of service credit that may be purchased shall not exceed five (5) years, and service purchased in accordance with this section shall be included in calculating the maximum of five (5) years of nonqualified service credit that may be purchased in accordance with KRS 161.5465.

Section 3. A member employed for at least seven-tenths (7/10) of the regular contract year shall have the option of purchasing credit for the balance of the contract year in accordance with the conditions of this section.

(1) The member shall be employed in a regular full-time position pursuant to a contract that requires a full day of service for every workday of a full contract year.

(2) The member would have received one (1) year of service credit for completing the contract had it been completed.

(3) The member provided service for less than a full year as required by the contract.

(4) The member was employed pursuant to the contract at the beginning of the fiscal or school contract year.

(5) A member employed after the beginning of a regular contract year shall not be eligible to obtain service credit for the time prior to the member's employment.

(6) The member shall make contributions based upon the equivalent annual contract salary, and interest at the rate of eight (8) percent shall be added to payments made after June 30 of the fractional year.

(7) Payment for contributions shall be made by December 31 immediately following the year in which the fractional year's service occurred.

(8) The total amount of service credit that may be purchased shall not exceed five (5) years, and service purchased in accordance with this section shall be included in calculating the maximum of five (5) years of nonqualified service credit that may be purchased in accordance with KRS 161.5465.

Section 4. A member employed for at least one (1) complete pay period shall have the option of purchasing credit for the balance of the contract year in accordance with the conditions of this Section.

(1) The member shall be employed in a regular full-time position pursuant to a contract that requires a full day of service for every workday of a full contract year.

(2) The member would have received one (1) year of service credit for completing the contract had it been completed.

(3) The member provided service for less than a full year as required by the contract.

(4) The member was employed pursuant to the contract at the beginning of the fiscal or school contract year.

(5) A member employed after the beginning of a regular contract year shall not be eligible to obtain service credit for the time prior to the member's employment.

(6) This option shall not be exercised by a member more than one (1) time in a ten (10) year period.

(8) Payment for contributions shall be made by the end of the fiscal year next succeeding the year in which the last salary payment was made.

(9) The total amount of service credit that may be purchased shall not exceed five (5) years, and service purchased in accordance with this Section shall be included in calculating the maximum of five (5) years of nonqualified service credit that may be purchased in accordance with KRS 161.5465.

Section 5. A bona fide leave of absence shall be administered in accordance with 102 KAR 1:110.

History

RELATES TO: KRS 161.545, 161.5465
STATUTORY AUTHORITY: KRS 161.310(1), 161.545
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.545 authorizes members of the Teachers' Retirement System to make contributions for service other than regular full-time teaching in accordance with trustee administrative regulations. KRS 161.310(1) requires the Teachers' Retirement System Board of Trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. This administrative regulation establishes guidelines for accepting contributions and granting service credit for members employed for less than a full school year.
History: 102 KAR 001:038. TRS-2(d); 1 Ky.R. 461; eff. 3-12-1975; 9 Ky.R. 241; eff. 9-8-1982; 29 Ky.R. 2934; 30 Ky.R. 272; eff. 8-13-2003; 33 Ky.R. 3430; 34 Ky.R. 228; eff. 8-31-2007; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:039 New entrants {#sec-102-kar-1-039 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:039}

Section 1. Membership application shall be filed by each new teacher at the time of employment in a covered position. However, contributions shall be deducted from the salary as provided by law although the form may not have been filed or processing completed.

History

RELATES TO: KRS 161.220, 161.470, 161.540
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.470(1) provides that all present teachers (KRS 161.220(5)) and all new teachers (KRS 161.220(6)) shall become members of the Teachers' Retirement System. KRS 161.540 provides that all members shall contribute to the system as set out in that section. This administrative regulation is intended to establish a procedure for gathering the information required to set up a retirement record for each member, and to assure that contributions shall be deducted by the employer pending processing of the membership application.
History: 102 KAR 001:039. TRS-5; 1 Ky.R. 461; eff. 3-12-1975; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:045 Transfer to other systems {#sec-102-kar-1-045 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:045}

Section 1. Members may elect to cancel service credit with the Teachers' Retirement System of the state of Kentucky for the purpose of adding the service credit to the member's account with a state or municipal retirement system outside Kentucky. Such service may not be cancelled if the member has received retirement benefits from the Teachers' Retirement System of the state of Kentucky based on the service to be cancelled.

Section 2. Members cancelling less than their total service credit with the Teachers' Retirement System of the state of Kentucky may receive benefits based on the remaining years of service. Members who cancel their service credit shall be entitled only to a refund of the contribution that was credited to the member's account for the cancelled service.

History

RELATES TO: KRS 161.590
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.590(2) provides that Kentucky retirement credit may not be used in calculating annuity payments if the same service credit has been used to increase benefits in another retirement system. This administrative regulation provides guidelines for transferring such credit to another retirement system, and procedures to be followed if less than total amount of Kentucky service is to be transferred.
History: 102 KAR 001:045. 1 Ky.R. 135; eff. 12-11-1974; 3 Ky.R. 376; eff. 12-1-1976; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:050 Out-of-state service interest rates {#sec-102-kar-1-050 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:050}

Section 1. In presenting out-of-state service for credit, the most recent service may be presented first in order.

Section 2. Persons presenting out-of-state service credit shall be required to file an appropriate affidavit on forms provided by the retirement system certifying that the service being transferred is not being used at present and will not be used in the future to qualify for any benefits from any other retirement program.

Section 3. Interest at the rate of eight (8) percent compounded annually from the end of each school year concerned to the date of payment shall be added to the required contributions.

History

RELATES TO: KRS 161.515
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.515 provides that members of the Teachers' Retirement System may secure credit for out-of-state service under certain circumstances, and requires the trustees to set the interest rate on contributions made to cover this service. This administrative regulation is intended to provide the procedures required to carry out the provisions of this statute and to set the interest rate to be charged.
History: 102 KAR 001:050. TRS-7(a); 1 Ky.R. 135; eff. 12-11-1974; 3 Ky.R. 376; eff. 12-1-1976; 9 Ky.R. 242; eff. 9-8-1982; 17 Ky.R. 2472; eff. 4-5-1991; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:057 Credit for military service {#sec-102-kar-1-057 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:057}

Section 1. A member may receive credit toward retirement as provided in KRS 161.507, upon meeting the eligibility requirements and payment of contributions to the Teachers' Retirement System as provided in this administrative regulation. This credit shall be used in meeting the requirements for early retirement.

Section 2. A member may purchase credit for one (1) month of retirement credit for each month or part of a month of active military service.

Section 3. A member, having valid service credit in the Teachers' Retirement System and one (1) of the other state supported retirement systems of Kentucky, may elect to purchase retirement credit for active duty time in either of the systems concerned, or the service credit may be divided between the two (2) systems. If the service is to be divided the following additional requirements shall be met:

(1) The total service credited in all systems shall not exceed six (6) years.

(2) The same years active duty shall not be used in more than one (1) system.

(3) Each system shall calculate the cost of this retirement service credit in accordance with the statutes and administrative regulations governing that system.

History

RELATES TO: KRS 161.507
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.507 provides for the crediting for retirement purposes time spent on active duty with the Armed Forces of the United States, with certain limitations. This administrative regulation establishes the procedures for validating and crediting active duty service.
History: 102 KAR 001:057. 5 Ky.R. 823; eff. 6-6-1979; 8 Ky.R. 779; eff. 3-1-1982; 17 Ky.R. 2472; eff. 4-5-1991; 29 Ky.R. 2935; 30 Ky.R. 273; eff. 8-13-2003; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:060 Refunds {#sec-102-kar-1-060 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:060}

Section 1. Definitions.

(1) "Alternate payee" is defined by KRS 161.220(26).

(2) "Qualified domestic relations order" or "QDRO" is defined by KRS 161.220(25).

Section 2. Refunds shall be made on the basis of permanent withdrawal from service in a covered position. A refund shall not be made if the member is under contract for employment in a covered position.

Section 3. Partial refunds of member contributions shall only be permitted when a member cancels service credit and obtains credit for the service in a state or municipal retirement system outside Kentucky as provided in 102 KAR 1:045.

Section 4. Administrative Provisions.

(1) Following permanent withdrawal from service, a member may contact TRS and request a refund application. A refund shall not be processed earlier than sixty (60) days after the member's termination date.

(2) Upon receipt of a request for a refund, TRS shall review the member's account. If the member is eligible for service retirement, the member shall not refund the account unless:

(a) Denial of the refund will prohibit the member from qualifying for Social Security benefits; or

(b) The member will be using the refund to obtain credit in another retirement plan.

(3) If the member is eligible for service retirement as provided in KRS 161.600, TRS shall provide the member with instructions on how to apply for service retirement.

(4) If the member is eligible for a refund, TRS shall forward the following:

(a) A TRS Refund Application for Withdrawal of Account Balance form;

(b) A Direct Rollover Statement;

(d) A Special Tax Notice Regarding Plan Payments.

(5) If the member worked for multiple TRS employers, Section B of the application may be duplicated as needed.

(6) TRS may accept a photocopy or facsimile of Section B of the application from the employer.

(7) If the member has not made any contributions to TRS within the last two (2) fiscal years, Section B of the application shall not be completed.

(8) The member may choose one (1) of the following payment options:

(a) Refund paid directly to the member;

(b) Refund rolled into a qualified plan or IRA; or

(c) Partial payment to the member and the remainder of the refund rolled into a qualified plan or IRA. If the member chooses the rollover option, a minimum of $200 shall be rolled into a qualified plan or IRA.

(9) If the member chooses to have all or a portion of the refund rolled into a qualified plan or IRA, the member shall forward the Direct Rollover Statement to the qualified plan or IRA for completion.

(10) The member shall file the signed application with TRS.

(11) The member shall also provide TRS with a photocopy of the member's:

(a) Signed Social Security card; and

(b) Valid driver's license.

(12) TRS shall not process the refund until the retirement system receives the member's completed application, signed Social Security card, valid driver's license, and if necessary, Direct Rollover Statement. TRS shall compare information provided by the employer in Section B of the application to the information previously provided by the employer in the annual statement or most recent payroll report to confirm the information. If there is a discrepancy between the information in Section B of the application and the information in the annual statement or most recent payroll report, TRS shall contact the employer to reconcile the information.

(13) A refund shall be processed at either the beginning or the middle of each month, whichever is the applicable date following receipt of the properly completed application.

(14) If the member requested a direct refund of the account balance, TRS shall mail the member:

(a) The refund check; and

(b) A letter that shall include a breakout of the gross, taxable, and net amount of the refund.

(15) If the member requests a partial or full rollover of the account balance, TRS shall mail the refund check directly to the qualified plan or IRA. The member shall receive a letter that shall confirm payment of the refund to the qualified plan or IRA.

(16) If a QDRO requires a portion of a member's refund to be paid to an alternate payee, the QDRO shall be submitted to TRS for approval as required by KRS 161.700 and 102 KAR 1:320.

(a) Following approval of the QDRO by TRS and entry by a court of competent jurisdiction, if the member is eligible for, and requests a refund, TRS shall forward the documents listed in subsection (4) of this section to the member.

(b) TRS shall forward to the alternate payee the following:

The Qualified Domestic Relations Order (QDRO)/Application for Withdrawal of Account Balance form (QDRO/Application);
The Qualified Domestic Relations Order (QDRO)/Direct Rollover Statement;
A Refund Tax Notice; and
A Special Tax Notice Regarding Plan Payments.

(c) The alternate payee shall file the QDRO/Application form with a copy of the Alternate Payee's signed Social Security card. If the alternate payee chooses to have all or a portion of his or her refund rolled into one (1) of the options set forth in subsection (8) of this section, the alternate payee shall forward the Qualified Domestic Relations Order (QDRO)/Direct Rollover Statement to the qualified plan or IRA for completion.

(d) TRS shall respond to the alternate payee as required by either subsection (14) or (15) of this section.

(17) Upon the death of an active, contributing member, a refund of the deceased member's account balance may be paid to:

(a) A surviving spouse who meets the requirements of KRS 161.520(2)(b);

(b) The beneficiary designated by the deceased member; or

(18) Upon the death of a retired member who Chose Option I, the Straight Life Annuity, a refund of contributions remaining in the deceased member's retirement account shall be made to the deceased member's designated beneficiary or estate.

(19) If a surviving spouse meets the requirements of KRS 161.520(3)(b)1 or 2 and wishes to waive the surviving spouse benefit, he or she shall execute a waiver prescribed by TRS.

(20) TRS shall forward either:

(a) A Refund Application for Deceased Member Account (Spouse or Non-Spouse Beneficiary) Form 12SP; or

(b) A Refund Application for Deceased Member Account – Estate, Form 12.

(21) A spouse or designated beneficiary may choose, if permitted by federal tax law, one (1) of the payment options set forth in subsection (8) of this Section.

(22) Photocopies of the spouse or designated beneficiary's signed Social Security card and valid driver's license shall be attached to the appropriate completed form. The refund shall be processed pursuant to subsections (13), (14), and (15) of this Section.

(23) TRS shall record the date of the refund on the member's account and designate the member's account status as refunded.

Section 5. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Refund Application for Withdrawal of Account Balance", 2016;

(b) "Direct Rollover Statement", 2016;

(d) "Special Tax Notice Regarding Plan Payments", 2016;

(e) "Qualified Domestic Relations Order (QDRO)/Application for Withdrawal of Account Balance", 2016;

(f) "Qualified Domestic Relations Order (QDRO)/Direct Rollover Statement", 2016;

(g) "Refund Application for Deceased Member Account (Spouse or Non-Spouse Beneficiary)" Form 12SP, January, 2019; and

(h) "Refund Application for Deceased Member Account – Estate" Form 12, January, 2019;

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 5 p.m.

History

RELATES TO: KRS 161.470, 161.520, 161.700,
STATUTORY AUTHORITY: KRS 161.310, 161.470, 161.520
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System TRS to promulgate all administrative regulations for the administration of funds of the retirement system and for the transaction of business. KRS 161.470(6) provides that members of TRS may receive a refund of their contributions, less contributions to the medical insurance fund, upon withdrawal from service. KRS 161.520 provides, if a member dies, the member's accumulated contributions may be refunded to a surviving spouse, designated beneficiary, or to the member's estate. This administrative regulation provides the administrative procedures necessary to carry out the provisions of these statutes.
History: 102 KAR 001:060. TRS-9; 1 Ky.R. 136; eff. 12-11-1974; 3 Ky.R. 377; eff. 12-1-1976; 17 Ky.R. 2473; eff. 4-5-1991; 42 Ky.R. 2405, 2554; eff. 5-6-2016; Crt eff. 7-3-2019; 45 Ky.R. 2404, 3398; eff. 7-5-2019; Crt eff. 12-17-2025.

102 KAR 1:070 Application for retirement {#sec-102-kar-1-070 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:070}

Section 1.

(1) Applications for retirement shall be filed on the Application for Service Retirement or on-line using the Web site maintained by TRS and shall include:

(a) A photocopy of the applicant's signed Social Security card;

(b) A certified birth certificate;

(d) A voided or cancelled check from the institution to which monthly disbursements shall be electronically transmitted.

(2) If the member files the application for service retirement on-line, he shall:

(a) Either mail or scan and upload the documents required by subsection (1) of this section to the Web site maintained by TRS; and

(b) Notify his employer to complete the on-line application for submission to TRS.

(3) If the member chooses either retirement Option III, IIIa, IV, or IVa, the member shall also include a photocopy of the designated beneficiary's:

(a) Signed Social Security card; and

(b) Certified birth certificate.

Section 2. If a member meets the eligibility requirements set forth in KRS 18A.225(1), and KRS 161.675(1) and (2), the retirement system shall provide the forms required by the Kentucky Department of Employee Insurance for enrollment in health insurance coverage. If the member is eligible for Medicare, the retirement system shall provide the Medicare Eligible Health Plan form.

Section 3. Applications for retirement for service shall not be filed later than the first day of the month immediately preceding the month that retirement is to be effective.

(1) Retirement for service shall be effective on the first day of the month following the date that a properly completed and filed application is received at the offices of Teachers' Retirement System.

(2) A member eligible to retire may exercise this right during a school year in which the member has been in employment if there is filed with the application a statement from the chief administrative officer or other authorized representative of the employing board or agency to the effect that the member is being released from the employment contract for the purpose of retirement.

Section 4. An application received by mail and bearing the U.S. Postal Service postmark dated on or before the filing date established in Section 2 of this administrative regulation shall be accepted as having been filed in compliance with Section 2 of this administrative regulation.

Section 5. The provisions of this administrative regulation shall apply to any member who is returning to retirement after having waived his or her retirement allowance under the provisions of KRS 161.605(11).

Section 6. Incorporation by reference.

(1) The following material is incorporated by reference:

(a) "Application for Service Retirement", (2017);

(b) "Instructions for the Withholding Certificate for TRS Annuity Payments, (2017); and

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601-3800, Monday through Friday, 8 a.m. to 5 p.m. This material may also be found on the agency's Web site at www.trs.ky.gov.

History

RELATES TO: KRS 161.600, 161.605(11), 161.640, 161.675
STATUTORY AUTHORITY: KRS 161.310(1), 161.600(4)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System TRS to promulgate all administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.600(4) requires the board to promulgate administrative regulations concerning application for an annuity to receive benefit payments. This administrative regulation establishes procedures for filing of retirement applications and for determining effective dates of annuity payments.
History: 102 KAR 001:070. TRS-10; 1 Ky.R. 136; eff. 12-11-1974; 5 Ky.R. 22; eff. 9-6-1978; 6 Ky.R. 682; eff. 8-6-1980; 29 Ky.R. 2936; 30 Ky.R. 273; eff. 8-13-2003; 33 Ky.R. 1428; eff. 2-2-2007; 35 Ky.R. 1817; 2400; eff. 6-5-2009; 39 Ky.R. 1899; 2149; eff. 5-31-2013; 42 Ky.R. 2407; eff. 5-6-2016; 44 Ky.R. 264, 903; eff. 12-1-2017; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:100 Insurance {#sec-102-kar-1-100 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:100}

Section 1. The Board of Trustees of the Teachers' Retirement System shall provide for members retired for service; members retired for disability; eligible spouses and eligible children of retired members as provided in KRS 161.675; and spouses receiving monthly benefits under the provisions of KRS 161.525, a medical benefit program that includes hospital room and board, drugs and medicines, doctor fees, nursing care, and convalescent hospital care.

Section 2. Specific material provisions and exclusions shall be provided in the blanket contract with the insurance carrier selected by the board of trustees, the master policy issued under the contract, and any modifications to the contract or master policy approved by the board of trustees.

History

RELATES TO: KRS161.675
STATUTORY AUTHORITY: KRS 161.310, 161.675
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.675 authorizes the trustees to enter into contracts with insurance carriers to provide hospital-medical insurance for members retired for service or disability and for certain dependents of retirees. This administrative regulation sets out procedures under which this coverage shall be provided.
History: 102 KAR 001:100. TRS-15(b); 1 Ky.R. 136; eff. 12-11-1974; Am. 5 Ky.R. 22; eff. 9-6-1978; 17 Ky.R. 2474; eff. 4-5-1991; 29 Ky.R. 2937; 30 Ky.R. 274; eff. 8-13-2003; Crt eff. 7-3-2019; 46 Ky.R. 1584, 2223; eff. 5-5-2020; Crt eff. 7-9-2026.

102 KAR 1:105 401(h) established pursuant to 26 U.S.C. 401(h) account {#sec-102-kar-1-105 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:105}

Section 1. Definitions.

(1) "Dependent" is defined by 26 U.S.C. 152, excluding subsections (b)(1), (b)(2), and (d)(1)(B).

(2) "Medical expense" is defined by 26 U.S.C. 213(e).

(3) "Retired", for purposes of eligibility to receive medical benefits described in 26 U.S.C. 401(h), means:

(a) An employee is eligible to receive benefits under the system;

(b) The employee is not still employed by the employer; and

(4) "System" means the retirement system administered by the Kentucky Teachers' Retirement System.

Section 2. The 401(h) account established pursuant to 26 U.S.C. 401(h) shall pay part of the subsidy for health benefits that are otherwise payable from the Medical Insurance Fund.

Section 3. The mandatory employee contribution established pursuant to KRS 161.420(5) shall be deposited in the Medical Insurance Fund.

Section 4. The health benefits shall be subordinate to the retirement benefits provided by the system.

(1) Life insurance protection shall not be provided by the system, except death benefits payable pursuant to KRS 161.655

(2) This requirement shall not be satisfied unless the actual contributions to the 401(h) account established pursuant to 26 U.S.C. 401(h) do not exceed twenty-five (25) percent of the total actual contributions to the system, other than contributions to fund past service credits, determined on an aggregate basis since the inception of the 401(h) account established pursuant to 26 U.S.C. 401(h).

Section 5.

(1) Amounts in the 401(h) account established pursuant to 26 U.S.C. 401(h) shall be for the exclusive purpose of paying medical expenses for a retiree, a retiree's spouse, or any dependent.

(2) Amounts in the 401(h) account established pursuant to 26 U.S.C. shall not be diverted for another purpose.

Section 6. An amount in the 401(h) accounts established pursuant to 26 U.S.C. 401(h) shall revert to the employer upon satisfaction of all liabilities for medical benefits.

Section 7. An employee shall not have an individual interest in the 401(h) accounts established pursuant to 26 U.S.C. 401(h).

Section 8.

(1) The 401(h) account established pursuant to 26 U.S.C. 401(h) may be commingled with the pension assets of the trust fund for investment purposes.

(2) Investment earnings shall be credited to the 401(h) account established pursuant to 26 U.S.C. 401(h) on a reasonable basis.

