(1) The governing board of any local government retirement system created pursuant to
KRS § 67A.320, 67A.340, 67A.360 to 67A.690, 79.080, 90.400, 90.410, 95.290,
95.520 to 95.620, 95.621 to 95.629, 95.767 to 95.784, 95.851 to 95.884, or KRS Chapter 96 shall submit the retirement system to an actuarial valuation, if the system provides a defined benefit, at least:
(a) Once every three (3) years if the system has six (6) or more active and retired members; or
(b) Once every five (5) years if the system has less than six (6) active and retired members.
The valuation shall be prepared by an actuary who is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary under the Employees’ Retirement Income Security Act of 1975. The board shall send a copy of the most recent valuation to the librarian of the Legislative Research Commission by September 1, 1982, and thereafter the board shall send a copy of each new valuation within ten (10) days of receipt. If all liabilities to all individuals entitled to benefits from the local government retirement system have been satisfied, no actuarial valuation shall be required.
(2) Actuaries performing valuations pursuant to this section shall use the entry age normal cost funding method. Their reports shall include a definition of each actuarial term and an explanation of each actuarial assumption used. Assumptions shall be reasonably related to the experience of the system and represent the actuary’s best estimate of anticipated experience.
(3) Any city or municipal agency with a retirement system created pursuant to KRS
79.080, 90.400, 90.410, 95.520 to 95.620, 95.621 to 95.629, 95.767 to 95.784,
95.851 to 95.884, or KRS Chapter 96 which is closed to new members pursuant to KRS § 78.530, 95.520, 95.621, or 95.852 shall, if its local pension system provides a defined benefit, contribute annually to the pension system, for the benefit of the retirees of the system and the active participants who choose to remain in the system, and for the benefit of members who have completed at least twenty (20) years’ service and withdrawn from service pursuant to KRS § 95.857, an amount equal to that which would be required pursuant to the funding standards of KRS
95.868, plus so much of the principal amount of any unfunded prior service liability as the actuary states is necessary to maintain cash flow adequate to pay retiree and beneficiary payments until financial obligations to all retirees and beneficiaries are fully satisfied.
(4) All lawful expenses for general administration, performance bonds, medical, actuarial, accounting, auditing, legal, and investment services of a retirement system listed in subsection (1) of this section shall be paid from the pension fund. Actuaries
performing valuations pursuant to this section shall include estimates of the expenses in their recommendations for pension system funding, and local governments shall add payments for the expenses to their annual contributions to their respective retirement systems.
(5) A city or city agency, consolidated local government, or urban-county government may, pursuant to KRS § 67A.340, 79.080, 90.410, or KRS Chapter 96 as applicable, provide for the retirement security of its employees through the creation of a money purchase or defined contribution plan qualified under Section 401(a) of the Internal Revenue Code of 1954 as amended. City employee deferred compensation plans created pursuant to KRS § 18A.270, or money purchase or defined contribution plans, qualified under Section 401(a) of the Internal Revenue Code of 1954 as amended, which by their nature cannot have an unfunded liability, shall not be subject to the actuarial valuation requirements of this section, and shall not be subject to termination for purposes of employee entry into the County Employees Retirement System, as required by KRS § 78.530, 79.080, 90.410, and 96.180.
(6) No city or county, except an urban-county, or special district, nor any agency or instrumentality of a city or county or special district shall create or maintain for its officers or employees a defined benefit retirement system, which by its nature can have an unfunded liability. The provisions of this subsection shall not preclude employer contributions for city managers or other appointed local government executives who participate, pursuant to KRS § 78.540, in a retirement system which operates in more than one (1) state, nor the continuation of a local government defined benefit retirement system which has been closed to new members but which must fulfill its obligations to current active members, retirees, and beneficiaries. Notwithstanding any provision to the contrary, the provisions of this subsection shall not apply to length of service awards programs established for the benefit of volunteer firefighters and volunteer life squad and volunteer rescue personnel.
(7) Notwithstanding any provision to the contrary, any city or county may establish awards programs that recognize the length of service to the community by volunteer firefighters, volunteer life squads, and volunteer rescue personnel.
Effective: July 15, 2016
History: Amended 2016 Ky. Acts ch. 31, sec. 1, effective July 15, 2016. — Amended
2014 Ky. Acts ch. 92, sec. 30, effective January 1, 2015. — Amended 2002 Ky. Acts ch. 346, sec. 23, effective July 15, 2002. — Amended 1998 Ky. Acts ch. 328, sec. 1, effective July 15, 1998. — Amended 1992 Ky. Acts ch. 238, sec. 1, effective July 14,
1992. — Amended 1988 Ky. Acts ch. 11, sec. 2, effective July 15, 1988. — Amended
1984 Ky. Acts ch. 24, sec. 1, effective July 13, 1984; and ch. 177, sec. 14, effective
July 13, 1984. — Created 1982 Ky. Acts ch. 297, sec. 1, effective July 15, 1982.