Kentucky Statutes 161.635 – Supplemental component for persons who became nonuniversity members on or after January 1, 2022 — Benefit — Contributions — Election upon termination of employment and upon retirement — Plans authorized under Internal …
Current as of: 2024 | Check for updates
|
Other versions
(1) An individual who becomes a nonuniversity member of the Teachers’ Retirement System on or after January 1, 2022, shall receive the retirement benefits provided by this section in addition to the retirement benefits provided under KRS § 161.620. The retirement benefits provided by this section shall be known as the supplemental benefit component.
(2) The supplemental benefit component shall provide a benefit based upon a member’s accumulated account balance which shall include:
(a) Mandatory contributions made by the member as provided by KRS
161.540(1)(c)2.;
(b) Voluntary contributions made by the member, which may include lump-sum payments;
(c) Mandatory contributions made by the employer as provided by KRS
161.550(1)(d)2.;
(d) Voluntary employer contributions; and
(e) Regular interest, which shall be credited to the member’s account annually on June 30 of each fiscal year, by multiplying the member’s accumulated account balance in the supplemental benefit component on June 30 of the preceding fiscal year by the regular interest rate.
(3) (a) Member contributions and employer contributions as provided by subsection (2)(a) to (d) of this section shall be credited to the member’s account at least monthly as contributions are reported and posted to the system in accordance with KRS § 161.560.
(b) No employer contributions or interest shall be provided to a member who has taken a refund of his or her accumulated account balance as provided by KRS
161.470 or who has retired and annuitized his or her accumulated account balance as authorized by this section.
(4) (a) Upon termination of employment, a member who has less than five (5) years of service credited under KRS § 161.500, who elects to take a refund of his or her accumulated account balance as provided by KRS § 161.470, shall forfeit the accumulated employer contribution, and shall only receive a refund of his or her accumulated contributions.
(b) Upon termination of employment, a member who has five (5) or more years of service credited under KRS § 161.500, who elects to take a refund of his or her accumulated account balance as provided by KRS § 161.470, shall receive a full refund of his or her accumulated account balance.
(5) A nonuniversity member eligible to retire under KRS § 161.600(2) may upon retirement, in addition to the other benefits provided by KRS § 161.620, elect to:
(a) Have his or her accumulated account balance in the supplemental benefit
component annuitized into a lifetime monthly retirement allowance by the system in accordance with the actuarial assumptions and actuarial methods adopted by the board for the supplemental benefit component and in effect on the member’s retirement date;
(b) Receive the actuarial equivalent of his or her retirement allowance calculated under paragraph (a) of this subsection payable under one (1) of the options established by the board pursuant to KRS § 161.630;
(c) Take a distribution of the accumulated account balance in the supplemental benefit component over a period certain as authorized by the board; or
(d) Take a full or partial refund of his or her accumulated account balance as provided by KRS § 161.470.
A member participating in the supplemental benefit component shall not be required to take a distribution or annuitize his or her accumulated account balance in the supplemental benefit component when he or she begins drawing a retirement allowance from the foundational benefit component and may instead choose to begin drawing a distribution or annuitize his or her accumulated account balance in the supplemental benefit component at any date following his or her retirement date from the foundational benefit component.
(6) This section only applies to individuals who become nonuniversity members of the
Teachers’ Retirement System on or after January 1, 2022.
(7) The board of trustees shall have the authority to utilize or establish any plan or plans authorized under the Internal Revenue Code to provide the benefits set forth in this section.
Effective: January 1, 2022
History: Created 2021 Ky. Acts ch. 157, sec. 3, effective January 1, 2022.
(2) The supplemental benefit component shall provide a benefit based upon a member’s accumulated account balance which shall include:
Terms Used In Kentucky Statutes 161.635
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Year: means calendar year. See Kentucky Statutes 446.010
(a) Mandatory contributions made by the member as provided by KRS
161.540(1)(c)2.;
(b) Voluntary contributions made by the member, which may include lump-sum payments;
(c) Mandatory contributions made by the employer as provided by KRS
161.550(1)(d)2.;
(d) Voluntary employer contributions; and
(e) Regular interest, which shall be credited to the member’s account annually on June 30 of each fiscal year, by multiplying the member’s accumulated account balance in the supplemental benefit component on June 30 of the preceding fiscal year by the regular interest rate.
(3) (a) Member contributions and employer contributions as provided by subsection (2)(a) to (d) of this section shall be credited to the member’s account at least monthly as contributions are reported and posted to the system in accordance with KRS § 161.560.
(b) No employer contributions or interest shall be provided to a member who has taken a refund of his or her accumulated account balance as provided by KRS
161.470 or who has retired and annuitized his or her accumulated account balance as authorized by this section.
(4) (a) Upon termination of employment, a member who has less than five (5) years of service credited under KRS § 161.500, who elects to take a refund of his or her accumulated account balance as provided by KRS § 161.470, shall forfeit the accumulated employer contribution, and shall only receive a refund of his or her accumulated contributions.
(b) Upon termination of employment, a member who has five (5) or more years of service credited under KRS § 161.500, who elects to take a refund of his or her accumulated account balance as provided by KRS § 161.470, shall receive a full refund of his or her accumulated account balance.
(5) A nonuniversity member eligible to retire under KRS § 161.600(2) may upon retirement, in addition to the other benefits provided by KRS § 161.620, elect to:
(a) Have his or her accumulated account balance in the supplemental benefit
component annuitized into a lifetime monthly retirement allowance by the system in accordance with the actuarial assumptions and actuarial methods adopted by the board for the supplemental benefit component and in effect on the member’s retirement date;
(b) Receive the actuarial equivalent of his or her retirement allowance calculated under paragraph (a) of this subsection payable under one (1) of the options established by the board pursuant to KRS § 161.630;
(c) Take a distribution of the accumulated account balance in the supplemental benefit component over a period certain as authorized by the board; or
(d) Take a full or partial refund of his or her accumulated account balance as provided by KRS § 161.470.
A member participating in the supplemental benefit component shall not be required to take a distribution or annuitize his or her accumulated account balance in the supplemental benefit component when he or she begins drawing a retirement allowance from the foundational benefit component and may instead choose to begin drawing a distribution or annuitize his or her accumulated account balance in the supplemental benefit component at any date following his or her retirement date from the foundational benefit component.
(6) This section only applies to individuals who become nonuniversity members of the
Teachers’ Retirement System on or after January 1, 2022.
(7) The board of trustees shall have the authority to utilize or establish any plan or plans authorized under the Internal Revenue Code to provide the benefits set forth in this section.
Effective: January 1, 2022
History: Created 2021 Ky. Acts ch. 157, sec. 3, effective January 1, 2022.