Section 9. Administrative and other expenses shall be charged to the 401(h) account established pursuant to 26 U.S.C. 401(h) on a reasonable basis.

History

RELATES TO: KRS 161.420, 161.655, 161.675, 26 U.S.C. 152, 213(e), 401(h)
STATUTORY AUTHORITY: KRS 161.310(1), 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of funds of the retirement system and for the transaction of business. KRS 161.716 requires the board of trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of the members of the retirement system. Pursuant to the provisions of KRS 161.420(5), this administrative regulation confirms a separate 401(h) account established pursuant to 26 U.S.C. 401(h).
History: 10 KAR 001:105. 35 Ky.R. 1940; 2401; eff. 6-5-2009; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:110 Leave of absence {#sec-102-kar-1-110 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:110}

Section 1. Members may make contributions while on leave of absence granted by the governing board of a school district or institution in accordance with the provisions of the statutes at the time the leave is granted. Payment of contributions shall be made by the end of the fiscal year next succeeding the year in which the leave was effective. A member shall not make payment on leave of absence for more than three (3) years in any ten (10) year period beginning with the first year of the leave. The administrative head of the district or institution granting the leave shall certify the granting or extension of leave to the Teachers' Retirement System. Leave for a period longer than one (1) year shall not be recognized, except the leaves may be extended annually for a total not to exceed three (3) years.

Section 2. Contributions for a period of leave shall be based on the annual salary for the last year of active service at the contribution rate in effect for the period of leave. Interest at the rate of eight (8) percent per annum shall be added for contributions paid after the end of the school year for which the leave was granted.

Section 3. A leave of absence shall not be recognized by the Teachers' Retirement System as a basis for making contributions to the system unless the member was employed in a covered position as defined in KRS 161.220(21), by the employer granting the leave and received compensation for at least one-half (1/2) a regular school year during the year the leave was granted or during the next preceding school year.

History

RELATES TO: KRS 161.545
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.545 provides that members of the Teachers' Retirement System may make contributions and receive service credit while on a leave of absence as set out in administrative regulations of the board of trustees. This administrative regulation provides procedures for receiving those contributions and granting of service credit for members on leave of absence.
History: 102 KAR 001:110. TRS-6(6); 1 Ky.R. 461; eff. 3-12-1975; 2 Ky.R. 303; eff. 3-10-1976; 3 Ky.R. 378; eff. 12-1-76; 6 Ky.R. 683; eff. 8-6-1980; 9 Ky.R. 242; eff. 9-8-1982; 29 Ky.R. 2938; 30 Ky.R. 274; eff. 8-13-2003; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:125 Omitted contributions; reinstatement of accounts {#sec-102-kar-1-125 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:125}

Section 1. In every case where a properly certified member entitled to membership under KRS 161.470 was employed, or is employed in the future, and the employer fails for any reason to deduct the retirement contribution due under the retirement Act, the employee if a member of the retirement system, and not retired, may pay the retirement contributions which should have been deducted by the employer plus eight (8) percent compound interest from the end of the year in which the service was performed to date of payment, and receive credit for those years, provided the teacher was not at fault in creating this delinquency.

Section 2. Members of the retirement system who have previously withdrawn their contributions, may reinstate these accounts by complying with the requirements of KRS 161.470(3), and by repaying the amount refunded plus interest at the rate of eight (8) percent compounded annually from the date of withdrawal to date of repayment.

History

RELATES TO: KRS 161.560
STATUTORY AUTHORITY: KRS 161.310, 161.470, 161.560
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.560 requires each agency employing members of the Teachers' Retirement System to deduct the appropriate member contributions and forward the contributions to the system on a monthly basis. This administrative regulation sets out the conditions under which these required contributions shall be paid in the event the employing agency fails to deduct these amounts from the member's salary and forward the contributions to the retirement system.
History: 102 KAR 001:125. TRS-24; 1 Ky.R. 137; eff. 12-11-74; Am. 9 Ky.R. 244; eff. 9-8-82; 17 Ky.R. 2475; eff. 4-5-91; Crt eff. 2-27-2020; 46 Ky.R. 1585, 2223, 2389; eff. 6-2-2020; Crt eff. 7-9-2026.

102 KAR 1:130 Additional contributions {#sec-102-kar-1-130 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:130}

Section 1. The member and employer contributions for salaries paid from federal project funds or nonpublic funds shall be forwarded to the Teachers' Retirement System as provided in KRS 161.560.

Section 2. Members employed by employers covered by Section 1 of this administrative regulation may make contributions for part-time, substitute, and partial year's service as provided in Teachers' Retirement System administrative regulations for other members of the Teachers' Retirement System. Employers shall be required to make additional contributions for these employees in the same manner as provided for full-time employees.

Section 3. Members employed by employers covered by this regulation may make contributions while on an approved leave administrative of absence, providing the employer or the employee makes an additional contribution equal to the regular member contribution for the period of time covered by the leave of absence.

History

RELATES TO: KRS 161.220, 161.555
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.220(4)(f) and 161.555 provide that agencies employing members of the Teachers' Retirement System and whose salaries are paid from federal project funds or from nonpublic funds, shall make additional contributions to the system equal to the contributions of the members. This administrative regulation sets out the manner of transmitting these additional contributions to the system.
History: 102 KAR 001:130. 1 Ky.R. 137; eff. 12-11-1974; 3 Ky.R. 379; eff. 12-1-1976; 17 Ky.R. 2476; eff. 4-5-1991; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:135 Interest credited to accounts {#sec-102-kar-1-135 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:135}

Section 1. For individuals who became members prior to July 1, 2008, interest at the rate of three (3) percent shall be credited to the member's account as long as the member is in active status with the retirement system. For individuals who become members on or after July 1, 2008, interest at the rate of two and one-half (2.5) percent shall be credited to the member's account as long as the member is in active status with the retirement system.

Section 2. For purposes of this administrative regulation "active status" means the status of a member who has vested with at least five (5) years of service credit with the retirement system. Members with less than five (5) years of service credit shall be deemed to be in active status if they have had any service in the most recent three (3) years.

Section 3. No interest shall be credited to member accounts during the first fiscal year of membership. Subsequent to the first fiscal year of membership, interest shall be credited as of June 30 of each year of active status.

Section 4. At the end of each fiscal year, interest shall be assigned from the guarantee fund to individual funds as follows:

(1) The teachers' savings fund and the state accumulation fund shall be assigned equal amounts of interest in accordance with Sections 1, 2, and 3 of this administrative regulation.

(2) The allowanced reserve fund shall be assigned interest based upon the average month end balance of the fund for each fiscal year.

History

RELATES TO: KRS 161.440, 161.580, 161.705
STATUTORY AUTHORITY: KRS 161.310, 161.440, 161.580
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.440 requires crediting interest, as defined in KRS 161.220(13), to the various funds of the Teachers' Retirement System, and KRS 161.580 requires that individual accounts be maintained for each member of the system. This administrative regulation sets out the procedures to be followed in crediting interest to each member's account.
History: 102 KAR 001:135. TRS-17(a); 1 Ky.R. 462; eff. 3-12-75; Am. 2 Ky.R. 7; eff. 9-10-75; 17 Ky.R. 2476; eff. 4-5-91; Crt eff. 2-27-2020; 46 Ky.R. 1586, 2223; eff. 5-5-2020; Crt eff. 7-9-2026.

102 KAR 1:138 Crediting of interest for TRS 4 members {#sec-102-kar-1-138 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:138}

Section 1. Definitions.

(1) For TRS 4 members "Regular interest" is defined by KRS 161.220(13)(c).

(2) "TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.

Section 2. Regular interest for TRS 4 members for the supplemental benefit component and for the first sixty (60) months for the foundational benefit component shall be the rolling five (5) year yield on a thirty (30) year United States Treasury Bond as of the end of May prior to the most recently completed fiscal year. The thirty (30) year U.S. Treasury bond rate at the daily close of the markets is published by the Board of Governors of the Federal Reserve System and is posted on the website of the Federal Reserve Bank of St. Louis. The daily closing yield is titled "Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted on an Investment Basis (DGS30)" and is found at https://fred.stlouisfed.org/series/DGS30 displayed as a percentage, not seasonally adjusted using the daily frequency.

Section 3. The rolling five (5) year yield shall be calculated by adding the closing yield for each trading day of the last five (5) years ending with the last trading day in the month of May and dividing by the number of trading days in the five (5) year period. The result is the regular interest rate to be created in accordance with KRS 161.220(13).102 KAR 1:138. Crediting of regular interest for TRS 4 members.

History

RELATES TO: KRS 161.440, 161.580
STATUTORY AUTHORITY: KRS 161.220, 161.310, 161.580
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate administrative regulations for the administration of funds of the retirement system. KRS 161.440 requires crediting interest, as defined in KRS 161.220(13), to the various funds of TRS, and KRS 161.580 requires that individual accounts be maintained for each member of the system. This administrative regulation sets out procedures to be followed in crediting interest to each TRS 4 member's account.
History: 51 Ky.R. 430; eff. 430; eff. 11-8-2024.

102 KAR 1:140 Disability {#sec-102-kar-1-140 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:140}

Section 1. When a retirement allowance is recalculated following the termination of the entitlement period for disability benefits, the member may choose any option plan authorized under KRS 161.630. Survivors of a member whose allowance has been recalculated shall not be eligible for survivor benefits as set forth in KRS 161.520.

Section 2. Requirements for medical reexaminations, income and employment restrictions, and reevaluation of eligibility status, shall be the same as disability retirement in KRS 161.661.

Section 3. Any medical coverage extended to persons retired by reason of disability under the terms of the statutes and contracts with insurance carriers shall be deemed to extend to those persons who retired by reason of disability on July 1, 1964, and thereafter, and whose eligibility period as set forth in KRS 161.661(3) and (5), has expired.

History

RELATES TO: KRS 161.661
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.661(5) provides that benefits to disability retirees shall be recalculated at the termination of the entitlement period as defined in KRS 161.661(3). This administrative regulation sets out the procedures to be followed in making these new calculations of payable benefits.
History: 102 KAR 001:140. TRS-30; 1 Ky.R. 462; eff. 3-12-1975; 17 Ky.R. 2477; eff. 4-5-1991; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:145 Basis for options {#sec-102-kar-1-145 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:145}

Section 1. In every case, the date of birth of a beneficiary shall be proven by birth certificate, a sworn statement of the member, or other evidences as the board may require.

Section 2. With reference to any appropriate option chosen by a retiring member as a result of regular matched contributions, if at any time the General Assembly by amendment to the Retirement Act, or otherwise, provides increases in the retirement allowances of retired teachers, the increase due, if any, shall be calculated upon the basis of the attained ages of the retiree and the beneficiary on the effective date of the member's retirement.

Section 3. The annuities provided for shall be determined by such appropriate annuity mortality tables for male and female lives in use by the system, as prepared by the actuary, and approved by the board of trustees.

History

RELATES TO: KRS 161.630
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.630 provides that a member of the Teachers' Retirement System, retiring for service, may elect an actuarial equivalent benefit in lieu of the life annuity provided for in KRS 161.620. This administrative regulation sets out the procedures to be used in calculating these optional benefits.
History: 102 KAR 001:145. TRS-21(a); 1 Ky.R. 462; eff. 3-12-1975; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:150 Optional benefits {#sec-102-kar-1-150 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:150}

Section 1. Option I - Straight Life Annuity with Refundable Balance. If no option is chosen by the retiring member, or if member is retiring for disability, Option I shall prevail, and shall consist of a life annuity (a retirement allowance payable throughout life). Upon death of a retired member, unless Options II, III, III(a), IV, IV(a), or V are selected, an amount consisting of the excess, if any, of his accumulated account at time of retirement over the amount of all annuity payments received by the member prior to his death shall be refundable to his named beneficiary or to his estate, pursuant to KRS 161.650.

Section 2. Option II - Annuity for Ten (10) Years Certain and for Life Thereafter.

(1) At time of retirement the retiring member may file with application for retirement a sworn statement choosing Option II, and this option shall be a lesser annuity actuarially equivalent to the annuity provided under Option I above with payments guaranteed for ten (10) years in any event and for life thereafter if the member survives the ten (10) year period from date of retirement. If the member's death occurs within the ten (10) year guarantee period, annuity payments shall continue for the remainder of the ten (10) year guarantee period to the named beneficiary, if any, or estate.

(2) Death during the first thirty (30) days immediately after retirement shall not affect the payment of this annuity for ten (10) years certain.

(3) Under Option II, a member may also select an annuity for five (5), fifteen (15), or twenty (20) years certain and for life thereafter under the conditions provided for the ten (10) years certain annuity, except that the length of time that the survivor would receive an annuity if the member dies would vary according to the years certain option selected. To select a years certain period other than ten (10) years certain, the member shall specifically designate the number of years to be included in the years certain period. Selection of Option II without designation of a period of years certain shall be deemed to be the selection of Option II as an annuity for ten (10) years certain and life thereafter.

(4) Under Option II, in the event of the death of both the member and the primary beneficiary before the expiration of the years certain period selected by the member, the surviving contingent beneficiary, if any, shall be entitled to receive annuity payments for the remainder of the term certain. In the event of the death of the surviving contingent beneficiary who has been predeceased by the member and the primary beneficiary prior to the expiration of the years certain period, a lump sum payment of the present value of all remaining annuity payments shall be paid to the contingent beneficiary's estate. In the event that the primary beneficiary dies before the expiration of the years certain period, but the member did not designate a contingent beneficiary, or the contingent beneficiary predeceases the primary beneficiary, a lump sum payment of the present value of all remaining annuity payments shall be paid to the primary beneficiary's estate, unless the primary beneficiary predeceases the member in which case a lump sum payment of the present value of all remaining annuity payments shall be paid to the member's estate.

Section 3. Option III - Joint and Last Survivor Annuity.

(1) The retiring member may file with application for retirement a sworn statement choosing Option III, and this option shall be a lesser annuity actuarially equivalent to the annuity provided under Option I above with payments continuing for the life of the annuitant (member) plus the provision that upon his death prior to that of his named beneficiary his annuity shall be continued throughout the life of the beneficiary having an insurable interest in the life of the member.

(2) If both annuitant and the named beneficiary die within thirty (30) days after date of retirement, this option shall be void and Option I shall prevail.

Section 4. Option III(a) - Joint and Last Survivor with "Pop-up" Option. The retiring member may file with application for retirement a sworn statement choosing Option III(a), which option shall be a lesser annuity actuarially equivalent to the annuity provided under Option I and incorporating the same guarantee provision as Option III with the additional provision that if the named beneficiary dies prior to the death of the annuitant, the benefit payable shall revert to that which would have been applicable under Option I at the time of retirement of the member.

Section 5. Option IV - Joint and Last Survivor Annuity, One-half (1/2) Benefit to Survivor.

(1) The retiring member may file with application for retirement a sworn statement choosing Option IV, which option shall be a lesser annuity actuarially equivalent to the annuity provided under Option I above with payments continuing for the life of the annuitant (member) plus the provision that upon his death prior to that of his named beneficiary one-half (1/2) of his annuity shall be continued throughout the life of the beneficiary having an insurable interest in the life of the member.

(2) If both the annuitant and the beneficiary die within thirty (30) days after retirement, this option shall be void and Option I shall prevail.

Section 6. Option IV(a) - Joint and Last Survivor with One-half (1/2) to Surviving Beneficiary with "Pop-up" Option. The retiring member may file with application for retirement a sworn statement choosing Option IV(a), which option shall be a lesser annuity actuarially equivalent to the annuity provided under Option I and incorporating the same guarantee provision as Option IV with the additional provision that if the named beneficiary dies prior to the death of the annuitant, the benefit payable shall revert to that which would have been applicable under Option I at the time of retirement of the member.

Section 7. Option V - General. In lieu of any option outlined above, the retiring member may file with his or her application for retirement a sworn statement requesting that some other benefit or benefits be paid to the member with or without a survivorship option that upon the death of the member would pay to the other person or persons having an insurable interest in the life of the member as he or she shall nominate in writing, if the other benefit or benefits, together with the lesser annuity, shall be certified by the actuary to be of equivalent actuarial value to the annuity provided under Option I above and shall be approved by the board.

History

RELATES TO: KRS 161.620, 161.630, 161.650
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky to promulgate administrative regulations for the administration of retirement system funds and for the transaction of business. KRS 161.630 provides that a member of the Teachers' Retirement System retiring for service, may elect an optional benefit in lieu of the life annuity provided by KRS 161.620. This administrative regulation establishes the various options which may be elected by the retiring member at the time of retirement.
History: 102 KAR 001:150. TRS-22(b); 1 Ky.R. 463; eff. 3-12-1975; 29 Ky.R. 2939; 30 Ky.R. 274; eff. 8-13-2003; 1825; 2018; eff. 3-18-2004; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:155 Annuity payments {#sec-102-kar-1-155 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:155}

Section 1. After an annuity or retirement allowance is authorized by the board, the secretary shall, without further authorization cause the annuity or allowance checks to be issued regularly during the lifetime of the annuitant, or in accordance with the terms of the option chosen by the member.

Section 2. The last check shall be issued for the pro rata amount from the first day of the pay period to and including the day of death.

History

RELATES TO: KRS 161.640
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.640 sets out the manner of approving and paying annuities. This administrative regulation provides further guidelines for carrying out the provisions of this statute.
History: 102 KAR 001:155. TRS-18; 1 Ky.R. 463; eff. 3-12-1975; 6 Ky.R. 683; eff. 8-6-1980; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:163 Collection of life insurance benefits {#sec-102-kar-1-163 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:163}

Section 1. Following notification of the death of a member or retiree, TRS shall contact the named beneficiary or estate of the deceased.

Section 2. The Application for Life Insurance Benefit (Form 9) shall be executed by the designated beneficiary or representative of the estate. The application shall be accompanied by the following:

(1) A copy of the member's or retiree's certified death certificate;

(2) If the benefit is payable to the estate, the member failed to designate a beneficiary, or the designated beneficiary has died, a copy of the court order:

(a) Appointing the executor, administrator, or personal representative of the estate; or

(b) Dispensing with formal administration of the estate and a completed Affidavit for Collection of Life Insurance Benefit.

(3) If the benefit is payable to a minor child, a copy of the child's birth certificate. If the child has a court appointed guardian or conservator, a copy of the court order appointing the guardian or conservator;

(4) If the benefit is payable to an existing trust, a copy of the trust document;

(5) If the benefit is payable to an individual and the individual has experienced a name change since the beneficiary designation was made, a copy of the individual's signed Social Security card;

(6) If the member or retiree marries after designating a beneficiary, a copy of the certified marriage certificate; and

(7) If the member or retiree obtains a divorce after designating a beneficiary, a copy of the divorce decree.

Section 3. The life insurance benefit shall be paid after all required information, documents and completed forms are received by TRS.

Section 4. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Application for Life Insurance Benefit" (Form 9), January 2019; and

(b) "Affidavit for Collection of Life Insurance Benefit", January 2019.

History

RELATES TO: KRS 161.655
STATUTORY AUTHORITY: KRS 161.310, KRS 161.655
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of Teachers' Retirement System (TRS) to promulgate administrative regulations for the administration of funds of the retirement system and for the transaction of business. KRS 161.655 provides that upon the death of a member or retiree, a life insurance benefit shall be provided. This administrative regulation establishes the process for issuance of the benefit upon the death of a member or retiree.
History: 102 KAR 00:163. 45 Ky.R. 2526, 3047; eff. 5-31-2019; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:165 Surviving children's benefits {#sec-102-kar-1-165 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:165}

Section 1. Definitions.

(1) "Full-time student" means a student who is in full-time attendance in a recognized educational program and is carrying a subject load that is considered full time for day students under the standards and practices of the educational institution.

(2) "Recognized educational program" means an educational program beyond the high school level that has been approved by a state, or accredited by a state or nationally-recognized accrediting agency.

Section 2.

(1) An application for survivor's benefits for a minor child shall be filed on the Application for Survivor Benefits form and shall include a photocopy of:

(a) The child's Social Security card; and

(b) The child's certified birth certificate.

(2) If the application is approved, the minor child's monthly payment shall continue until one (1) of the conditions for termination of benefits in KRS 161.520(6) is met.

Section 3.

(1) If a child meets the requirements set forth in KRS 161.520(3)(a), an Application for Adult Disabled Child Benefit form may be filed and shall include:

(a) A photocopy of the child's Social Security card;

(b) A photocopy of the child's certified birth certificate;

(d) Report of Physician for Applicant/Disabled Child Benefit form; and

(e) Authorization for Direct Deposit of $200 Adult Disabled Child Benefit form.

(2) If the application is approved, the adult child's monthly payment shall continue until one (1) of the conditions for termination of benefits in KRS 161.520(3)(a) is met.

Section 4. A minor child receiving payment of survivor's benefits shall be paid in full for any month in which some payment is due. If the child is, or plans to be, a full-time student in a recognized educational program, he may apply for continuation or restoration of his monthly benefit. If the child's application is approved, his monthly payment shall continue until one (1) of the conditions for termination of benefits in KRS 161.520(6) is met.

Section 5. If the child is a full-time student in a recognized educational program when he reaches age eighteen (18), he shall make application for continuation of his benefit at least thirty (30) days prior to his 18th birthday. A child who is accepted as a full-time student in a recognized educational program after he attains age eighteen (18) shall make application for restoration of his monthly benefit at least thirty (30) days prior to his registration as a student.

Section 6. Benefit payments for a properly qualified student shall begin with the first month in which he is in full-time attendance at a recognized educational program. The student shall be eligible for a full monthly benefit for his first month of attendance.

Section 7. Proof of full-time school attendance shall be required if a child has reached age eighteen (18) but not age twenty-three (23). If the child is eighteen (18) and in high school, within ten (10) days of receipt, the child shall complete and file the Student's Statement Regarding School Attendance form. If the child is a student in a recognized educational program, the child shall provide proof of continuing full-time school attendance by completing and filing the Student's Information Update Form after he has attended his first day of class. The information supplied by the child shall be corroborated by either a Verification of Full-Time High School Attendance form or a Verification of Full-Time College Attendance form completed and filed by the appropriate high school or recognized educational program.

Section 8. Benefit payments may continue through the normal school vacation periods if the child was a full-time student immediately prior to the vacation period and he intends to continue full-time or actually does attend full-time after the end of the vacation period. Benefit payments shall not be made for more than four (4) months of vacation time during a school year. Benefit payments shall not be made during the summer vacation periods or the following school semesters until the Student's Statement Regarding School Attendance form is received by the retirement system.

Section 9. If TRS verifies that a child has received survivor's benefits for a period in which the child was either no longer dependent or not enrolled as a full-time student in a recognized educational program, TRS shall seek reimbursement of the benefits paid for that period.

Section 10. A child eighteen (18) and younger may be entitled to benefits retroactively to the date of the member's death. A full-time student in a recognized educational program may be entitled to benefits retroactively for as many as six (6) months, beginning with the first month in the six (6) month retroactive period in which he met all the requirements to be entitled to benefits except for the filing of an application.

Section 11. When a child attains age eighteen (18) and continues to be entitled to benefits as a full-time student, the person who has been receiving the benefit payments shall continue to receive the payments unless it is deemed advisable to make payment directly to the child or in some other manner.

Section 12. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Application for Survivor Benefits" form (Form 15), 2016;

(b) "Student's Statement Regarding School Attendance" form (SUR-1), 2016;

(d) "Verification of Full-Time College Attendance" form (SUR-3), 2016;

(e) "Verification of Full-Time High School Attendance" form (SUR-4), 2016;

(f) "Application for Adult Disabled Child Benefit" form (Form 19), 2016;

(g) "Report of Physician for Applicant/Disabled Child Benefit" form, 2016; and

(h) "Authorization for Direct Deposit of $200 Adult Disabled Child Benefit" form, 2016.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky 40601-3800, Monday through Friday, 8 a.m. to 5 p.m.

History

RELATES TO: KRS 161.520
STATUTORY AUTHORITY: KRS 161.310, 161.520(7), (8)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Kentucky Teachers' Retirement System (TRS) to promulgate administrative regulations for the administration of funds of the retirement system and for the transaction of business. KRS 161.520(8) requires the board to promulgate administrative regulations for the administration of survivor's benefits for a deceased member's child. KRS 161.520(7) provides that the Board of Trustees of TRS may require application for survivor's benefits. This administrative regulation defines "recognized educational program," and establishes specific guidelines for administering survivor's benefits and this authorized extension of the benefit period.
History: 102 KAR 001:165. TRS-8(a); 1 Ky.R. 463; eff. 3-12-1975; Am. 17 Ky.R. 2479; 2939; eff. 4-5-1991; 29 Ky.R. 2940; 30 Ky.R. 275; eff. 8-13-2003; 43 Ky.R. 258, 528; eff. 11-4-2016; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:168 Survivor's benefits {#sec-102-kar-1-168 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:168}

Section 1.

(1) If a deceased member's survivor meets the requirements set forth in KRS 161.520(1), (4), or (5), an Application for Survivor Benefits form may be filed and shall include a photocopy of:

(a) The survivor's signed Social Security card;

(b) The survivor's certified birth certificate; and

(2) If the survivor is a dependent parent or dependent adult sibling, the application shall also include a copy of the most recent Federal Income Tax Return listing the parent or sibling as a dependent.

(3) If the survivor is the deceased member's spouse, the application shall also include a copy of the parties' certified marriage certificate.

(4) If the application is approved, the survivor's monthly payment shall continue until one (1) of the conditions for termination of benefits in KRS 161.520(6) is met.

(5) If the surviving spouse or legal dependent meets the requirements of KRS 161.525, he or she may elect to receive an actuarially equivalent annuity. The annuity shall be calculated, processed, and disbursed in accordance with the provisions of KRS 161.525.

(6) Payments shall not be made until all required information, documents, and completed forms are received at the retirement system office.

Section 2. Incorporation by Reference.

(1) The "Application for Survivor Benefits" Form 15, January, 2019 is incorporated by reference.

History

RELATES TO: KRS 161.520
STATUTORY AUTHORITY: KRS 161.310, 161.520
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System (TRS) to promulgate administrative regulations for the administration of funds of the retirement system. KRS 161.520(8) requires the board to promulgate administrative regulations for the administration of survivor's benefits for a deceased member's spouse, dependent parent or dependent sibling. KRS 161.520(7) provides that the board may require application for survivor's benefits. This administrative regulation establishes the guidelines for applying for survivor's benefits.
History: 102 KAR 001:168. 45 Ky.R. 2527, 3047; eff. 5-31-2019; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:170 Minimum distribution {#sec-102-kar-1-170 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:170}

Section 1. Definitions.

(1) "Member" means a member of a retirement fund established in accordance with KRS 161.220 to 161.990 and administered by the Kentucky Teachers' Retirement System.

(2) "Required beginning date" means April 1 of the calendar year following the later of:

(a) The calendar year in which the member attains age seventy and one-half (70 1/2); or

(b) The calendar year in which the member retires.

Section 2.

(1) This administrative regulation shall apply to any member of a fund established in accordance with KRS 161.230.

(2) Kentucky Teachers' Retirement Systems shall pay all benefits in accordance with a good faith interpretation of the requirements of 26 U.S.C. 401(a)(9), 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) shall take precedence over any inconsistent provisions of KRS 161.220 to 161.990.

(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, to the member not later than the member's required beginning date.

(2) If the member dies before distribution begins, the member's entire interest shall be distributed, or begin to be distributed, not later than as follows:

(a) Except as provided in subsection (3) of this section, if the member's surviving spouse is the member's sole designated beneficiary, distributions to the surviving spouse shall begin by the later of:

December 31 of the calendar year immediately following the calendar year in which the member died; or
December 31 of the calendar year in which the member would have attained age seventy and one-half (70 1/2);

(b) If the member's surviving spouse is not the member's sole designated beneficiary, distributions to each designated beneficiary shall begin by December 31 of the calendar year immediately following the calendar year in which the member died; or

(c) If there is not a designated beneficiary as of September 30 of the year following the year of the member's death, the member's entire interest shall be distributed by December 31 of the calendar year containing the fifth anniversary of the member's death; or

(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 subsections (2) and (3) of this section and Section 6 of this administrative regulation, distributions shall be required to 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 satisfy the following requirements:

(a) The annuity distributions shall be paid in monthly periodic payments;

(b) The distribution period shall be over a life (or lives) or over a period certain not longer than the period described in this section or Section 5 or 6 of this administrative regulation;

(c) Once payments have begun over a period certain, the period certain shall not be changed even if the period certain is shorter than the maximum permitted; and

(d) Payments shall increase only as follows:

By the annual percentage increase provided for pursuant to KRS 161.620(5) and (6);
To the extent of the reduction in the amount of the member's payments to provide for a survivor benefit upon death as provided pursuant to KRS 161.630(1) and 102 KAR 1:150, Sections 4, 6, and 7, 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 the payment increases pursuant to KRS 161.630(2)(a) as a result of their divorce;
To provide cash refunds of employee contributions upon the member's death; or
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 under Section 3(2) 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 pursuant to the incidental death benefit requirement of 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, Q&A-2.

(2)

(a) The death and disability benefits provided by Kentucky Teachers' Retirement System shall be limited by the incidental benefit rule established in 26 U.S.C. 401(a)(9)(G) and 26 C.F.R. 1.401-1(b)(1)(i).

(b) .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 Teachers' Retirement System.

(3)

(a) Unless the member's spouse is the sole designated beneficiary and the form of distribution is a period certain without 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. section 1.401(a)(9)-9 for the calendar year that contains the annuity starting date.

(b) If the annuity starting date precedes the year in which the member reaches age seventy (70), the applicable distribution period for the member shall be the distribution period for age seventy (70) under the uniform lifetime table established in 26 C.F.R. 1.401(a)(9)-9 plus the excess of seventy (70) over the age of the member as of the member's birthday in the year that contains the annuity starting date.

(4) If the member's spouse is the member's sole designated beneficiary and the form of distribution is a period certain without 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 not 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 the member's 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 notwithstanding Section 3(2)(a) of this administrative regulation.

History

RELATES TO: KRS 161.155, 161.230, 161.470, 161.520, 161.522, 161.525, 161.569, 161.620, 161.630, 161.640, 161.650, 161.661, 161.663, 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 161.310(1), 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of funds of the retirement system and for the transaction of business. KRS 161.716 requires the board of trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of the members of the retirement system. This administrative regulation implements the statutory requirements of 26 U.S.C. 401(a)(9), and is based on a reasonable good faith interpretation of those statutory requirements. This administrative regulation establishes minimum distribution requirements in compliance with 26 U.S.C. 401(a)(9).
History: 102 KAR 001:170. 35 Ky.R. 1941; 2401; eff. 6-5-2009; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:175 Investment policies {#sec-102-kar-1-175 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:175}

Section 1. Investment Committee.

(1)

(a) The board of trustees shall appoint an investment committee in accordance with the provisions of KRS 161.430(1). The trustees shall be named at the beginning of each fiscal year.

(b) The executive secretary shall act on behalf of the investment committee in administering the investment policies and procedures established in this administrative regulation.

(c) To ensure a timely market transaction, the executive secretary and the chief investment officer may make a purchase or sale of an investment instrument without prior board approval if the action conforms to the provisions established in this administrative regulation.

(2) The staff investment personnel employed by the board under KRS 161.430(1) may be delegated transaction responsibilities under the supervision of the chief investment officer and the executive secretary.

(3)

(a) Contracts with contracted investment counselors employed under KRS 161.430(1) shall be on a fiscal year basis for twelve (12) month periods, except that contracts entered into on or after the start of a fiscal year shall not extend beyond the end of the fiscal year in which the contract is entered.

(b) The system may invest in either separately-managed accounts or commingled funds.

(c) The investment committee shall make recommendations to the board regarding employment of investment counselors and the renewal or nonrenewal of contracts.

(d)

The system may utilize the services of a consultant to advise the investment committee, as well as to assist in evaluating the effectiveness of investment counselors.
A consultant may advise the investment committee with regard to asset class allocation and the combined effect of the various portfolios on the system's overall risk and expected long-term return.

(e) Investment counselors shall provide reports documenting their results at least quarterly and meet with the investment committee if requested.

(f) An annual report on the performance and service of each investment counselor shall be provided to the board with recommendations from the investment committee.

(4) The following procedures shall be followed with regard to all investment transactions, whether internally or externally managed:

(a) The board shall be provided a quarterly report reflecting a complete record of each investment transaction that occurred during that quarter;

(b) The investment committee shall be provided a complete record of each investment transaction or holding;

(c) The staff shall maintain a file of investment directives that indicates the committee's separate review of each specific long-term investment; and

(d) An "authorization for investment" shall be approved or denied by the executive secretary or the chief investment officer.

Section 2. Asset Allocation.

(1) In order to preserve the assets of the system and produce the required rate of return while minimizing risk, assets shall be prudently diversified among various classes of investments.

(2) In determining asset allocation policy, the investment committee and the board shall be mindful of the system's liquidity and its capability of meeting both short and long-term obligations. The limitations established in this subsection shall apply to the asset classes in which funds are invested.

(a) There shall not be a limit on the amount of investments owned by the system if the investments are guaranteed by the United States government.

(b) The amount invested in corporate debt obligations shall not equal more than thirty-five (35) percent of the assets of the system.

(c) The amount invested in common stocks or preferred stocks shall not equal more than sixty-five (65) percent of the assets of the system.

(d) The amount invested in a stock portfolio designed to replicate a general stock index shall not equal more than twenty-five (25) percent of the assets of the system.

(e) More than thirty (30) percent of the assets of the system shall not be invested in the stocks of companies domiciled outside of the United States. An amount of this type if invested shall be included in the sixty-five (65) percent limitation established under this subsection.

(f) The amount invested in real estate shall not equal more than ten (10) percent of the assets of the system. Real estate shall include real estate equity, real estate lease agreements, and shares in real estate investment trusts.

(g) The amount invested in alternative investments shall not equal more than ten (10) percent of the assets of the system. This category may include private equity, venture capital, timberland, and infrastructure investments.

(h)

The amount invested in an additional category or categories of investments shall not equal more than fifteen (15) percent of the assets of the system.
The board shall approve or deny by resolution any additional category or categories of investments.

Section 3. Fixed Income Investments. The specific guidelines associated with a fixed income investment shall be established in this section.

(1) Unless the issuer is the United States government or a government sponsored enterprise (GSE), the amount invested in the securities of a single issuer shall not equal more than five (5) percent of the assets of the system.

(2)

(a) A fixed income investment shall be rated at the time of purchase as investment grade by at least one (1) of the major rating services.

(b) A private placement debt investment shall be subject to the same credit qualifications as each fixed income investment.

(c) The fixed income investment portfolio as a whole shall maintain an average rating of investment grade by at least one (1) of the major rating services.

(3) Investments in mortgages or mortgage-backed securities shall consist of first mortgages on property located in the United States unless the mortgage is guaranteed by the United States government.

(4) A foreign debt purchase shall comply with all other fixed income restrictions in this section. Foreign debt shall not in aggregate equal more than ten (10) percent of the assets of the system.

Section 4. Equity and Real Estate Investments. The requirements established in this section shall apply to equity and real estate investments.

(1)

(a) The system's position in a single stock shall not exceed two and one-half (2.5) percent of the system's assets.

(b) The system's position in a single stock shall not exceed five (5) percent of the outstanding stock for that company unless the investment is part of a venture capital program.

(2)

(a) A real estate investment shall be judged on its total return potential.

(b) The system shall not acquire undeveloped land unless development plans are imminent.

(3) The system shall not buy bullion, stamps, rare coins, or other collectibles, unless approved by the board as an additional category of investment. The board shall approve these assets as an additional category of investment only in exceptional circumstances if there is a potential investment in these assets that provides a high value opportunity and lowers the risk of the portfolio overall.

History

RELATES TO: KRS 161.430
STATUTORY AUTHORITY: KRS 161.310, 161.430(1)
CERTIFICATION STATEMENT: This is to certify that this administrative regulation complies with the requirements of 2025 RS HB 6, Section 8. The Governor's signature is included after the body of the regulation to indicate his acknowledgement of this certification.
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Teachers' Retirement System Board of Trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.430(1) requires the board of trustees to promulgate administrative regulations to establish investment policies and procedures to carry out its responsibilities and provides that the board of trustees shall have full power and responsibility for the purchase, sale, exchange, transfer, or other disposition of the investments and money of the Teachers' Retirement System. This administrative regulation establishes investment policies and procedures to carry out these responsibilities.
History: 102 KAR 001:175. TRS-26; 1 Ky.R. 464; eff. 3-12-1975; 17 Ky.R. 3214; eff. 7-5-1991; 24 Ky.R. 129; 559; eff. 9-4-1997; 31 Ky.R. 1873; 32 Ky.R. 45; eff. 8-5-2005; 33 Ky.R. 3431; eff. 7-19-2007; 37 Ky.R. 2039; 2375; eff. 5-6-2011; Crt eff. 7-3-2019; 52 Ky.R. 192; eff. 2-3-2026.)COMPILER'S NOTE: 2025 RS HB 6, enacted by the General Assembly on March 27, 2025, altered the information to be provided at the time an administrative regulation is filed. Aside from formatting changes necessary to upload the regulation into the LRC's publication application, this regulation has been published as submitted by the agency.

102 KAR 1:178 Investment policies for insurance trust fund {#sec-102-kar-1-178 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:178}

Section 1.

(1)

(a) The board of trustees shall appoint an investment committee in accordance with the provisions of KRS 161.430(1). The trustees shall be named at the beginning of each fiscal year.

(b) The executive secretary shall act on behalf of the investment committee in administering the investment policies and procedures established in this administrative regulation.

(3)

(a) Contracts with contracted investment counselors employed under KRS 161.430(1) shall be on a fiscal year basis for twelve (12) month periods, except that contracts entered into on or after the start of the fiscal year shall not extend beyond the end of the fiscal year in which the contract is entered.

(b) The system may invest in either separately managed accounts or commingled funds.

(c) The investment committee shall make recommendations to the board regarding employment of investment counselors and the renewal or nonrenewal of contracts.

(d)

The system may utilize the services of a consultant to advise the investment committee, as well as to assist in evaluating the effectiveness of investment counselors.
A consultant may advise the investment committee with regard to asset class allocation and the combined effect of the various portfolios on the system's overall risk and expected long-term return.

(e) Investment counselors shall provide reports documenting their results at least quarterly and meet with the investment committee if requested.

(f) An annual report on the performance and service of each investment counselor shall be provided to the board with recommendations from the investment committee.

(4) The following procedures shall be followed with regard to all investment transactions, whether internally or externally managed:

(a) The board shall be provided a quarterly report reflecting complete record of each investment transaction that occurred during that quarter;

(b) The investment committee shall be provided a complete record of each investment transaction or holding;

(c) The staff shall maintain a file of investment directives that indicates the committee's separate review of each specific long-term investment; and

(d) An "authorization for investment" shall be approved by the executive secretary or the chief investment officer.

Section 2. Asset Allocation.

(1) In order to preserve the assets of the system and produce the required rate of return while minimizing risk, assets shall be prudently diversified among various classes of investments.

(2) In determining asset allocation policy, the investment committee and the board shall be mindful of the system's liquidity and its capability of meeting both short and long-term obligations.

History

RELATES TO: KRS 161.430
STATUTORY AUTHORITY: KRS 161.310(1), 161.430(1), 161.677
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Teachers' Retirement System Board of Trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.430(1) requires the board of trustees to promulgate administrative regulations to establish investment policies and procedures to carry out its responsibilities and provides that the board of trustees shall have full power and responsibility for the purchase, sale, exchange, transfer, or other disposition of the investments and money of the Teachers' Retirement System. KRS 161.677(3) provides that the board of trustees shall manage the Kentucky Teachers' Retirement System insurance trust fund in the same general manner in which it administers retirement funds. The administrative regulation establishes investment policies and procedures to carry out these responsibilities for the Kentucky Teachers' Retirement System insurance trust fund.
History: 102 KAR 001:178. 37 Ky.R. 2303; eff. 6-3-2011; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:180 Kentucky Industrial Development Finance Authority investments {#sec-102-kar-1-180 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:180}

Section 1.

(1) The board of trustees will consider requests by the Kentucky Industrial Development Finance Authority for loans when loan requests are submitted. Requests shall be made in writing thirty (30) days in advance of the time funds are needed and shall be signed by the chairman of the authority. Each request shall contain a reference to the action of the authority authorizing the request for the loan. Any loan made pursuant to the request of the authority shall be evidenced by an instrument or instruments of indebtedness executed by the authority and signed by the chairman. All instruments shall be approved by the Attorney General. Any transfer of funds shall be by interaccount bill as provided in KRS 154.170.

(2) The investment committee shall review each request and approve or disapprove the request subject to the action of the board of trustees.

(3) Loans made to the authority shall bear interest, payable semiannually, on July 1 and January 1, at a rate of return equal to that available on corporate bonds, rated AA or the equivalent by one (1) or more nationally recognized rating services, of the most recent issue. In the event more than one (1) issue has been offered on the same date, the rate available on the largest issue shall be used.

(4) Loans made to the authority shall be for a period of not more than twenty-five (25) years. During the first five (5) years of these loans, interest shall be paid as set forth in subsection (3) of this section, and the authority shall have the right to pay all or any part of the principal during this period. Beginning with the sixth year, the authority shall pay interest and at least that percentage of the remaining principal balance necessary to retire the loan within the remaining life of the loan.

(5) The authority shall furnish to the board of trustees an annual financial statement of its accounts.

(6) During any fiscal year, the amount of funds loaned to the authority by the Teachers' Retirement System shall be in the same proportion to the total amount loaned as the assets of the Teachers' Retirement System are to the total assets of all the retirement systems.

History

RELATES TO: KRS 161.430
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.430(1) provides that the board of trustees shall give priority to the investment of funds in obligations calculated to improve the industrial development and enforce the economic welfare of the Commonwealth. This administrative regulation sets out guidelines to be followed in investing in obligations of the Kentucky Industrial Development Finance Authority.
History: 102 KAR 001:180. TRS-14; 1 Ky.R. 464; eff. 3-12-1975; 17 Ky.R. 2480; 2940; eff. 4-5-1991; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:185 Reciprocal program between County Employees Retirement System, Kentucky Employees Retirement System, State Police Retirement System, Legislators' Retirement Plan, Judicial Retirement System, and Teachers' Retirement System {#sec-102-kar-1-185 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:185}

Section 1. Upon death, disability, or service retirement, the following procedure shall be applicable to a member having an account in more than one (1) retirement system:

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

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

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

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

Section 2.

(1) Reciprocity provisions shall not apply if the member requests that his or her accounts be separated.

(2) The "final average salary" shall be calculated by using the highest annual salaries regardless of the system under which the service was covered. Calculations shall be based on the procedures in use by each system concerned.

(3) Each system shall determine benefit payments on the basis of the final average salary and service credited in that system. Payments shall be made by each system in accordance with established procedures. If the normal age requirement has not been met, benefits shall be actuarially reduced.

(4) The member shall not be required to elect the same retirement option in both systems. Each annuity option shall apply only to the system for which it is elected.

(5) A member may elect to have each system treat his service credit in that system without regard to any other service credit, by requesting that his accounts be separated. If requested, "final average salary" shall be based on the salaries earned under each system separately.

Section 3.

(1) If a member qualifies for disability benefits based on service in the system in which he is currently a contributing member, he shall receive disability benefits from that system based on the formula used by that system and the other system(s) shall pay:

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

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

(2)

(a) If the combined service in two (2) or more systems is used to qualify a member for benefits, all systems under which the combined service would meet service requirements shall participate in benefit payments.

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

(c) The Teachers' Retirement System shall pay benefits during the eligibility period in proportion to the service in the Teachers' Retirement System as it relates to total combined service.

(d) After the expiration of the eligibility period, the benefit shall be recalculated on the basis of Teachers' Retirement System service without discount.

(3) If the combined service of a member meets service requirements in only one (1) system, that system shall only pay benefits under their disability formula and the other system shall pay benefits under subsection (1)(a) to (c) of this section.

(4) The medical requirements for disability benefits shall be those of the system to which the member is currently contributing, 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.

Section 4.

(1) An active member with Teachers' Retirement System service who has not qualified for Teachers' Retirement System service retirement at the time of death shall have death and survivor benefit coverage as follows:

(a) A Teachers' Retirement System member currently employed in a position covered by the Teachers' Retirement System shall have full coverage for benefits provided by KRS 161.520 and KRS 161.655 without regard to service in any other system;

(b) A Teachers' Retirement System member currently employed in a position covered by the County Employees Retirement System, the Kentucky Employees Retirement System, or the State Police Retirement System shall qualify for coverage in proportion to the service in the Teachers' Retirement System as it relates to total combined service;

(c) Service in any of the state retirement systems affected by this administrative regulation shall qualify as continued coverage under the Teachers' Retirement System if the member was covered at the termination of employment under the Teachers' Retirement System and did not withdraw his account with the Teachers' Retirement System. This coverage shall continue until the time the member became eligible for death or survivor benefits in the system under which he is currently employed.

(2) An active member with Teachers' Retirement System service who has qualified for service retirement at time of death shall have coverage for death and survivors benefits as follows:

(a) If the member had sufficient Teachers' Retirement System service to qualify for retirement on that service only, full benefits shall be payable to qualified survivors as provided in KRS 161.520, 161.525 and 161.655. The annuity portion shall be calculated as provided in KRS 21.420 and 61.680 and actuarially adjusted for age and sex of the eligible survivor.

(b) If the member qualified for retirement only on the basis of combined service, the benefits under KRS 161.520 and 161.655 shall be paid in the same proportion as the Teachers' Retirement System service was to total combined service. The annuity portion shall be calculated as provided in subsection (2)(a) of this section.

Section 5. A former member of the Teachers' Retirement System who has withdrawn his account and last service credit may reinstate his account and service credit with the Teachers' Retirement System if:

(1) The member is a contributing member of the County Employees Retirement System, the Kentucky Employees Retirement System, the State Police Retirement System, the Legislators' Retirement Plan, or the Judicial Retirement System with at least one (1) year of contributing service; and

(2) If Prior Service is involved, the member shall have one (1) or more years contributing service in the Teachers' Retirement System subsequent to July 1, 1941.

Section 6. A member having valid service credit in more than one (1) of the state retirement systems may elect to purchase retirement credit for active duty time in one (1) system or he may divide the service credit between two (2) systems. If service is to be divided the following additional requirements shall all be met:

(1) The total military service credit in all systems shall not exceed six (6) years.

(2) The same years active duty shall not be used in more than one (1) system.

(3) Each system shall calculate the costs of military retirement credit in accordance with the statutes and administrative regulations of that system.

Section 7.

(1) A Teachers' Retirement System member who has service credit in the Kentucky Employees Retirement System, County Employees Retirement System, State Police Retirement System, Legislators' Retirement Plan, or Judicial Retirement System shall have his total service in these retirement systems combined to determine eligibility for participation in the medical insurance program established by KRS 161.675.

(2) If a member is eligible for medical insurance benefits under KRS 161.675, the member may elect an insurance plan offered by any of the participating retirement systems in which the member has service credit.

(3) The cost of the member's medical insurance premium shall be prorated between the participating retirement systems based upon the member's service credit in each respective retirement system.

(4) The Teachers' Retirement System shall not pay a premium which exceeds the amount which the member is eligible to receive based upon the premium schedule in effect for each respective period of coverage.

(5) Spouses and eligible dependents may elect coverage if the member elects medical insurance coverage under the Teachers' Retirement System plan, except the retirement system shall not provide premium costs for spouses and eligible dependents if the member elects medical insurance coverage under the plan offered by any of the other participating retirement systems.

(6) Participation in the Teachers' Retirement System plan shall be limited to the period of coverage offered at the time of retirement or offered during subsequent periods of open enrollment.

(7) Reconciliation of prorated premium payments for medical insurance coverage between participating retirement systems shall be made not less than once during each fiscal year.

(8) The reciprocal provisions relating to medical insurance shall be retroactive to July 1, 1990.

History

RELATES TO: KRS 6.525, 16.537, 21.427, 61.552, 61.680, 78.605, 161.600, 161.608
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 6.525, 16.537, 21.427, 61.552, 61.680, 78.605, 161.600, and 161.608 set forth a broad program of reciprocity among the retirement systems administered under provisions of KRS Chapters 6, 16, 21, 61, 78, and 161. This administrative regulation defines the benefits to be provided and the administrative procedures to be followed in arriving at the appropriate payments to be made to eligible persons.
History: 102 KAR 001:185. 1 Ky.R. 590; eff. 4-9-1975; 3 Ky.R. 379; eff. 12-1-1976; 17 Ky.R. 2481; eff. 4-5-1991; 19 Ky.R. 1097; 1529; eff. 1-4-1993; 29 Ky.R. 2941; 30 Ky.R. 276; eff. 8-13-2003; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:195 Employer reports {#sec-102-kar-1-195 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:195}

Section 1. Employers shall submit a complete report of all member contributions to the Teachers' Retirement System at the close of each fiscal year. These reports must be received by the Teachers' Retirement System no later than August 1 of each year. The Teachers' Retirement System shall determine the information required in the reports.

Section 2. Employers shall provide to the Teachers' Retirement System, upon request, information relating to the dates that the members are paid and other information related to the payroll deduction of member contributions to the Teachers' Retirement System.

Section 3. The Teachers' Retirement System may require special reports of all member contributions to the system at the times it is deemed necessary and in the best interest of the system.

Section 4. School districts and education cooperatives shall provide to Teachers' Retirement System no later than August 1 of each year the following:

(1) The total accumulated sick leave days as of June 30 for all employees participating in Teachers' Retirement System in a covered position;

(2) A copy of all leave policies; and

(3) A copy of all salary schedules for which an employee participating in Teachers' Retirement System receives compensation and from which retirement contributions are withheld.

History

RELATES TO: KRS 161.560, 161.643.
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.560 provides that employers shall submit payroll reports, contribution lists, and other data as may be required by administrative regulation of the board of trustees. KRS 161.643 provides that employers shall submit an annual summary report of days employed, compensation paid, and other data as required by administrative regulation of the board of trustees. This administrative regulation sets out the procedures to be followed and data to be provided by employers in their reports to the Teachers' Retirement System.
History: 8 Ky.R. 784; eff. 3-1-1982; 17 Ky.R. 2483; eff. 4-5-1991; Crt eff. 7-3-2019; 51 Ky.R. 961; eff. 5-6-2025.

102 KAR 1:210 Submission of employer data {#sec-102-kar-1-210 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:210}

Section 1. Each employer shall advise the Teachers' Retirement System of the payroll dates that are applicable to all employees who are members of the Teachers' Retirement System. The employers shall be responsible for advising the Teachers' Retirement System of any changes in the payroll dates.

Section 2. In forwarding the member contributions, the employer shall certify that the submitted monies represent all contributions deducted for the applicable pay period.

Section 3. In the event that member contributions are not received by the Teachers' Retirement System within fifteen (15) days following a payroll period, the employer shall be charged interest at the rate of one (1) percent simple interest of the amount of the late contribution for each month or part of a month that the contributions are late. In no event shall the interest charge exceed twelve (12) percent during a twelve (12) month period. The employer shall pay the imposed penalty to the Teachers' Retirement System within thirty (30) days after notification of the infraction.

Section 4. The employment contract, payroll and retirement contribution records of members shall be made available to representatives of the Teachers' Retirement System by the employer at any time during regular working hours.

Section 5. The Teachers' Retirement System may require from the employer payroll reports, contribution lists and other pertinent data that are necessary to identify member retirement contributions. The required information shall be on forms furnished or approved by the system.

History

RELATES TO: KRS 161.560
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.560 requires the Teachers' Retirement System to impose an interest penalty at an annual rate not to exceed twelve (12) percent per year on employers who do not remit member contributions within fifteen (15) days following each payroll period. This administrative regulation establishes guidelines for submission of payroll reports, contribution lists, other data from employers, and imposition of the interest penalty.
History: 102 KAR 001:210. 9 Ky.R. 284; 400; eff. 9-8-1982; 17 Ky.R. 2484; eff. 4-5-1991; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:220 Final average salary based on average of three (3) highest salaries {#sec-102-kar-1-220 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:220}

Section 1. A member who is at least fifty-five (55) years of age and has at least twenty-seven (27) years of Kentucky service credit shall be eligible to have the member's retirement annuity calculated with a final average salary based upon an average of the member's three (3) highest salaries only if the member meets:

(1) The age and service requirements at the time of the member's initial retirement; or

(2) The conditions established in Section 2 of this administrative regulation.

Section 2. A member who returns to work under KRS 161.603 and who earns service credit as a result of the member's return to work that, when added to the member's preretirement service credit, equals or exceeds the service credit the member would have had at age fifty-five (55) had there been no break in service due to retirement, shall be entitled to a calculation of retirement annuities with a final average salary based on the three (3) highest average salaries.

History

RELATES TO: KRS 161.220(9)
STATUTORY AUTHORITY: KRS 161.220(9), 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.220(9) authorizes the Board of Trustees of the Teachers' Retirement System to approve for calculation of retirement annuities a final average salary based upon an average of the three (3) highest salaries for those members who are at least fifty-five (55) years of age and have at least twenty-seven (27) years of Kentucky service credit. This administrative regulation establishes the Board of Trustees' approval for the application of the three (3) highest salaries in the calculation of retirement annuities.
History: 102 KAR 001:220. 27 Ky.R. 1112; eff. 12-21-2000; 3320; 28 Ky.R. 349; eff. 8-15-2001; 30 Ky.R. 1331; eff. 1-23-2004; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:225 General compliance with federal tax laws {#sec-102-kar-1-225 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:225}

Section 1. Compliance with 26 U.S.C. 401(a)(7) and (8) for Vesting and Forfeitures.

(1) A plan member shall be 100 percent vested in the member's accumulated contributions at all times.

(2)

(a) In conformity with 26 U.S.C. 401(a)(8), a forfeiture of benefits by a member or former member of the plan shall not be used to pay benefit increases.

(b) Forfeitures shall be used to reduce employer contributions.

(3) Upon termination or partial termination of the Kentucky Teachers' Retirement System, or the complete discontinuance of contributions, a member shall have a nonforfeitable interest in his accrued benefit to the extent funded.

(4) In order to comply with Internal Revenue Service interpretations, subject to the provisions of KRS 161.470, a member shall have a nonforfeitable interest in his accrued benefit at attainment of age sixty (60) with the completion of five (5) years of service.

(5) Subject to the provisions of KRS 161.470, a member who completes at least five (5) years of service and terminates employment shall be vested in his accrued benefit and shall be entitled to that benefit upon the attainment of normal retirement age, which is age sixty (60), unless the member withdraws his accumulated contributions.

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 applicable requirements of 26 U.S.C. 414(p) shall be followed by the retirement system.

Section 3. Compliance with 26 U.S.C. 414(u) for Reemployed Veterans.

(1) Effective December 12, 1994, Contributions, benefits, and service credit with respect to qualified military service shall be governed by 26 U.S.C. 414(u) and the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. 4301 – 4335.

(2) Effective with respect to deaths occurring on or after January 1, 2007, while a member is performing qualifying military service, as defined in 38 U.S.C. Chapter 43 to the extent required by section 26 U.S.C. 401(a)(37) of the Internal Revenue Code, survivors of a member of the Kentucky Teachers' Retirement System shall be entitled to any additional benefits that the system would provide if the member had resumed employment and then died, such as accelerated vesting or survivor benefits that are contingent on the member's death while employed.

(3) Beginning January 1, 2009, to the extent permitted by 26 U.S.C. 3401(h) and 414(u)(2) of the Internal Revenue Code, an individual receiving differential wage payments (while the individual is performing qualified military service, as defined in 38 U.S.C. Chapter 43) from an employer shall be treated as employed by that employer and the differential wage payment shall be treated as annual compensation. 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. 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 Teachers' Retirement System shall comply with 26 U.S.C. 401(a)(25) to determine the amount of any benefit that is determined on the basis of actuarial assumptions using assumptions adopted by the board by resolution for specific benefit calculation purposes.

(2) These benefits shall not be subject to employer discretion.

History

RELATES TO: KRS 161.716, 161.600, 161.470, 26 C.F.R., 26 C.F.R. 401(a)(7),(8), (25), 26 U.S.C. 414(d), (p), (u), 26 U.S.C. 401(a), 414(d), 414(p), 414(u), 503(b), 3401(h), 38 U.S.C. 4301-4335
STATUTORY AUTHORITY: KRS 161.310(1), 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.716 requires the board of trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of the members of the retirement system. Kentucky Teachers' Retirement System shall administer the Retirement System as a qualified defined benefit plan pursuant to 26 U.S.C. 401(a) and 26 U.S.C. 414(d) of the Internal Revenue Code, 26 U.S.C., 26 C.F.R., and such other Internal Revenue Code Sections as applicable. This administrative regulation establishes Kentucky Teachers' Retirement System's compliance with 26 U.S.C. 401(a) and 503(b) in order for the Kentucky Teachers' Retirement System to maintain its tax qualified status as a public defined benefit plan. This administrative regulation also includes provisions intended to comply with the Heroes Earnings Assistance and Relief Tax Act of 2008, "HEART Act". This administrative regulation adds provisions that have been required as part of the determination letter process regarding vested benefits.
History: 102 KAR 001:225. 35 Ky.R. 1943; 2403; eff. 6-5-2009; 36 Ky.R. 1967; eff. 6-4-2010; 37 Ky.R. 1322; 1964; eff. 3-1-2011; 39 Ky.R. 1050; 1371; eff. 2-1-2013; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:230 Limitations on benefits {#sec-102-kar-1-230 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:230}

Section 1. Definitions.

(1) "415(b) limit" means the limitation on benefits established by 26 U.S.C. 415(b).

(2) "415(c) limit" means the limitation on annual additions established by 26 U.S.C. 415(c).

(3) "Annual benefit" means, for purposes of the 415(b) limit, a benefit payable annually in the form of a straight life annuity (without ancillary benefits) without regard to the benefit attributable to after-tax employee contributions (except pursuant to 26 U.S.C. 415(n)) and to rollover contributions (as defined in 26 U.S.C. 415(b)(2)(A)). The "benefit attributable" is determined in accordance with 26 C.F.R. 1.415(b).

(4) "Defined benefit dollar limitation" means $160,000, as adjusted, effective January 1 each year, in the manner established by the Secretary of the United States Treasury pursuant to 26 U.S.C. 415(d), and payable in the form of a straight life annuity. A limitation as adjusted under 26 U.S.C. 415(d) applies to limitation years for which the adjustment applies.

(5) "Limitation year" means the calendar year.

(6) "Nonqualified service credit" means, effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, permissive service credit other than that allowed with respect to:

(a) Service as an employee of the Government of the United States or any state, agency, or political subdivision thereof (other than military service or service for credit that was obtained as a result of a repayment described in 26 U.S.C. 415(k)(3);

(b) Service as an employee, other than as an employee described in paragraph (a) of this subsection, of an education organization described in 26 U.S.C. 170(b)(1)(A)(ii) that is a public, private, or sectarian school that provides elementary education or secondary education through grade twelve (12), or a comparable level of education as determined pursuant to the applicable law of the jurisdiction in which the service was performed;

(d) Military service, other than qualified military service pursuant to 26 U.S.C. 414(u), recognized by the retirement system.

Section 2. Adjustments and Limitations.

(1) If the member has fewer than ten (10) years participation in the plan, the defined benefit dollar limitation shall be multiplied by a fraction.

(a) The numerator shall be the number of years (or part thereof) of participation in the plan, and the denominator shall be ten (10).

(b) The reduction established in this subsection shall not apply to preretirement death and disability benefits.

(2) If the benefit of a member begins prior to age sixty-two (62), and because the plan provides an immediately commencing straight life annuity payable both at age sixty-two (62) and the age of benefit commencement, the defined benefit dollar limitation shall be the lesser of paragraph (a) or (b) of this subsection:

(a) The actuarial equivalent (at the earlier age) of the defined benefit dollar limitation (adjusted pursuant to subsection (1) of this section if necessary), with actuarial equivalence computed using a five (5) percent interest rate and the applicable mortality table for the annuity starting date as specified by the system actuary (and expressing the member's age in completed calendar months as of the annuity starting date); or

(b) The defined benefit dollar limitation (adjusted pursuant to subsection (1) of this section if necessary) multiplied by a ratio of the annual amount of the immediately commencing straight life annuity pursuant to the plan at the member's annuity starting date to the annual amount of the immediately commencing straight life annuity pursuant to the plan at age sixty-two (62), both determined without applying the 415(b) limit.

Any decrease in the defined benefit dollar limitation determined in accordance with this subsection shall not reflect a mortality decrement if benefits are not forfeited upon the death of the member.
If any benefits are forfeited upon death, the full mortality decrement shall be taken into account.

(3) The reductions provided for in subsection (2) of this section shall not apply to preretirement disability benefits or preretirement death benefits.

(4) If the benefit of a member begins after the member attains age sixty-five (65), and because the plan provides an immediately commencing straight life annuity payable both at age sixty-five (65) and the age of benefit commencement, the defined benefit dollar limitation shall be the lesser of paragraph (a) or (b) of this subsection:

(a) The actuarial equivalent (at the later age) of the defined benefit dollar limitation (adjusted pursuant to subsection (1) of this section if necessary), with actuarial equivalence computed using a five (5) percent interest rate assumption and the mortality table specified by the system actuary (and expressing the member's age based on completed calendar months as of the annuity starting date); or

(b) The defined benefit dollar limitation (adjusted pursuant to subsection (1) of this section if necessary), multiplied by the ratio of the annual amount of the adjusted immediately commencing straight life annuity pursuant to the plan at the member's annuity starting date to the annual amount of the adjusted immediately commencing straight life annuity pursuant to the plan at age sixty-five (65), both determined without applying the 415(b) limit. For this purpose, the adjusted immediately commencing straight life annuity pursuant to the plan at the member's annuity starting date shall be the annual amount of such annuity payable to the member, computed disregarding the member's accruals after age sixty-five (65) but including actuarial adjustments even if those actuarial adjustments are used to offset accruals, and the adjusted immediately commencing straight life annuity pursuant to the plan at age sixty-five (65) shall be the annual amount of the annuity that would be payable pursuant to the plan to a hypothetical member who is age sixty-five (65) and has the same accrued benefit as the member.

(5) If the benefit pursuant to the retirement system is other than an annual benefit, 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).

(6) 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 (5) 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 determined using the assumptions established in 26 C.F.R. 1.415(b)-1(c)(2)(ii) that takes into account the additional benefits pursuant to 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 that is the "lesser of", if adjusted in accordance with the assumptions established in paragraph (a) or (b) of this subsection):

(a) The annual amount of the straight life annuity (if any) payable to the member pursuant to the retirement system commencing at the same annuity starting date as the form of benefit to the member; or

(b)

The annual amount of the straight life annuity commencing at 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 interest assumption (or the applicable statutory interest assumption) and:

a. For limitation years prior to January 1, 2009, the applicable mortality tables described in 26 C.F.R. 1.417(e)-1(d)(2); and

b. For limitation years after December 31, 2008, the applicable mortality tables described in 26 U.S.C. 417(e)(3)(B).

(7) Effective on and after January 1, 2009, for purposes of applying the 415(b) limit to a member:

(a) A member's applicable 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; and

(b)

To the extent that the member's annual benefit equals or exceeds the 415(b) limit, the member shall no longer be eligible for cost of living increases until the benefit plus the accumulated increases are less than the 415(b) limit;
In any subsequent limitation year, a member's annual benefit, including any automatic cost of living increases, shall be tested pursuant to the then applicable 415(b) limit including any adjustment to the 26 U.S.C. 415(b)(1)(A) dollar limit pursuant to 26 U.S.C. 415(d) and 26 C.F.R. 1.415(b).

Section 3. Participation in Other Qualified Plans: Aggregation of Limits.

(1) The 415(b) limit with respect to any member who has ever 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 retirement system shall apply as if the total benefits payable from all these defined benefit plans in which the member has been a member were payable from one (1) plan.

(2) The 415(c) limit with respect to any member who has ever been a member in any other defined contribution plan as defined in 26 U.S.C. 414(i) maintained by the member's employer in a retirement system shall apply as if the total annual additions under all these defined contribution plans in which the member has been a member were payable from one (1) plan.

Section 4. Effect on Members.

(1) Benefit increases resulting from the increase in the limitations of 26 U.S.C. 415(b) shall be provided to all current and former members, with benefits limited by 26 U.S.C. 415(b), who have an accrued benefit pursuant to the plan immediately prior to the effective date.

(2) These benefit increases shall not be provided to current and former members who have an accrued benefit resulting from a benefit increase solely as a result of the increases in limitations pursuant to 26 U.S.C. 415(b).

Section 5. Benefits Not Taken into Account for 415(b) Limit. The benefits established in this section shall not be taken into account in applying these limits:

(1) Any ancillary benefit that is not directly related to retirement income benefits; and

(2) That portion of any joint and survivor annuity that constitutes a qualified joint and survivor annuity.

Section 6. 415(c) Limit. Except as provided in Section 7 of this administrative regulation, 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)

(a) Annual additions shall be defined to mean the sum (for any year) of employer contributions to a defined contribution plan, post-tax member contributions, and forfeitures credited to a member's individual account.

(b) Member contributions shall be determined without regard to rollover contributions and to picked-up employee contributions that are paid to a defined benefit plan.

(2) For purposes of applying the 415(c) limits only, the definition of compensation, if applicable, shall be compensation actually paid or made available during a limitation year, except as noted in subsection (3) of this section and as permitted by 26 C.F.R. 1.415(c)-2, except, that member contributions picked up pursuant to 26 U.S.C. 414(h), shall not be treated as compensation.

(3) Unless another description of compensation that is permitted by 26 C.F.R. 1.415(c)-2 is specified by a retirement system, compensation shall be described as wages within the meaning of 26 U.S.C. 3401(a) and all other payments of compensation to an employee by an employer for which the employer is required to furnish the employee a written statement pursuant to 26 U.S.C. 6041(d), 6051(a)(3) and 6052 and shall be determined without regard to any rules pursuant to 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 (such as the exception for agricultural labor in 26 U.S.C. 3401(a)(2)).

(a)

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 pursuant to 26 U.S.C. 125(a), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).
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).

(b) For limitation years beginning on and after January 1, 2009, compensation for the limitation year 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:

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, such as overtime or shift differential; or

c. Commissions, bonuses, or other similar payments; and

Absent a severance from employment, the payments would have been paid to the employee while the employee continued in employment with unused accrued bona fide sick, vacation, or other leave that the employee would have been able to use if employment had continued.

(c) Back pay, within the meaning of 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 pursuant to this description.

(d) If the annual additions for any member for a plan year exceed the 415(c) limit, the excess annual addition shall be corrected as permitted pursuant to the Employee Plans Compliance Resolution System (or similar IRS correction program).

Section 7. Service Purchases Pursuant to 26 U.S.C. 415(n).

(1) Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, if a member makes one (1) or more contributions to purchase permissive service credit in a retirement system, then the requirements of 26 U.S.C. 415(n) shall be treated as met only if:

(a) The requirements of 26 U.S.C. 415(b) are met, determined by treating the accrued benefit derived from all these contributions as an annual benefit for purposes of the 415(b) limit; or

(b) The requirements of 26 U.S.C. 415(c) are met, determined by treating all these contributions as annual additions for purposes of the 415(c) limit.

(2) For purposes of applying this section, a retirement system shall not fail to meet the reduced limit pursuant to 26 U.S.C. 415(b)(2)(C) solely by reason of this section and shall not fail to meet the percentage limitation pursuant to 26 U.S.C. 415(c)(1)(B) solely by reason of this section.

(3)

(a) Permissive service credit shall consist of service credit:

Recognized by a retirement system for purposes of calculating a member's benefit in a retirement system;
The member has not received in a retirement system; and
That the member may receive only by making a voluntary additional contribution, in an amount determined pursuant to a retirement system, which does not exceed the amount necessary to fund the benefit attributable to the service credit.

(b) Effective for permissive service credit contributions made in limitation years beginning after December 31, 1997, the term 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 in order to provide an increased benefit for service credit that a member is receiving in a retirement system.

(4) The retirement system 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 subparagraph; or

(b) Any nonqualified service credit is taken into account pursuant to this section before the member has at least five (5) years of participation in a retirement system.

(5) In the case of service described in Section 1(7)(a), (b), or (c) of this administrative regulation, the service shall be nonqualified service if recognition of the service would cause a member to receive a retirement benefit for the same service from more than one (1) plan.

(6) In the case of a trustee-to-trustee transfer after December 31, 2001, to which 26 U.S.C. 403(b)(13)(A) or 26 U.S.C. 457(e)(17)(A) applies, without regard to if the transfer is made between plans maintained by the same employer:

(a) The limitations of subsection (4) of this section shall not apply in determining if the transfer is for the purchase of permissive service credit; and

(b) The distribution rules applicable pursuant to federal law to a retirement system shall apply to these amounts and any benefits attributable to these amounts.

(7)

(a) For an eligible member, the 415(c) limit shall not be applied to reduce the amount of permissive service credit that may be purchased to an amount less than the amount that was allowed to be purchased pursuant to the terms of the retirement system as in effect on August 5, 1997.

(b) For purposes of this subsection, an eligible member shall be an individual who first became a member in the retirement system before January 1, 1998.

Section 8. Modification of Contributions for 26 U.S.C. 415(c) and 415(n) Purposes. The retirement system may modify a request by a member to make a contribution to a retirement system if the amount of the contribution would exceed the limits established in 26 U.S.C. 415 by using the following methods:

(1) If the law requires a lump sum payment for the purchase of service credit, the retirement system may establish a periodic payment plan for the member to avoid a contribution in excess of the limits established in 26 U.S.C. 415(c) or 415(n).

(2) If payment pursuant to section (1) of this subsection shall not avoid a contribution in excess of the limits established in 26 U.S.C. 415(c) or 415(n), the retirement system shall either reduce the member's contribution to an amount within the limits of those sections or refuse the member's contribution.

Section 9. Repayments of Cashouts. Any repayment of contributions, including interest thereon, to the retirement system with respect to an amount previously refunded upon a forfeiture of service credit under the retirement system or another governmental plan maintained by the Commonwealth or a local government within the Commonwealth shall not be taken into account for purposes of the 415(b) or (c) limits.

History

RELATES TO: KRS 161.611, 26 C.F.R. 1.415, 26 U.S.C. 125, 132(f)(4), 402, 414, 415, 417, 457, 3401, 6041, 6051, 6052
STATUTORY AUTHORITY: KRS 161.310 (1), 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.716 requires the board of trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of members of the retirement system. This administrative regulation establishes the limitations on benefits required by 26 U.S.C. 415.
History: 102 KAR 001:230. 28 Ky.R. 2113; 2324; eff. 5-16-2002; 35 Ky.R. 1822; 2406; eff. 6-5-2009; 37 Ky.R. 1327; 1968; eff. 3-1-2011; 39 Ky.R. 1749; 1995; eff. 5-3-2013; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:240 Increase in compensation limit {#sec-102-kar-1-240 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:240}

Section 1. Definition. "Annual compensation" is defined by KRS 161.220(10).

Section 2. Increase in Limit. The annual compensation of each member taken into account in determining benefit accruals in any plan year beginning after December 31, 2001, shall not exceed $200,000.

(1) For purposes of determining benefit accruals in a plan year beginning after December 31, 2001, compensation for any prior determination period shall be limited as provided in Section 3 of this administrative regulation.

(2) If the determination period consists of fewer than twelve (12) months, the annual compensation limit shall be an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which shall be the number of months in the short determination period, and the denominator of which shall be twelve (12).

(3) 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 the prior determination period shall be subject to the applicable annual compensation limit in effect for that prior period.

Section 3. Cost-of-living Adjustment.

(1) The $200,000 limit on annual compensation in Section 2 of this administrative regulation shall be adjusted for cost-of-living increases in accordance with 26 U.S.C. 401(a)(17)(B).

(2) 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.

Section 4. In determining benefit accruals in plan years beginning after December 31, 2001, the annual compensation limit in Section 2 of this administrative regulation shall be:

(1) $150,000 for any determination period beginning in 1996 or earlier for members who became participants on or after July 1, 1996;

(2) $160,000 for any determination period beginning in 1997, 1998, or 1999 for members who became participants on or after July 1, 1996;

(3) $170,000 for any determination period beginning in 2000 or 2001 for members who became participants on or after July 1, 1996; or

(4) Effective only for the 1996 plan year, In determining the compensation of an employee eligible for consideration pursuant to this provision, 26 U.S.C. 414(g)(6) shall apply, except that the term, "family", shall include only the spouse of the member and any lineal descendant of the employee who has not attained age nineteen (19) before the close of the year.

Section 5. The annual compensation on which contributions are reported shall not exceed the maximum annual compensation limit as established in Sections 2 through 4 of this administrative regulation.

(1) The retirement system shall notify employers of the maximum annual compensation limit.

(2) Each employer shall report contributions on all annual compensation up to the maximum annual limit.

(3) Once an employee's annual compensation has reached the maximum annual limit, the employer shall continue to report the employee's creditable compensation but shall not report any further employer or employee contributions on the employee's annual compensation.

(4) If excess contributions are erroneously reported, the retirement system shall refund the excess contributions to the employer for distribution to the employee after making payroll deductions in accordance with federal and state law.

Section 6. A member who became a participant prior to July 1, 1996, shall be an eligible participant for purposes of 26 C.F.R.

History

RELATES TO: KRS 161.220(10), 26 C.F.R. 1.401(a)(17)-1(d)(4)(ii), 26 U.S.C. 401(a)(17)
STATUTORY AUTHORITY: KRS 161.310(1), 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.716 requires the board of trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of members of the retirement system. This administrative regulation establishes the increase in compensation limit as provided by 26 U.S.C. 401(a)(17)(A).
History: 102 KAR 001:240. 28 Ky.R. 2113; 2324; eff. 5-16-2002; 35 Ky.R. 1822; 2406; eff. 6-5-2009; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:245 Rollovers and transfers of contributions to other plans {#sec-102-kar-1-245 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:245}

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) A 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 expectancy of the distributee and the distributee's designated beneficiary; or

(2) Any distribution to the extent that the distribution shall be required pursuant to 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; or

(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. This portion may be transferred:

(a) Only to:

An individual retirement account or annuity described in 26 U.S.C. 408(a) or (b);
A qualified defined contribution plan described in 26 U.S.C. 401(a);
On or after January 1, 2007, to a qualified defined benefit plan described in 26 U.S.C. 401(a); or
An annuity contract described in 26 U.S.C. 403(b); and

(b) To an account or plan provided for in paragraph (1)2. through 4. of this subsection that agrees to separately account for amounts so transferred, and earnings on those amounts, including separately accounting for the portion of the distribution:

That is includable in gross income; and
That is not so includable.

(2) Effective January 1, 2002, the 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);

(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:

The employee's or former employee's surviving spouse; and
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).

A nonspouse beneficiary shall 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.

Section 3. In accordance with section 401(a)(31) of the Internal Revenue Code, a distributee may elect, at any time and in the manner prescribed in this administrative regulation, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

History

RELATES TO: KRS 161.220 -161.990, 26 U.S.C. 401(a), 402(c), 403(a), (b), 408, 408A, 414(p), 457(b)
STATUTORY AUTHORITY: KRS 161.310(1), 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.716 requires the board of trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of the members of the retirement system. 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: 102 KAR 001:245. 35 Ky.R. 1945; 2407; eff. 6-5-2009; 37 Ky.R. 1327; 1968; eff. 3-1-2011; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:250 Rollovers from other plans {#sec-102-kar-1-250 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:250}

Section 1.

(1) Kentucky Teachers' Retirement System shall accept member rollover contributions and direct rollovers of distributions to purchase service credit as authorized under KRS 161.220 to 161.990.

(2) The system shall accept a direct rollover of an eligible rollover distribution from:

(a) A qualified plan described in 26 USC 401(a), 401(k), or 403(a) of the Internal Revenue Code;

(b) An annuity contract described in 26 USC 403(b) of the code; or

(c) An eligible plan under 26 USC 457(b) of the code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.

(3) The system shall accept the contribution of an eligible rollover distribution from:

(a) A qualified plan described in 26 USC 401(a), 401(k), or 403(a) of the Internal Revenue Code;

(b) An annuity contract described in 26 USC 403(b) of the code; or

(c) An eligible plan under 26 USC 457(b) of the code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.

(4) The system shall accept a member rollover contribution of the portion of a distribution from an individual retirement account or annuity described in 26 USC 408(a) or 408(b) of the code that is eligible to be rolled over and otherwise would be includible in gross income.

Section 2. Rollovers from other plans shall be accepted effective January 1, 2002.

History

RELATES TO: 26 U.S.C. 402(c)(8)(B), 403(b)(8)(A), 408(d)(3)(A), 457(e)(16)(A)
STATUTORY AUTHORITY: KRS 161.310, 161.716
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the state of Kentucky to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.716 requires the Board of Trustees to promulgate administrative regulations as are necessary to remove any conflicts with federal laws and to protect the interests of the members and survivors of members of the retirement system. This administrative regulation establishes the types of rollovers from other plans that may be accepted by the retirement system as approved by the Internal Revenue Code, 26 USC 1 to 9833.
History: 102 KAR 001:250. 28 Ky.R. 2114; 2325; eff. 5-16-2002; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:270 Statement of member account {#sec-102-kar-1-270 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:270}

Section 1. Each member shall be provided with a statement of his or her account. Each member's statement shall contain the following information if applicable:

(1) Date of birth;

(2) Member identification;

(3) Total service credit accrued or purchased; and

(4) Total member contribution and interest accumulation.

Section 2. Each member shall be provided on at least an annual basis a statement of his or her account. This statement shall be provided to the member by mail delivery or by secure electronic means. Additionally, letters reflecting account status shall be mailed to inactive members with vested benefits who request a refund of their accumulated contributions and interest. In addition to the information listed in Section 1 of this administrative regulation, the letter shall inform the member that refunding the account shall result in the member forfeiting a retirement benefit to which the member would otherwise be entitled. Letters shall be mailed to each member's last known home address prior to payment of a refund of contributions.

History

RELATES TO: KRS 161.580
STATUTORY AUTHORITY: KRS 161.310(1)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the Board of Trustees of the Kentucky Teachers' Retirement System to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. This administrative regulation establishes standards for the content and procedures for the distribution of statements of members' accounts.
History: 102 KAR 001:270. 28 Ky.R. 2751; eff. 8-12-2002; 40 Ky.R. 2320; 2675; eff. 7-7-2014; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:280 Service credit required for member to qualify for three (3) percent retirement factor {#sec-102-kar-1-280 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:280}

Section 1. The three (3) percent retirement factor, subject to the conditions established in Sections 2 through 5 of this administrative regulation, shall be approved for any member who has accredited to his or her account with the Teachers' Retirement System of the State of Kentucky a minimum of five (5) years of service credit for either time actually served in a position covered by the Teachers' Retirement System of the State of Kentucky from which contributions were made under KRS 161.540 and 161.550, or service credit purchased under KRS 161.470(2), 161.545, 102 KAR 1:036, or 102 KAR 1:038. Service credit purchases, except as provided in this section, shall not be considered in determining whether the member has accumulated the minimum five (5) years of service credit.

Section 2. The three (3) percent retirement factor shall be applied only to service accredited to a member's account as a result of either time actually served in a position covered by the Teachers' Retirement System of the state of Kentucky from which contributions were made under KRS 161.540 and 161.550, or service credit purchased under KRS 161.545, 102 KAR 1:036, or 102 KAR 1:038, for years or fractional years of service that occur after the member has accumulated thirty (30) years of service credit as calculated under Section 3 of this administrative regulation. Service credit purchases, other than as provided in this section, shall not be subject to the application of the three (3) percent retirement factor. Notwithstanding any regulatory provision to the contrary, service credit earned as a result of employment in a position subject to Social Security shall not be subject to the application of the three (3) percent retirement factor.

Section 3. The service credit listed in subsections (1), (2), (3), and (4) of this section shall be considered, in the chronological order in which it was earned, for the purpose of calculating whether a member has accumulated thirty (30) years of service credit as a prerequisite to qualifying for the three (3) percent retirement factor, but shall not be subject to application of the three (3) percent retirement factor. Both full years and fractional years of service credit listed in subsections (1), (2), (3), and (4) of this section shall be considered. Other service credit shall not be considered for this purpose.

(1) The first thirty (30) or less years of service earned by the member as a result of either time actually served in a position covered by the Teachers' Retirement System of the State of Kentucky from which contributions were made under KRS 161.540 and 161.550, or service credit purchased under KRS 161.470(2), 161.545, 102 KAR 1:036, or 102 KAR 1:038, excluding service credit purchases other than as provided by this section.

(2) Service rendered in the uniformed services of the Armed Forces of the United States, including the commissioned corps of the Public Health Service, the United States Military Reserves and the Kentucky National Guard, purchased by the member under KRS 161.507, subject to preemption by the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994.

(3) Service credit purchased under KRS 161.515 as a result of out-of-state teaching and peace corps service, under KRS 161.547 as a result of legislative service, under KRS 161.548 as a result of regional community mental health and mental retardation service program service, and under KRS 161.549 as a result of federal head start agency service.

(4) Service credit in the Legislators' Retirement Plan, State Police Retirement System, Kentucky Employees Retirement System, and County Employees Retirement System that is earned as a result of contributions deducted from the member's salary while employed in a position covered by one (1) of these state administered retirement systems and that is recognized pursuant to the provisions of KRS 161.600(3). Service credit purchases under any one (1) of these state administered retirement systems shall not be considered, except as follows:

(a) The purchase of military service, including the commissioned corps of the Public Health Service, the United States Military Reserves and the Kentucky National Guard, that is credited to the member's account by each respective state administered retirement system shall be considered to the extent that this service, added to the service described in subsection (2) of this section, does not exceed six (6) years.

(b) The purchase of service credit in another state administered retirement system to the extent that it represents services provided and time actually served in a position of employment under a federal, state, or local government agency.

Section 4. Under no circumstances and notwithstanding any regulatory provision to the contrary, accrued sick and vacation leave, service credit that has previously been used in calculating and providing a retirement allowance in any publicly funded retirement system, excluding Social Security retirement allowances, and nonqualified service as described in KRS 161.5465 and 61.552(26), shall not be used or considered in any manner to qualify or otherwise entitle a member to the three (3) percent retirement factor for any year or fraction of a year, shall not be used or considered in any manner in calculating whether the member has accumulated thirty (30) years as a prerequisite to qualifying for the three (3) percent retirement factor, and shall not be used or considered in any manner in calculating whether the member has accumulated the threshold five (5) years of service credit described in Section 1 of this administrative regulation.

Section 5. The provisions of this administrative regulation shall apply only to those persons who initially retire with an effective retirement date of July 1, 2004 or later.

History

RELATES TO: KRS 161.620
STATUTORY AUTHORITY: KRS 161.310, 161.620
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.620 authorizes the Board of Trustees to approve a three (3) percent retirement factor for years or fractional years of service in excess of thirty (30) years and establish conditions of eligibility regarding the type of service credit required for a member to qualify for this three (3) percent retirement factor.
History: 102 KAR 001:280. 29 Ky.R. 1710; 2086; eff. 2-3-2003; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:290 Disability retirement application, review, and examinations {#sec-102-kar-1-290 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:290}

Section 1. To qualify for disability retirement, a member shall meet the requirements set forth in KRS 161.661(1) and (9) or KRS 161.663. A member who requests an application shall be given a copy of:

(1) Disability Retirement Information You Should Know;

(2) Disability New Retiree Health Insurance Information for Plan Year 2016; and

(3) Wage Bracket Method Tables for Income Tax Withholding.

Section 2. Administrative Provisions.

(1) An application for disability retirement shall be filed on the Application for Disability Retirement (application) and shall include:

(a) A photocopy of the member's certified birth certificate;

(b) A photocopy of the member's signed Social Security card;

(d) If applicable, a photocopy of the member's certified marriage certificate;

(e) A photocopy of the primary beneficiary's certified birth certificate; and

(f) A photocopy of the primary beneficiary's signed Social Security card.

(2) The Report of Physician and supporting documentation regarding the member's physical or mental condition shall be submitted with the application.

(3) TRS shall submit the application, Applicant Statement of Disability, Report of Physician, and supporting documentation to the medical review committee for evaluation and written disposition as required by KRS 161.661(14).

(4) If the application is approved, payment of disability benefits shall be effective on the applicable date set forth in KRS 161.661(11).

Section 3. A member's receipt of disability benefits shall be subject to the restrictions set forth in KRS 161.661(12).

Section 4. A member retired by reason of disability shall undergo examinations on an annual basis to determine whether the member's disability retirement allowance shall be continued, except that, on the recommendation of the medical review committee, a member's examinations may be less frequent, but not less than once every five (5) years.

Section 5. If either of the conditions in KRS 161.661(16) is met, a member may seek reinstatement of disability benefits by filing an application as required in Section 2 of this administrative regulation. Application shall be made within the time frame set forth in KRS 161.661(16).

Section 6. Incorporation by reference.

(1) The following material is incorporated by reference:

(a) "Application for Disability Retirement", July 2016;

(b) "Applicant Statement of Disability", D-1, July 2016;

(d) "Report of Physician", D-3, July 2016;

(e) "Disability New Retiree Health Insurance Information for Plan Year 2016", 2016; and

(f) "Wage Bracket Method Tables for Income Tax Withholding", 2016.

History

RELATES TO: KRS 161.661, 161.663
STATUTORY AUTHORITY: KRS 161.310, 161.661(14)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.661(14) authorizes the board to promulgate administrative regulations regarding procedures for a medical review committee to follow when reviewing applications for disability retirement. KRS 161.661(10) provides that members retired by reason of disability shall undergo periodic examinations at the discretion of the board of trustees to determine whether the disability retirement allowance shall be continued. This administrative regulation establishes guidelines for filing an application for disability retirement and the required periodic examinations.
History: 102 KAR 001:290. 29 Ky.R. 2998; eff. 8-13-2003; 43 Ky.R. 260, 530; eff. 11-4-2016; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:300 Kentucky Teachers' Retirement System Trustees Education Program {#sec-102-kar-1-300 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:300}

Section 1. Incorporation by Reference.

(1) The "Kentucky Teachers' Retirement System Trustees Education Program", adopted November 17, 2008, is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Teachers' Retirement System, 479 Versailles Road, Frankfort, Kentucky, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 161.250(3)(c)
STATUTORY AUTHORITY: KRS 161.250(3)(c) and KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of Kentucky Teachers' Retirement Systems to promulgate all administrative regulations necessary or proper for the administration of the funds of the retirement system and for the transaction of business. KRS 161.250(3)(c) provides that the board 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 Teachers' Retirement System Trustees Education Program."
History: 102 KAR 001:300. 35 Ky.R. 1946; eff. 4-3-2009; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:310 Benefit eligibility conditions for members providing part-time and substitute services {#sec-102-kar-1-310 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:310}

Section 1. A member who provides part-time or substitute teaching services and who has never been an annuitant of the retirement system shall be eligible to apply for disability retirement benefits provided pursuant to KRS 161.661 and 161.663, and his or her beneficiary and any survivor eligible to apply for life insurance benefits provided pursuant to KRS 161.655 and survivor benefits provided pursuant to KRS 161.520, only if the member meets the eligibility conditions established in this section.

(1) The member shall have completed at least sixty-nine (69) percent of a full contract year that would be completed by a member employed on a full-time basis in the same position in order to become eligible to apply for disability retirement, and for his or her beneficiary or any survivor to be eligible to apply for life insurance and survivor benefits. Employment shall be in a position from which contributions were made to Kentucky Teachers' Retirement System.

(2) If the position does not provide for full-time employment, the member shall be required to complete at least sixty-nine (69) percent of the normal school calendar for a certified, full-time teacher in the school district in which the member is employed. Full-time employment shall not require less than the normal school calendar for a certified, full-time teacher in the district in which the member is employed.

(3) The member shall be accredited days by adding his or her total number of hours worked in one (1) fiscal year and dividing that number by the number of hours that are required pursuant to a normal, full-time contract to calculate the number of full-time days. If this calculation results in a fractional number of days, the number shall be rounded down to the next whole number of days.

(4) A member who is employed in more than one (1) school district in the same fiscal year shall be required to complete a number of days at least equal to sixty-nine (69) percent of the school calendar in the district requiring the greatest number of days.

(5) Once the requisite number of days or equivalent days are worked for one (1) fiscal year, the member shall be eligible to apply for disability retirement, and his or her beneficiary and any survivor shall be eligible to apply for life insurance and survivor benefits, through the end of the next fiscal year immediately succeeding the fiscal year in which the eligibility conditions are met.

(6) For a member with less than five (5) years of active service in a position participating in the retirement system, the disabling condition or death shall be the result of a single, traumatic, physical injury directly related to his or her Kentucky Teachers' Retirement System-covered employment in order to be eligible to apply for disability retirement, and for his or her beneficiary or any survivor to be eligible to apply for life insurance and survivor benefits.

(7) A member with less than five (5) years of service credit in Kentucky Teachers' Retirement System, who has service credit in Kentucky Retirement Systems, shall not be eligible to apply for disability retirement and shall be eligible only for a refund on his or her account pursuant to KRS 161.470(6), unless the member experiences a disabling condition as a result of the conditions required by subsection (6) of this section.

Section 2. A member who is employed part-time in a nonteaching position that requires certification or a four (4) year degree and who has never been an annuitant of the retirement system shall be eligible to apply for disability retirement benefits provided pursuant to KRS 161.661 and 161.663, and his or her beneficiary or any survivor eligible to apply for life insurance benefits provided pursuant to KRS 161.655 and survivor benefits provided pursuant to KRS 161.520, only if the member meets the eligibility conditions established in this section.

(1) The member shall have completed at least sixty-nine (69) percent of the number of days required for full-time employment in the position in order to become eligible to apply for disability retirement, and for his or her beneficiary and any survivor to be eligible to apply for life insurance and survivor benefits. Employment shall be in a position from which contributions were made to Kentucky Teachers' Retirement System.

(2) If the position does not provide for full-time employment, the member shall be required to complete at least sixty-nine (69) percent of a normal full-time contract of 260 days in order to meet the eligibility conditions established in this administrative regulation. Full-time employment shall not require less than 220 working days.

(3) The member shall be accredited days by adding his or her total number of hours worked in one (1) fiscal year and dividing that number by the number of hours that are required pursuant to a typical, full-time contract to extrapolate the number of full-time days. If this calculation results in a fractional number of days, the number shall be rounded down to the next whole number of days.

(4) A member who is employed by more than one (1) employer in the same fiscal year shall be required to complete a number of days at least equivalent to sixty-nine (69) percent of the number days in the full-time position of the employer requiring the greatest number of worked days.

(5) Once the requisite number of days or equivalent days are worked for one (1) fiscal year, the member shall be eligible to apply for disability retirement, and his or her beneficiary or any survivor shall be eligible to apply for life insurance and survivor benefits, through the end of the next fiscal year immediately succeeding the fiscal year in which the eligibility conditions are met.

(7) A member with less than five (5) years of service credit in Kentucky Teachers' Retirement System, who has service credit in Kentucky Retirement Systems, shall not be eligible to apply for disability retirement benefits and shall be eligible only for a refund of his or her account pursuant to the conditions of KRS 161.470(6), unless the member experiences a disabling condition as a result of the conditions required in subsection (6) of this section.

History

RELATES TO: KRS 161.470(6), 161.500, 161.520, 161.620, 161.655, 161.661, 161.663
STATUTORY AUTHORITY: KRS 161.310, 161.612
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Kentucky Teachers' Retirement System to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.612(2) requires the board to adopt eligibility conditions pursuant to which members providing part-time or substitute services may participate in the benefits provided pursuant to KRS 161.520, 161.655, 161.661, and 161.663. This administrative regulation establishes eligibility conditions for members providing part-time or substitute services.
History: 102 KAR 001:310. 36 Ky.R. 703; 1010; eff. 11-9-2009; 39 Ky.R. 1282; 1651; eff. 3-8-2013; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:320 Qualified domestic relations orders for TRS 1 members, TRS 2 members, and TRS 3 members {#sec-102-kar-1-320 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:320}

Section 1. Definitions.

(1) "Alternate payee" is defined by KRS 161.220(26).

(2) "Benefits" means a monthly service or disability retirement allowance or refund payable at the request of a participant covered by TRS who terminates employment in a TRS covered position prior to becoming eligible to receive a retirement allowance.

(3) "Member" is defined by KRS 161.220(4).

(4) "Participant" is defined by KRS 161.220(24).

(5) "Qualified domestic relations orders" or "QDRO" is defined by KRS 161.220(25).

(6) "TRS 1 members" means those individuals whose earliest effective date of membership in the retirement system begins prior to July 1, 2002.

(7) "TRS 2 members" means those individuals whose earliest effective date of membership in the retirement system begins on or between July 1, 2002 and June 30, 2008.

(8) "TRS 3 members" means those individuals whose earliest effective date of membership in the retirement system begins on or between July 1, 2008 and December 31, 2021.

Section 2. Applicability, QDRO Information, and TRS Approval. The provisions of this administrative regulation shall apply to a QDRO for TRS 1 members, TRS 2 members, and TRS 3 members.

(1) A QDRO shall state:

(a) The member's name, TRS member identification number, and last-known mailing address;

(b) The alternate payee's name and last known mailing address;

An active account from which the member is not currently receiving a retirement allowance; or
A retired account from which the member is currently receiving a retirement allowance and the date on which the member retired the account;

(d) The date of marriage;

(e) The date of decree of dissolution of marriage;

(f) That the order is for the purpose of property division;

(g) Whether the alternate payee shall receive:

Recurring monthly payments under Option A, Option B, or Option C; and
For an active, contributing participant, a share of a termination refund of the contributions posted to the participant's account as either:

a. A fixed dollar amount; or

b. A percentage calculated under Section 7(2) of this administrative regulation or as determined by either the Court or the parties;

(h) When payments shall begin;

(i) When payments shall cease;

(j) That the alternate payee shall be paid in the same form as the participant;

(k) If the alternate payee spouse shall share in the participant's cost of living adjustments if the QDRO awards a fixed dollar amount to the alternate payee;

(l) Who shall be responsible for payment of the TRS processing fee; and

(m) All information required on the Qualified Domestic Relations Order to Divide Teachers' Retirement System Benefits for TRS 1 members, TRS 2 members, and TRS 3 members.

(2) A QDRO shall be:

(a) Approved by TRS as to enforceability and compliance with the requirements of KRS 161.700 and this administrative regulation;

(b) Approved and submitted by the participant and alternate payee or their legal counsel;

(d) Filed with the clerk of the court; and

(e) Certified by the clerk of the court.

Section 3. Administrative Provisions.

(1) Upon entry of a final divorce decree, the participant shall forward a copy of the decree to TRS and:

(a) If the participant is a retired member, request:

A Change of Option Following Termination of Marriage form, if the participant wants to change his or her retirement option, which shall be filed with TRS within sixty (60) days of the final divorce decree;
A Change of Retirement Beneficiary form, if the participant had chosen retirement Option I or Option II and does not want to change his or her retirement option, but wants to name a new beneficiary;
A Designation of Beneficiary for TRS Life Insurance Benefit form, if the participant wants to designate a beneficiary other than his or her estate; or
A W-4P Withholding Certificate for Periodic Pension or Annuity Payments or "W-4P", if the participant wants to change the amount of federal tax withheld from his or her retirement benefit; or

(b) If the participant is an active member, he or she shall request:

A Designation of Beneficiary for TRS Retirement Account Balance form, if the participant wants to designate a beneficiary other than his or her estate; or
A Designation of Beneficiary for TRS Life Insurance Benefit form, if the participant wants to designate a beneficiary other than his or her estate.

(2) Thirty (30) days prior to filing the QDRO with TRS, the participant or alternate payee shall present a written request for benefits information for divorce purposes. The participant, alternate payee, or third party, including the party's legal counsel, shall provide a completed TRS Authorization for Release of Information form with the request.

(3) For a QDRO directed to an active account from which a participant is not currently receiving a retirement allowance, TRS may, for the current fiscal year, provide the unaudited salary information electronically submitted to TRS by the participant's employer upon receipt of the written request and release.

(4) If the QDRO is directed to an account from which the participant is not currently receiving a retirement allowance, TRS shall not project future earnings or future service or provide an actuarial opinion of present value of the participant's benefits nor calculate the value of the Social Security benefit the member would have received if he or she had contributed for purposes of offset under KRS 403.190. TRS shall provide:

(a) The participant's total accrued service credit, including service credit purchased during the marriage, and the member account balance, including the total amount of accrued contributions and interest, as posted at the end of each fiscal year during the marriage and for which an employer annual report has been received by TRS and for which the member has not received a refund; and

(b) An estimate of the monthly retirement allowance the participant would receive if the participant retired without a statutory reduction of the basic retirement allowance based upon the participant's final compensation and total accrued service credit as of the date of dissolution of marriage or receipt of the request for information.

(5) If the participant has retired, TRS shall provide the amount of the participant's monthly retirement allowance, the participant's accumulated account balance at retirement, the total retirement allowance received to date, and the participant's total accrued service credit, including any service credit purchased during the marriage. The parties, their legal counsel, or the court may use the information to decide what portion of the participant's account is marital. TRS shall not decide whether, or if, any portion of the participant's account is marital and potentially subject to division.

(6) The participant, alternate payee, or legal counsel shall submit a Qualified Domestic Relations Order to Divide Teachers' Retirement System Benefits form for TRS 1 members, TRS 2 members, and TRS 3 members to TRS for review forty-five (45) days prior to filing the QDRO with the court. The draft QDRO shall be approved by the participant and alternate payee or their legal counsel. If more than one (1) of the participant's accounts is subject to classification and division as marital property, a separate QDRO shall be issued for each TRS account. The draft QDRO may be sent by U.S. Mail or scanned and electronically mailed to TRS for review.

(7) TRS shall not review the draft QDRO until the following have been received:

(a) A $300 nonrefundable processing fee, by money order, certified check or on the attorney's trust account, made payable to the Kentucky State Treasurer, except that a processing fee shall not be charged for a QDRO issued solely for child support;

(b) The TRS Confidential Information form, which shall include the participant's and alternate payee's address, Social Security number, and date of birth;

(d) If the participant is retired and receiving a retirement allowance, a TRS Authorization for Direct Deposit form completed by the alternate payee and his or her financial institution; and

(e) Any other documents that are required to confirm additional service credit purchased, or sought to be purchased, for retirement calculation purposes under KRS 161.220 through 161.716, including TRS Military Service Certification and Affidavit form, with a copy of the discharge papers.

(8) Within twenty (20) days of receipt of the QDRO, TRS shall notify the participant and alternate payee in writing whether the QDRO meets TRS requirements. If the QDRO meets TRS requirements, TRS shall approve the QDRO and return a fully executed hard copy by U.S. Mail for submission to the court. If the participant or alternate payee is represented by legal counsel, the approved QDRO shall instead be provided to the legal counsel who submitted the draft by hard copy by U.S. Mail or electronic mail with notice to the other party or their legal counsel for submission to the court. If the participant is a retired member, TRS shall forward tax withholding forms to the alternate payee.

(9) If the QDRO does not meet TRS requirements, TRS shall notify the participant and alternate payee in writing, identifying those provisions which are not in compliance and the amendments needed to bring the QDRO into compliance. If the participant or alternate payee is represented by legal counsel, this notice shall instead be provided to their legal counsel. The amended QDRO shall be submitted to TRS for review and approval prior to filing with the court.

(10) TRS shall reject any QDRO entered by a court that has not been reviewed or approved by TRS prior to its submission to the court. TRS shall notify the participant, the alternate payee, or their legal counsel, and the court in writing, identifying those provisions that are not in compliance and the amendments needed to bring the QDRO into compliance before it shall be accepted by TRS.

(11) If the QDRO is subsequently amended before filing with the court, the amended QDRO shall be resubmitted to TRS with a $150 nonrefundable processing fee for review and approval.

(12) Following approval by the court, the participant, alternate payee, or legal counsel shall file a certified copy of the QDRO with TRS.

(a) The QDRO shall not become effective until the certified copy is received by TRS.

(b) Upon receipt of the certified copy, TRS shall designate the participant's account for implementation of the QDRO.

(c) While a separate account balance shall not be maintained for the alternate payee, a separate payroll account shall be established.

(d) If the participant is a retired member, payments to the alternate payee shall commence in the calendar month following the date that a certified copy of the QDRO is received by TRS, if the alternate payee has supplied correctly executed tax withholding forms. If the alternate payee either fails to return the tax withholding forms or does not correctly execute the forms, TRS shall apply the IRS default option in effect on the date the forms are received. If the Alternate Payee chooses a different option and then provides correctly executed tax withholding forms, future payments shall be adjusted. Retroactive payments shall not be paid for periods between entry of the parties' decree of dissolution and entry and acceptance of the QDRO by TRS.

(e) If the participant is an active member, payments to the alternate payee shall commence in the calendar month in which the participant begins to receive a monthly annuity. Upon receipt of an active member's retirement application, a TRS Authorization for Direct Deposit form and tax withholding forms shall be mailed to the alternate payee's last known address. Pursuant to KRS 161.640(3)(a), TRS cannot begin electronic fund transfers to the alternate payee until receipt of a fully executed TRS Authorization for Direct Deposit form. If the alternate payee either fails to return the tax withholding forms or does not correctly execute the forms, TRS shall proceed in the same manner as described in paragraph (d) of this subsection.

(f) If the participant is an active member who withdraws from service prior to eligibility for retirement and requests a refund of his or her accumulated account balance, the provisions of 102 KAR 1:060, setting forth the requirements for processing payment of the refund to the participant and the alternate payee, shall be followed. If the parties fail to designate the alternate payee's share of a refund in the QDRO, TRS shall refund the entire participant's account to the participant in accordance with the provisions of this administrative regulation and 102 KAR 1:060, and TRS and its staff shall have no liability for making the refund in this manner.

(13) If TRS is enforcing a QDRO that is subsequently amended or terminated by the court, then either the participant, alternate payee, or legal counsel shall submit a certified copy of the amended QDRO or order of termination to TRS for processing.

(14) The participant, alternate payee, or legal counsel shall not submit a QDRO that is not final and under consideration by an appellate court.

(15) The alternate payee shall be responsible for notifying TRS of any change in name, mailing address, or banking information.

(a) TRS shall provide a Name or Change of Address form or Authorization for Direct Deposit form upon request.

(b) TRS shall contact the alternate payee at the last known mailing address on file to notify the alternate payee when an annuity benefit subject to the QDRO becomes payable.

(c) Other than sending a notice as established in paragraph (b) of this subsection, TRS shall have no duty or responsibility to search for, or locate, the alternate payee.

(d) If the notification sent to the alternate payee's last known address is returned due to the alternate payee's failure to notify TRS of an address change or if the bank notifies TRS that the alternate payee's account has been closed, within sixty (60) days of the return of the notification to the alternate payee or receipt of notification from the bank, the amounts otherwise payable to the alternate payee shall be paid to the participant until a new address or bank account information is provided by the alternate payee.

(e) TRS shall have no liability to the alternate payee with respect to amounts paid to the participant.

(16) The participant shall be responsible for notifying TRS in writing of an event that causes benefit payments to the alternate payee spouse, child, or other dependent to cease.

(a) The participant shall provide TRS with a certified copy of the alternate payee's death certificate or marriage certificate. TRS shall suspend payments due the alternate payee provided that submission of proof of the death or marriage of the alternate payee, if marriage terminates payments under the terms of the QDRO, is received by the beginning of the month following receipt of the participant's written notification.

(b) The alternate payee shall also be responsible for notifying TRS in writing of the alternate payee's remarriage if, under the terms of the QDRO, that is an event that terminates the alternate payee's right to receive any payments.

(c) TRS shall not be responsible for payments made to the alternate payee until it is given timely written notice and documentation of any event terminating those payments.

Section 4. TRS Benefits Subject to a QDRO. A QDRO may apply to a participant's:

(1) Retirement allowance;

(2) Disability retirement allowance; or

(3) Termination refund.

Section 5. TRS Benefits Not Subject to a QDRO. A QDRO shall not apply to a participant's:

(1) Survivor annuity that becomes payable after the member's death;

(2) Survivor benefits that become payable after an active contributing member's death;

(3) Accounts that are not vested at the time of the dissolution of marriage;

(4) Life insurance benefit;

(5) Refund as a result of an error;

(6) Refund of an active or retired account in response to a member's death;

(7) Health insurance; and

(8) Any other payment or benefit not described in Section 4 of this administrative regulation.

Section 6. Effect of Alternate Payee's Death on QDRO. Under the terms of the QDRO, if an alternate payee has been awarded a share of the participant's annuity benefits and dies before the participant dies, retires, or withdraws his account, the entire remaining account value shall be restored to the participant.

Section 7. Calculation and Payment.

(1)

(a) If the participant has retired, the portion of the participant's benefits payable to the alternate payee as a percentage of the participant's total service retirement allowance, disability retirement allowance, or refundable account balance, accrued through the date of dissolution of marriage, that is in excess of the retirement benefits of the alternate payee as provided under KRS 403.190(4), shall be calculated by the following fraction:

The numerator of which shall be the participant's total full and fractional years of creditable TRS service earned during the marriage, including service credit purchased during the marriage; and
The denominator of which shall be the participant's total full and fractional years of TRS service credit through the date of retirement.

(b) The resulting fraction shall be converted to a percentage that shall be divided by two (2).

(c) Option C may be utilized if the duration of the retired participant and the alternate payee's marriage was less than the participant's total full and fractional years of TRS service at the date of retirement. The parties or their legal counsel shall report the marital years in Option C of the QDRO.

(2)

(a) For an active account, the portion of the participant's benefits payable to the alternate payee as a percentage of the participant's total service retirement allowance, disability retirement allowance, or refundable account balance, accrued through the date of dissolution of marriage, that is in excess of the retirement benefits of the alternate payee as provided under KRS 403.190(4), shall be calculated by the following fraction:

The numerator of which shall be the participant's total full and fractional years of creditable TRS service earned during the marriage, including service credit purchased during the marriage, as reported by the parties or their legal counsel in Option C of the QDRO; and
The denominator of which shall be the participant's total full and fractional years of TRS service credit as determined by TRS at the time that the participant retires either by service retirement or disability retirement or requests a refund of his or her account balance.

(b) The resulting fraction shall be converted to a percentage that shall be divided by two (2).

(3) If the participant is or will be receiving a disability retirement allowance, the participant's total annuity benefit for purposes of this administrative regulation shall be calculated under the service retirement formula established under KRS 161.661(5), even if the entitlement period described under KRS 161.661(3) and (4) has not expired.

(4) If an alternate payee has, under the terms of the QDRO, been awarded a share of the participant's disability retirement allowance that is subsequently discontinued, the alternate payee shall not receive a benefit. Further, if a participant remains disabled at the end of his or her entitlement period, pursuant to KRS 161.661(5), the disability benefits shall be recalculated and may result in a lower monthly payment to both the participant and the alternate payee.

(5) If the QDRO is directed to an account from which the participant is not receiving a retirement allowance, the participant's total annuity benefit shall be calculated without inclusion of the discounts required under KRS 161.600(1)(b)1. and 2. and (d).

(a) If at retirement the participant is subject to discounts required under KRS 161.620(1)(b) and (d), and if the QDRO establishes a set dollar amount to be withheld from the retirement benefits that are payable to the participant and to be paid to the alternate payee, TRS shall reduce the amount to be paid to the alternate payee under the QDRO by the amount of the discounts.

(b) TRS shall increase the amount paid to the alternate payee in an amount equal to any discounts that are subsequently eliminated as the result of the participant's return to work after retirement under the provisions of KRS 161.605(11), upon the participant's resumption of receipt of retirement benefits.

(6) If the QDRO is directed to an account from which the participant is not receiving a retirement allowance, and the participant at issuance of the QDRO is not eligible for calculation of his total annuity benefit based on his three (3) highest salaries as provided under KRS 161.220(9), then his total annuity benefit shall be calculated on his five (5) highest salaries.

(7) The participant may select any retirement option.

Section 8. TRS Costs and Legal Fees. Any person who attempts to make TRS a party to a domestic relations action in order to determine an alternate payee's right to receive a portion of the annuity benefits payable to the participant shall be liable to TRS for its costs and legal fees.

Section 9. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Teachers' Retirement System Authorization for Release of Information", July 2016;

(b) "Qualified Domestic Relations Order to Divide Teachers' Retirement System Benefits for TRS 1 members, TRS 2 members, and TRS 3 members", November 2024;

(d) "Teachers' Retirement System Authorization for Direct Deposit", July 2016;

(e) "Teachers' Retirement System Military Service Certification and Affidavit", July 2016;

(f) "Teachers' Retirement System Name or Change of Address", July 2016;

(g) "Change of Option Following Termination of Marriage", July 2016;

(h) "Change of Retirement Beneficiary", July 2016;

(i) "Designation of Beneficiary for TRS Life Insurance Benefit", July 2016;

(j) "Designation of Beneficiary for TRS Retirement Account Balance", July 2016;

(k) "Withholding Certificate for Periodic Pension or Annuity Payments" or "W-4P" 2024; and

(l) "Kentucky Resident State Tax Withholding Election", January 2023.

(3) W-4P may also be obtained at www.irs.gov/pub/irs-pdf/fw4p.pdf.

History

RELATES TO: KRS 161.220, 161.700, 161.716, 403.190, 26 U.S.C. 414(p)
STATUTORY AUTHORITY: KRS 161.310(1), 161.700(4)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the Board of Trustees of the Teachers' Retirement System (TRS) to promulgate administrative regulations for the administration of the funds of the retirement system. KRS 161.700(4) requires the Board of Trustees of TRS to promulgate administrative regulations setting forth the requirements, procedures, and forms for the approval and processing of qualified domestic relations orders impacting the benefits of participants of the retirement system. This administrative regulation establishes these requirements for TRS 1 members, TRS 2 members, and TRS 3 members.
History: 37 Ky.R. 606; 989; 1170; eff. 11-8-2010; 39 Ky.R. 1901; 2149; eff. 5-31-2013; 40 Ky.R. 2321; 2675; eff. 7-7-2014; 42 Ky.R. 2408, 2555; eff. 5-6-2016; 43 Ky.R. 262, 530; eff. 11-4-2016; 45 Ky.R. 2406, 3048; eff. 5-31-2019; Crt eff. 7-3-2019; 51 Ky.R. 511, 1071; eff. 12-10-2024.

102 KAR 1:330 Travel and administrative expenses {#sec-102-kar-1-330 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:330}

Section 1. Definitions.

(1) "Cabinet" means the Finance and Administration Cabinet.

(2) "High rate area" means a city, state, or metropolitan area in which it has been recognized that higher meal costs and lodging rates have historically prevailed and that has been designated by the secretary of the cabinet as a high rate area.

(3) "Receipt" means any preprinted invoice, from a hotel, motel, restaurant, or other establishment, showing the date of service, the amount charged for the service, the location where the service was performed, and a description of the expenditure.

Section 2.

(1) Any person or party who requests a subpoena requiring the personal appearance of an employee of KTRS to appear in a court proceeding or at a deposition or administrative hearing shall pay KTRS for the travel expenses of the KTRS employee and KTRS' legal counsel, including:

(a) The then prevailing mileage rate;

(b) Parking and tolls;

(d) Lodging expenses, if necessary; and

(e) The wages of the employee or legal counsel for the period he is required to be away from his work station which shall be calculated by multiplying the hourly rate of the employee or legal counsel by the number of hours each is required to be away from his work station.

(2) The mileage rate, meals, and lodging expenses, including those expenses incurred in a high rate area, shall be billed or reimbursed in accordance with the reimbursement rates established by the cabinet in 200 KAR 2:006.

(3) KTRS shall send an estimated amount for the expenses to the person or party requesting the subpoena.

(a) The person or party shall forward payment for the estimated expenses prior to the date of the appearance mandated by the subpoena.

(b)

KTRS shall forward an invoice with supporting receipts for any additional expenses incurred by the employee or legal counsel or issue a refund for any amount in excess of the estimated expenses.
Any personal identifying information regarding the employee or legal counsel shall be redacted from the receipt prior to its release.

(4) Any person or party who requests a subpoena requiring the production of copies of records or information in the custody of KTRS in standard hard copy format shall pay KTRS a fee for production which shall include:

(a) A copy charge of fifteen (15) cents per page;

(b) Postage based upon the weight of the package; and

(c) The wages of the employee required to compile or copy the requested records calculated by multiplying the hourly rate of the employee by the number of hours necessary to compile, copy, and collate the records or information.

(5) Any person or party who requests a subpoena requiring the production of records in the custody of KTRS in an electronic format which requires KTRS staff to write a program to extrapolate the requested information from the member's database to meet the specific request may recover staff costs at a rate of twenty-five (25) dollars per hour.

(6) KTRS shall notify the person or party of the fee in writing. The person or party shall forward payment for the requested records prior to release of such records by KTRS.

History

RELATES TO: KRS 161.585
STATUTORY AUTHORITY: KRS 161.585
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.585 requires the Board of Trustees of Kentucky Teachers' Retirement System (KTRS) to promulgate an administrative regulation to recover travel and administrative expenses incurred when KTRS staff are required to produce records or provide testimony in response to a duly issued subpoena. This administrative regulation establishes the procedures to recover travel and administrative expenses incurred when KTRS staff are required to produce records or provide testimony in response to a duly issued subpoena.
History: 102 KAR 001:330. 37 Ky.R. 609; 1172; eff. 11-8-2010; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 1:340 Calculation of final average salary {#sec-102-kar-1-340 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:340}

Section 1. Definitions.

(1) "Additional duties" means service from a duty or duties outside of the member's primary job duty. This includes compensation paid from a district's supplemental or extra service salary schedule, such as coaching, club sponsoring, and summer school teaching. Additional duties also includes extended school services (ESS). For members employed by employers that are not school districts, additional duties includes assignments, responsibilities, duties, college credit hour classes taught, grant writing, and projects that are outside of, or added to, the member's position.

(2) "Newly Created Position" means a position that did not exist at least a full twelve (12) months prior to the member's assumption of that position.

(3) "Position" means:

(a) The primary job duty performed by a member that, standing alone, earns service credit in TRS, whether that job duty is provided in full-time employment as defined in KRS 161.220(21), part-time employment, or substitute teaching; and

(b) Does not include additional duties as defined by this administrative regulation.

(4) "Previously existing position" means a position that existed at least a full twelve (12) months prior to the member's assumption of that position.

(5) "Rank and step" means a single, specific cell on the salary schedule where rank serves as one (1) axis of the schedule and step as the other.

(6) "Salary schedule" means only the single certified salary schedule based on rank and step generally applicable districtwide for teachers and excludes other schedules or compensation arrangements.

Section 2. A member who receives an increase in salary that exceeds the limits permitted for inclusion as final average salary pursuant to KRS 161.220(9)(b), but experiences a corresponding change in length in employment, shall have his or her final average salary calculated using salaries adjusted in the manner established in this section.

(1) The member shall receive one (1) additional day of salary for retirement calculation purposes at the member's base daily rate of pay for each day added to the member's annual contract in excess of the member's contracted days from the last immediately prior fiscal year.

(2) The base daily rate of pay used as an additional day of salary for retirement calculation purposes shall not include compensation:

(a) For extra duties worked beyond the member's primary job duty for which the member receives most of his or her compensation;

(b) That exceeds the limitations established by KRS 161.220(9)(b);

(d) That is otherwise excluded from use in retirement calculations pursuant to the provisions of KRS 161.220 through 161.716.

(3) The additional days shall be worked days in order to have the additional salary included for retirement calculation purposes.

Section 3. The limitation established by KRS 161.220(9)(b) on the amount of salary included in each of the member's three (3) highest salaries shall not apply if the increase in the member's salary is due to a corresponding change in position. A corresponding change in position only occurs if:

(1) The member assumes a newly created position in which all duties are new and different from the previous position the member held;

(2) The member moves from one (1) position to another separate, previously existing position; or

(3) The member assumes a second, previously existing position in its entirety, and now occupies two (2) different positions.

(4) For purposes of paragraphs (b) and (c) of this subsection:

(a) For school district employers, the district salary schedule shall be proof of a previously existing position.

(b) For other employers, proof of a previously existing position includes official employment records, such as those for classified and non-classified positions established under the state merit system.

Section 4. The limitation established by KRS 161.220(9)(b) on the amount of salary included in each of the member's three (3) highest salaries shall apply in situations including if:

(1) A member performs additional duties during the fiscal year;

(2) The employer changes the member's duties or responsibilities to include additional duties or responsibilities within the member's existing position;

(3) The member assumes some, but not all, duties of a second position; or

(4) The member assumes a newly created position in which not all duties are new and different.

Section 5. Any contributions paid to TRS on salaries that are disallowed under KRS 161.220(9)(b) shall be refunded to the school district on the member's behalf.

Section 6. The measurement of the limitation under KRS 161.220(9)(b) shall be applied so that the combined increase in salary for each of the last three (3) full years of salary prior to retirement shall not exceed the total permissible, percentage increase received by other members of the employer for the same three (3) year period. The increases for each of the last three (3) full years of salary shall be measured from, and compared to, the base full fiscal year salary that is immediately prior to the last three (3) full years of salary.

Section 7.

(1) In determining the limitation under KRS 161.220(9)(b), the total permissible percentage increase for a school district shall be the highest percentage increase for a specific cell of the salary schedule, as defined in Section 1(6), from one (1) fiscal year to the next and shall exclude any increase from one (1) cell to another cell whether by rank or step.

(2) Individual members may have increases greater than the district's permissible increase if they advance on the salary schedule as defined in Section 1(6) in step or rank. Individual members may not have increases greater than the district's permissible increase if they advance on a pay schedule or compensation agreement other than the salary schedule defined in Section 1(6).

History

RELATES TO: KRS 161.220-161.716
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the board of trustees to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.220(9) establishes the definition of "final average salary" including permissible salary increases for annuity calculations. This administrative regulation establishes the method for calculating final average salary if there is a change in position or in length of employment. This administrative regulation establishes how KRS 161.220(9) is applied.
History: 39 Ky.R. 1342; 1652; eff. 3-8-2013; Crt eff. 7-3-2019; 47 Ky.R. 360, 1193; eff. 3-2-2021; TAm eff. 4-2-2021; 51 Ky.R. 962, 1419; eff. 5-6-2025.

102 KAR 1:350 Full actuarial cost purchase {#sec-102-kar-1-350 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:350}

Section 1. Members who make an advance payment for service credit at full actuarial cost priorto their effective retirement date shall be accredited regular interest against their payment(s) at the rate provided for members under KRS 161.220(13). This interest, as assigned under KRS 161.440, shall be accredited at the time of retirement when the final full actuarial cost purchase amount is reconciled and shall be subject to adjustment to reflect the actuarial experience of the retirement system.

Section 2. Unless coverage is waived, the full actuarial cost for health insurance shall be paid by the member as follows:

(1) Members shall not be required to pay in advance any lump sum amount towards health insurance in making a full actuarial cost service purchase.

(2) Members who are not otherwise eligible to retire prior to making a full actuarial cost service purchase shall pay the full amount of the health insurance premium plus any amount required under KRS 161.675(4)(b) until the date is reached that they would have been eligible to retire the account under KRS 161.600 without the purchase. Upon reaching the date at which the retiree would have been eligible to retire the account under KRS 161.600 without the purchase, the retiree shall be entitled to the monthly health insurance benefit supplement approved by the board for each year based upon their years of service credit excluding the full actuarial cost service purchased. The retiree shall continue to pay monthly to the retirement system any amount required under KRS 161.675(4)(b) and any difference between the supplement as described in the previous sentence and the full cost of the monthly premium.

(3) Members who are eligible to retire the account under KRS 161.600 prior to making a full actuarial cost service purchase shall, upon retirement, be entitled to the monthly health insurance benefit supplement approved by the board for each year based upon their years of service credit, excluding the full actuarial cost service purchased. The retiree shall pay to the retirement system monthly any amount required under KRS 161.675(4)(b) and any difference between the supplement as described in the previous sentence and the full cost of the monthly premium.

History

RELATES TO: KRS 161.220(22), 161.440, 161.507, 161.515, 161.545, 161.5465, 161.547, 161.548, 161.549
STATUTORY AUTHORITY: KRS 161.310(1)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate all administrative regulations for the administration of the funds of the retirement system. KRS 161.507, 161.515, 161.545, 161.5465, 161.547, 161.548, and 161.549 permit members to purchase service credit. These purchases of service credit are purchasable at full actuarial cost as defined by KRS 161.220(22). This administrative regulation provides the interest rate to be accredited to members who make an advance payment for service credit at full actuarial cost prior to retirement and the method for paying the full actuarial cost of health insurance.
History: 39 Ky.R. 1964; 2152; eff. 5-31-2013; Cert eff. 7-3-2019; 51 Ky.R. 344, 855; eff. 11-8-2024.

102 KAR 1:361 Disability retirement for TRS 4 members with less than five (5) years of service {#sec-102-kar-1-361 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:361}

Section 1. For TRS 4 members who have less than five (5) years of creditable Kentucky service, the disability retirement benefits, including all eligibility and other conditions, shall be those disability retirement benefits for non-hazardous positions provided under KRS 61.621 (the Fred Capps Memorial Act).

Section 2. The members described in Section 1 shall not be eligible for benefits provided by KRS 161.661 or 161.663.

Section 3. Administrative Provisions.

(1) An application for duty-related injury disability benefits shall be filed on the TRS 4 Disability Retirement Application – Less Than Five Years of Service (application) and shall include:

(a) A photocopy of the member's certified birth certificate;

(b) A photocopy of the member's signed Social Security card;

(d) The Physician's Disability Evaluation Report and supporting documentation regarding the member's duty-related injury;

(e) The Applicant's Disability Statement; and

(f) If the duty-related injury was the result of external violence, a copy of any incident or police report filed at the time of the incident.

(2) TRS shall submit the application and supporting documentation to the medical review committee for evaluation and written disposition as required by KRS 161.661(14).

(3) If the application is approved, payment of these disability benefits shall be effective on the applicable date set forth in KRS 161.661(11).

Section 4. A member described in Section 1 of this administrative regulation shall be subject to providing ongoing and current medical reports upon request by TRS to confirm that the conditions for disability benefits eligibility remain in place.

Section 5. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "TRS 4 Disability Retirement Application-Less Than Five Years of Service", September 2022;

(b) "Physician's Disability Evaluation Report", September 2022; and

History

RELATES TO: KRS 161.661(19)
STATUTORY AUTHORITY: KRS 161.310, 161.661(19)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate administrative regulations for the administration of the funds of the retirement system and for the transaction of business. KRS 161.661(19) authorizes the board to promulgate administrative regulations regarding disability benefits for individuals in TRS 4, which consists of those who became members on or after January 1, 2022. This administrative regulation establishes the disability retirement benefits for those new members.
History: 49 Ky.R. 1199, 1598; eff. 5-2-2023.

102 KAR 1:370 Annuitization and disbursement from supplemental benefit {#sec-102-kar-1-370 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:370}

Section 1. Definition. (1) "TRS 4 members" means those individuals who establish membership in the retirement system on or after January 1, 2022.

Section 2. Upon retirement or subsequently, members may elect to annuitize into a lifetime monthly retirement allowance the total contributions to the supplemental benefit component in accordance with the actuarial assumptions and methods adopted by the board and in effect at the time of the member's retirement date. Members may also elect to annuitize a portion of the contributions to the supplemental benefit component and either receive a disbursement of the remaining contributions or leave the remaining balance in the supplemental benefit component to be accredited regular interest in accordance with KRS 161.220(13)(c). Members may not elect an annuity that provides a retirement allowance of less than $100 per month unless that retirement annuity represents an annuitization of all the contributions to the supplemental benefit component.

Section 3. Upon retirement or subsequently, members may request distribution of all contributions to the supplemental benefit component, partial disbursements, or leave all or part of the contributions in the supplemental benefit component to be accredited interest in accordance with KRS 161.220(13)(c). Partial disbursements shall be in amounts not less than $5,000 unless the remaining balance is less than $5,000.

History

RELATES TO: KRS 161.220(13)(c), 161.635, 161.636
STATUTORY AUTHORITY: KRS 161.310(1)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310 requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate all administrative regulations for the administration of the funds of the retirement system. KRS 161.635 and 161.636 establish a supplemental benefit component for TRS 4 members. Under these statutes, the member may, upon retirement or subsequently, choose to have the accumulated contributions in the supplemental benefit component annuitized into a lifetime monthly retirement allowance or receive the actuarial equivalent under one (1) of the options established by the board pursuant to KRS 161.630 or take a distribution over a period certain or a full or partial refund. This administrative regulation provides the process for, and rules of, the annuitization of and disbursement from the supplemental component.
History: 51 Ky.R. 431, 855; eff. 11-8-2024.

102 KAR 1:380 Qualified domestic relations orders for TRS 4 members {#sec-102-kar-1-380 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:380}

Section 1. Definitions.

(1) "Alternate payee" is defined by KRS 161.220(26).

(2) "Benefits" means a monthly service or disability retirement allowance provided from the foundational benefit component established pursuant to KRS 161.633 or 161.634 (foundational benefit), annuities or disbursements from the supplemental benefit component established pursuant to KRS 161.635 or 161.636 (supplemental benefit), or refund payable at the request of a participant covered by TRS who terminates employment in a TRS covered position prior to becoming eligible to receive a retirement allowance.

(3) "Member" is defined by KRS 161.220(4).

(4) "Participant" is defined by KRS 161.220(24).

(5) "Qualified domestic relations order" or "QDRO" is defined by KRS 161.220(25).

(6) "TRS 4 members" means those individuals whose earliest effective date of membership in the retirement system begins on or after January 1, 2022.

Section 2. Applicability, QDRO Information, and TRS Approval. The provisions of this administrative regulation shall apply to a QDRO for TRS 4 members.

(1) A QDRO shall state:

(a) The participant's name, TRS participant identification number, and last-known mailing address;

(b) The alternate payee's name and last-known mailing address;

(d) The date of the decree of dissolution of marriage;

(e) That the order is for the purpose of property division;

(f) Whether the order applies to:

An active account from which the participant is not currently receiving a retirement allowance;
A retired account from which the participant is currently receiving a retirement allowance and the date on which the participant retired the account;
The participant's foundational benefit; or
The participant's supplemental benefit;

(g) Whether the alternate payee shall receive:

Recurring monthly payments from the participant's foundational benefit under Option A, Option B, or Option C; and
For an account that has not yet been retired, a share of a termination refund of the contributions posted to the participant's foundational benefit account as either:

a. A fixed dollar amount; or

b. A percentage calculated under Section 7(2) of this administrative regulation or as determined by either the court or the parties;

(h) Whether the alternate payee shall receive from the supplemental benefit of an account that has not yet been retired a disbursement of a one (1) time fixed dollar amount being payable:

Upon execution of and receipt by TRS of a valid QDRO;
Within sixty (60) days following the active participant's effective retirement date with TRS; and
With or without interest, with interest to be awarded as of the date of dissolution of the marriage;

(i) Whether the alternate payee shall receive from the supplemental benefit of an account that has not yet been retired, a share of a termination refund of the contributions posted to that account as either:

A fixed dollar amount; or
A percentage calculated under Section 7(2) of this administrative regulation or as determined by either the court or the parties;

(j) Whether the alternate payee shall receive from a supplemental benefit of an account that was retired prior to entry of the decree of dissolution of marriage, a monthly annuity or a one (1) time disbursement from the participant's remaining supplemental benefit balance as:

A one (1) time fixed dollar amount; or
A percentage calculated under Section 7(2) of this administrative regulation or as determined by either the court or the parties;

(k) When payments shall begin if an annuity;

(l) When payments shall cease if an annuity;

(m) That the alternate payee shall be paid in the same form as the participant, except that the alternate payee shall be entitled to only a one (1) time distribution from the supplemental benefit if the account has not been retired prior to entry of the decree of dissolution;

(n) If the alternate payee shall share in the participant's cost of living adjustments if the QDRO awards a fixed dollar amount of the foundational benefit to the alternate payee;

(o) Who shall be responsible for payment of the TRS processing fee; and

(p) All information required on the Qualified Domestic Relations Order to Divide TRS 4 Member's Benefits.

(2) A QDRO shall be:

(a) Approved by TRS as to enforceability and compliance with the requirements of KRS 161.700 and this administrative regulation;

(b) Approved and submitted by the participant and alternate payee or their legal counsel;

(d) Filed with the clerk of the court; and

(e) Certified by the clerk of the court.

Section 3. Administrative Provisions.

(1) Upon entry of a final divorce decree, the participant shall forward a copy of the decree to TRS and:

(a) If the participant is a retired member, request:

A Change of Option Following Termination of Marriage form, if the participant wants to change his or her retirement option, which shall be filed with TRS within sixty (60) days of the entry of the final divorce decree;
A Change of Beneficiary for Retired Member form, if the participant had chosen retirement Option I or Option II and does not want to change his or her retirement option, but wants to name a new beneficiary;
A Designation of Beneficiary for TRS Life Insurance Benefit form, if the participant wants to designate a beneficiary other than his or her estate; or
A W-4P Withholding Certificate for Periodic Pension or Annuity Payments or "W-4P", if the participant wants to change the amount of federal tax withheld from his or her retirement benefit; or

(b) If the participant is an active member, he or she shall request:

TRS 4 Active Member Account Beneficiary Designations form, if the participant wants to designate a beneficiary other than his or her estate; or
A Designation of Beneficiary for TRS Life Insurance Benefit form, if the participant wants to designate a beneficiary other than his or her estate.

(2) Thirty (30) days prior to filing the QDRO with TRS, the participant or alternate payee shall present a written request for benefits information for divorce purposes. The participant, alternate payee, or third party, including party's legal counsel, shall provide a completed TRS Authorization for Release of Information form with the request.

(4) If the QDRO is directed to an account from which the participant is not currently receiving a retirement allowance, TRS shall not project future earnings or future service, provide an actuarial opinion of present value of the participant's benefits, or calculate the value of the Social Security benefit the member would have received if he or she had contributed for purposes of offset under KRS 403.190. TRS shall provide:

(a) The participant's total accrued service credit, including service credit purchased during the marriage, and the participant's account balance, including the total amount of accrued contributions and interest, as posted at the end of each fiscal year during the marriage and for which an employer annual report has been received by TRS and for which the participant has not received a refund;

(b) An estimate of the monthly retirement allowance the participant would receive from the foundational benefit if the participant retired without a statutory reduction of the basic retirement allowance based upon the participant's final compensation and total accrued service credit as of the date of the dissolution of marriage or receipt of the request for the information; and

(5) If the QDRO is directed to an account that has been retired, TRS shall provide the participant's monthly retirement allowance received from the foundational benefit, any annuity received by the participant from the supplemental benefit, any remaining accumulated account balance at retirement in the supplemental benefit, the total retirement allowance or annuity received to date, and the participant's total accrued service credit, including any service credit purchased during the marriage. The parties, their legal counsel, or the court may use the information to decide which, if any, portion of the participant's foundational benefit and supplemental benefit are marital. TRS shall not decide whether, or if, any portion of the participant's foundational benefit and supplemental benefit are marital and potentially subject to division.

(6) The participant, alternate payee, or legal counsel shall submit a Qualified Domestic Relations Order to Divide Teachers' Retirement System 4 Member's Benefits form to TRS for review forty-five (45) days prior to filing the QDRO with the court. The draft QDRO shall be approved by the participant and alternate payee or their legal counsel. If more than one (1) of the participant's accounts is subject to classification and division as marital property, a separate QDRO shall be issued for each TRS account. The draft QDRO may be sent by U.S. Mail or scanned and electronically mailed to TRS for review.

(7) TRS shall not review the draft QDRO until the following have been received:

(b) The TRS Confidential Information form, which shall include the participant's and alternate payee's address, Social Security number, and date of birth;

(d) If the QDRO is directed to an account that has been retired, a TRS Authorization for Direct Deposit form completed by the alternate payee and his or her financial institution; and

(e) Any other documents that are required to confirm additional service credit purchased, or sought to be purchased, for retirement calculation purposes pursuant to KRS 161.220 through 161.716, including TRS Military Service Certification and Affidavit form, with a copy of the discharge papers.

(8) Within twenty (20) days of receipt of the QDRO, TRS shall notify the participant and alternate payee in writing whether the QDRO meets TRS requirements. If the QDRO meets TRS requirements, TRS shall approve the QDRO and return a fully executed hard copy by U.S. Mail for submission to the court. If the participant or alternate payee are represented by legal counsel, the approved QDRO shall instead be provided to the legal counsel who submitted the draft by hard copy by U.S. Mail or electronic mail with notice to the other party or their legal counsel for submission to the court. If the participant is a retired member, TRS shall forward tax withholding forms to the alternate payee.

(9) If the QDRO does not meet TRS requirements, TRS shall notify the participant and alternate payee, in writing, identifying those provisions which are not in compliance and the amendments needed to bring the QDRO into compliance. If the participant or alternate payee is represented by legal counsel, this notice shall be provided to their legal counsel. The amended QDRO shall be submitted to TRS for review and approval prior to filing with the court.

(10) TRS shall reject any QDRO entered by a court that has not been reviewed or approved by TRS prior to its submission to the court. TRS shall notify the participant, alternate payee, or their legal counsel, and the court in writing, identifying those provisions that are not in compliance and the amendments needed to bring the QDRO into compliance before it shall be accepted by TRS.

(11) If the QDRO is subsequently amended before filing with the court, the amended QDRO shall be resubmitted to TRS with a $150 nonrefundable processing fee for review and approval.

(12) Following approval by the court, the participant, alternate payee, or legal counsel shall file a certified copy of the QDRO with TRS.

(a) The QDRO shall not become effective until the certified copy is received by TRS.

(b) Upon receipt of the certified copy, TRS shall designate the participant's account for implementation of the QDRO.

(c) While a separate account balance shall not be maintained for the alternate payee, a separate payroll account shall be established.

(d) If the participant is a retired member, payments to the alternate payee shall commence in the calendar month following the date that a certified copy of the QDRO is received by TRS, if the alternate payee has supplied correctly executed tax withholding forms. If the alternate payee either fails to return the tax withholding forms or does not correctly execute the forms, TRS shall apply the IRS default option in effect on the date the forms are received. If the alternate payee chooses a different option and then provides correctly executed tax withholding forms, future payments shall be adjusted. Retroactive payments shall not paid for periods between entry of the parties' decree of dissolution and entry and acceptance of the QDRO by TRS.

(e) If the QDRO is directed to an account that has not yet been retired, payments to the alternate payee shall commence in the calendar month in which the participant begins to receive a monthly annuity. Upon receipt of an active member's retirement application, a TRS Authorization for Direct Deposit form and tax withholding documents shall be mailed to the alternate payee's last known address. Pursuant to KRS 161.640(3)(a), TRS cannot begin electronic fund transfers to the alternate payee until receipt of a fully executed TRS Authorization for Direct Deposit form. If the alternate payee either fails to return the tax withholding forms or does not correctly execute the forms, TRS shall proceed in the same manner as described in paragraph (d) of this subsection.

(f) If the participant is an active member who withdraws from service prior to eligibility for retirement and requests a refund of his or her accumulated foundational benefit or supplemental benefit, the provisions of 102 KAR 1:060, setting forth the requirements for processing payment of the refund to the participant or alternate payee, shall be followed. If the parties fail to designate the alternate payee's share of a refund in the QDRO, TRS shall refund the participant's entire foundational benefit and supplemental benefit to the participant in accordance with the provision of this administrative regulation and 102 KAR 1:060, and TRS and its staff shall have no liability for making the refund in this manner.

(14) The participant, alternate payee, or legal counsel shall not submit a QDRO that is not final and under consideration by an appellate court.

(15) The alternate payee shall be responsible for notifying TRS of any change in name, mailing address, or banking information.

(a) TRS shall provide a Name or Change of Address form or Authorization for Direct Deposit form upon request.

(b) TRS shall contact the alternate payee at the last known mailing address on file to notify the alternate payee when a retirement benefit subject to the QDRO becomes payable.

(c) Other than sending a notice as established in paragraph (b) of this subsection, TRS shall have no duty or responsibility to search for, or locate, the alternate payee.

(e) TRS shall have no liability to the alternate payee with respect to amounts paid to the participant.

(16) The participant shall be responsible for notifying TRS in writing of an event that causes benefit payments to alternate payee spouse, child, or other dependent to cease.

(a) The participant shall provide TRS with a certified copy of the alternate payee's death certificate or marriage certificate. TRS shall suspend payments due to the alternate payee provided that submission of proof of the death or marriage of the alternate payee, if marriage terminates payments under the QDRO, is received by TRS before the beginning of the month following receipt of the participant's written notification.

(c) TRS shall not be responsible for payments made to the alternate payee until it is given timely written notice and documentation of any event terminating those payments.

Section 4. TRS Benefits Subject to a QDRO. A QDRO may apply to a participant's:

(1) Retirement allowance from the foundational benefit;

(2) Disability retirement allowance from the foundational benefit;

(3) Disbursements, and if the participant is retired and receiving a retirement allowance, any annuity from the supplemental benefit; or

(4) Termination refund.

Section 5. TRS Benefits Not Subject to a QDRO. A QDRO shall not apply to a participant's:

(1) Survivor annuity that becomes payable after the participant's death;

(2) Survivor benefits that become payable after an active contributing participant's death;

(3) Accounts that are not vested at the time of the dissolution of marriage;

(4) Life insurance benefit;

(5) Refund as a result of an error;

(6) Refund of an active or retired account in response to a participant's death;

(7) Health insurance; and

(8) Any other payment or benefit not described in Section 4 of this administrative regulation.

Section 6. Effect of Alternate Payee's Death on QDRO. Under the terms of the QDRO, if an alternate payee has been awarded a share of the participant's annuity benefits and dies before the participant dies, retires, or withdraws his or her account, the entire remaining account value shall be restored to the participant.

Section 7. Calculation and Payment.

(1)

(a) If the QDRO is directed to an account that has been retired, the portion of the participant's benefits payable to the alternate payee as a percentage of the participant's total service retirement allowance, disability retirement allowance, annuities or disbursements from the supplemental benefit component, or refundable account balance, accrued through the date of dissolution of marriage, that is in excess of the retirement benefits of the alternate payee as provided under KRS 403.190(4), shall be calculated by the following fraction:

The numerator of which shall be the participant's total full and fractional years of creditable TRS service earned during the marriage, including service credit purchased during the marriage; and
The denominator of which shall be the participant's total full and fractional years of TRS service credit through the date of retirement.

(b) The resulting fraction shall be converted to a percentage that shall be divided by two (2).

(2)

(a) If the QDRO is directed to an account that has not yet been retired, the portion of the participant's benefits payable to the alternate payee as a percentage of the participant's total service retirement allowance or disability retirement allowance payable from the foundational benefit or one (1) time disbursement from the supplemental benefit, or refundable account balance, accrued through the date of dissolution of marriage, that is in excess of the retirement benefits of the alternate payee as provided under KRS 403.190(4), shall be calculated by the following fraction:

The numerator of which shall be the participant's total full and fractional years of creditable TRS service earned during the marriage, including service credit purchased during the marriage, as reported by the parties or their legal counsel in Option C of the QDRO; and
The denominator of which shall be the participant's total full and fractional years of TRS service credit as determined by TRS at the time that the participant retires either by service retirement or disability retirement or requests a refund of his or her account balance.

(b) The resulting fraction shall be converted to a percentage that shall be divided by two (2).

(3) If an alternate payee has, under the terms of the QDRO, been awarded a share of the participant's disability retirement allowance that is subsequently discontinued, the alternate payee shall not receive a benefit.

(4) If the QDRO is directed to an account that has not yet been retired, the participant's total annuity from the foundational benefit shall be calculated without inclusion of the discounts required under KRS 161.600(2)(d).

(a) If at retirement the participant is subject to discounts required under KRS 161.600(2)(d), and if the QDRO establishes a set dollar amount to be withheld from the retirement benefits that are payable to the participant and to be paid to the alternate payee, TRS shall reduce the amount to be paid to the alternate payee under the QDRO by the amount of the discounts.

(b) TRS shall increase the amount paid to the alternate payee in amount equal to any discounts that are subsequently eliminated as the result of the participant's return to work after retirement under the provisions of KRS 161.605(11), upon the participant's resumption of receipt of retirement benefits.

Section 9. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) "Teachers' Retirement System Authorization for Release of Information", July 2016;

(b) "Qualified Domestic Relations Order to Divide Teachers' Retirement System 4 Member's Benefits", July 2024;

(d) "Teachers' Retirement System Authorization for Direct Deposit", July 2016;

(e) "Teachers' Retirement System Military Service Certification and Affidavit", July 2016;

(f) "Teachers' Retirement System Name or Change of Address", July 2016;

(g) "Change of Option Following Termination of Marriage", July 2016;

(h) "Change of Beneficiary for Retired Member", July 2016;

(i) "Designation of Beneficiary for TRS Life Insurance Benefit", July 2016;

(j) "TRS 4 Active Member Account Beneficiary Designations", April 2023;

(k) "Kentucky Resident State Tax Withholding Election". January 2023; and

(l) "Withholding Certificate for Periodic Pension or Annuity Payments" or "W-4P", 2024.

(3) This material may also be obtained from the TRS Web site at https://trs.ky.gov/active-members. The W-4P may also be obtained at www.irs.gov/pub/irs-pdf/fw4p.pdf.

History

RELATES TO: KRS 161.220, 161.605, 161.633, 161.634, 161.635, 161.636, 161.640, 161.600, 161.700, 161.716, 403.190, 26 U.S.C. 414(P)
STATUTORY AUTHORITY: KRS 161.310(1), 161.700(4)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.310(1) requires the Board of Trustees of the Teachers' Retirement System of the State of Kentucky (TRS) to promulgate administrative regulations for the administration of the funds of the retirement system. KRS 161.700(4) requires the Board of Trustees of TRS to promulgate administrative regulations setting forth the requirements, procedures, and forms for the approval and processing of qualified domestic relations orders impacting the benefits of participants in the retirement system. This administrative regulation establishes these requirements for TRS 4 members in lieu of the provisions of 102 KAR 1:320.
History: 51 Ky.R. 820, 1254; eff. 4-2-2025.

Chapter 2 Board of Trustees

102 KAR 2:010 Election of chairperson, vice chairperson {#sec-102-kar-2-010 omnilex-key=us-ky-regs-official--title-102--102 KAR 2:010}

Section 1. At the last meeting of the fiscal year (the fourth quarter meeting) the board of trustees shall elect a chairperson and vice chairperson for the succeeding fiscal year.

History

RELATES TO: KRS 161.340
STATUTORY AUTHORITY: 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.340 provides for the annual election of a chairperson and a vice chairperson for the board of trustees. This administrative regulation sets the time for such election.
History: 102 KAR 002:010. TRS-11; 1 Ky.R. 464; eff. 3-12-1975; 3 Ky.R. 381; eff. 12-1-1976; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

102 KAR 2:025 Executive secretary's qualifications {#sec-102-kar-2-025 omnilex-key=us-ky-regs-official--title-102--102 KAR 2:025}

Section 1. Since the executive secretary occupies the position of chief administrative officer of the retirement system, it is essential that the person holding this position have the following general qualifications:

(1) A graduate of an accredited four (4) year college or university with a major related to school or public administration, accounting, personnel administration or other area relating to the administration of a broad program of retirement benefits.

(2) Have experience of three (3) or more years in school or public administration, retirement system administration, public accounting or other related fields.

(3) Have a depth of understanding of actuarial principals and assumptions on which the system is based.

(4) Have the ability to organize and direct the staff of the system so as to assure its efficient administration in all areas of its operation.

(5) Have a general knowledge of the factors involved in carrying on a prudent and effective investment program for the system's trust fund.

(6) Have the ability to work cooperatively with individuals and groups having an interest in the system and its program of benefits, and to secure support of such persons for needed improvements in the system.

(7) Have an understanding of the problems of older persons and the ability to work with such persons in making reasonable attempts to solve or alleviate these special difficulties.

(8) Have a detailed knowledge of the statutes and administrative regulations governing the retirement system and ability to interpret them to both active and retired teachers.

History

RELATES TO: KRS 161.220-161.710
STATUTORY AUTHORITY: KRS 161.310
NECESSITY, FUNCTION, AND CONFORMITY: KRS 161.340(1) provides that the Board of Trustees may require, by administrative regulation, qualifications for the position of executive secretary beyond that included in this particular statute. This administrative regulation sets out additional qualifications as needed to supplement this section of the statutes and is in compliance therewith.
History: 102 KAR 002:025. 2 Ky.R. 533; eff. 6-2-1976; Crt eff. 7-3-2019; Crt eff. 12-17-2025.

Title 102 KAR — Teachers' Retirement System

Chapter 1 General Rules

102 KAR 1:010 Rules and administrative regulations {#sec-102-kar-1-010 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:010}

102 KAR 1:030 Substitute teachers and nonuniversity, noncommunity college part-time members {#sec-102-kar-1-030 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:030}

102 KAR 1:032 Bona fide retirement {#sec-102-kar-1-032 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:032}

102 KAR 1:035 Employment by retired members; calculation of the Daily Wage Threshold and Average Daily Rate {#sec-102-kar-1-035 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:035}

102 KAR 1:036 Part-time service for university, college, and community college members {#sec-102-kar-1-036 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:036}

102 KAR 1:037 Administrative staff membership {#sec-102-kar-1-037 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:037}

102 KAR 1:038 Fractional service year for members initially employed on a full-time basis {#sec-102-kar-1-038 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:038}

102 KAR 1:039 New entrants {#sec-102-kar-1-039 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:039}

102 KAR 1:045 Transfer to other systems {#sec-102-kar-1-045 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:045}

102 KAR 1:050 Out-of-state service interest rates {#sec-102-kar-1-050 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:050}

102 KAR 1:057 Credit for military service {#sec-102-kar-1-057 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:057}

102 KAR 1:060 Refunds {#sec-102-kar-1-060 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:060}

102 KAR 1:070 Application for retirement {#sec-102-kar-1-070 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:070}

102 KAR 1:100 Insurance {#sec-102-kar-1-100 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:100}

102 KAR 1:105 401(h) established pursuant to 26 U.S.C. 401(h) account {#sec-102-kar-1-105 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:105}

102 KAR 1:110 Leave of absence {#sec-102-kar-1-110 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:110}

102 KAR 1:125 Omitted contributions; reinstatement of accounts {#sec-102-kar-1-125 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:125}

102 KAR 1:130 Additional contributions {#sec-102-kar-1-130 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:130}

102 KAR 1:135 Interest credited to accounts {#sec-102-kar-1-135 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:135}

102 KAR 1:138 Crediting of interest for TRS 4 members {#sec-102-kar-1-138 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:138}

102 KAR 1:140 Disability {#sec-102-kar-1-140 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:140}

102 KAR 1:145 Basis for options {#sec-102-kar-1-145 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:145}

102 KAR 1:150 Optional benefits {#sec-102-kar-1-150 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:150}

102 KAR 1:155 Annuity payments {#sec-102-kar-1-155 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:155}

102 KAR 1:163 Collection of life insurance benefits {#sec-102-kar-1-163 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:163}

102 KAR 1:165 Surviving children's benefits {#sec-102-kar-1-165 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:165}

102 KAR 1:168 Survivor's benefits {#sec-102-kar-1-168 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:168}

102 KAR 1:170 Minimum distribution {#sec-102-kar-1-170 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:170}

102 KAR 1:175 Investment policies {#sec-102-kar-1-175 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:175}

102 KAR 1:178 Investment policies for insurance trust fund {#sec-102-kar-1-178 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:178}

102 KAR 1:180 Kentucky Industrial Development Finance Authority investments {#sec-102-kar-1-180 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:180}

102 KAR 1:195 Employer reports {#sec-102-kar-1-195 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:195}

102 KAR 1:210 Submission of employer data {#sec-102-kar-1-210 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:210}

102 KAR 1:220 Final average salary based on average of three (3) highest salaries {#sec-102-kar-1-220 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:220}

102 KAR 1:225 General compliance with federal tax laws {#sec-102-kar-1-225 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:225}

102 KAR 1:230 Limitations on benefits {#sec-102-kar-1-230 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:230}

102 KAR 1:240 Increase in compensation limit {#sec-102-kar-1-240 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:240}

102 KAR 1:245 Rollovers and transfers of contributions to other plans {#sec-102-kar-1-245 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:245}

102 KAR 1:250 Rollovers from other plans {#sec-102-kar-1-250 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:250}

102 KAR 1:270 Statement of member account {#sec-102-kar-1-270 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:270}

102 KAR 1:280 Service credit required for member to qualify for three (3) percent retirement factor {#sec-102-kar-1-280 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:280}

102 KAR 1:290 Disability retirement application, review, and examinations {#sec-102-kar-1-290 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:290}

102 KAR 1:300 Kentucky Teachers' Retirement System Trustees Education Program {#sec-102-kar-1-300 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:300}

102 KAR 1:310 Benefit eligibility conditions for members providing part-time and substitute services {#sec-102-kar-1-310 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:310}

102 KAR 1:320 Qualified domestic relations orders for TRS 1 members, TRS 2 members, and TRS 3 members {#sec-102-kar-1-320 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:320}

102 KAR 1:330 Travel and administrative expenses {#sec-102-kar-1-330 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:330}

102 KAR 1:340 Calculation of final average salary {#sec-102-kar-1-340 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:340}

102 KAR 1:350 Full actuarial cost purchase {#sec-102-kar-1-350 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:350}

102 KAR 1:361 Disability retirement for TRS 4 members with less than five (5) years of service {#sec-102-kar-1-361 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:361}

102 KAR 1:370 Annuitization and disbursement from supplemental benefit {#sec-102-kar-1-370 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:370}

102 KAR 1:380 Qualified domestic relations orders for TRS 4 members {#sec-102-kar-1-380 omnilex-key=us-ky-regs-official--title-102--102 KAR 1:380}

Chapter 2 Board of Trustees

102 KAR 2:010 Election of chairperson, vice chairperson {#sec-102-kar-2-010 omnilex-key=us-ky-regs-official--title-102--102 KAR 2:010}

102 KAR 2:025 Executive secretary's qualifications {#sec-102-kar-2-025 omnilex-key=us-ky-regs-official--title-102--102 KAR 2:025}

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