Kentucky Statutes 78.5532 – Death before retirement — Beneficiary’s options — Taxable distributions — Injuries connected with performance of duty
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(1) If a member dies prior to the first day of the month in which the member would have received his or her first retirement allowance, the member’s beneficiary shall be eligible for the benefits provided by this section if the member had on file a written designation of a beneficiary with the retirement office as provided by KRS § 61.542 and the member met the following conditions at the date of his or her death:
(a) 1. The member had service in a nonhazardous position and was eligible to retire under KRS § 78.5510(2) or (3) or 78.5512(6); or
2. The member had service in a hazardous position and was eligible to retire under KRS § 78.5514(2) or (3) or 78.5516(6);
(b) The member was in active employment or on authorized leave of absence with five (5) or more years of service credit and died prior to his or her normal retirement date or in the case of a nonhazardous member, was normal retirement age or older and had at least four (4) years of service credit; or
(c) The member was not in active employment or on authorized leave of absence with twelve (12) or more years of service credit and died prior to his or her normal retirement date.
(2) If the beneficiary eligible for benefits as provided in subsection (1) of this section is a single person, then the beneficiary may elect to receive:
(a) A monthly benefit payable for the life of the beneficiary that is equal to the benefit that would have been paid had the member retired immediately prior to his or her date of death and elected to receive benefits payable under the survivorship one hundred percent (100) option as provided in KRS § 61.635(2);
(b) A monthly benefit payable for the life of the beneficiary under the beneficiary Social Security adjustment option as provided in KRS
61.635(9) that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection;
(c) A monthly benefit payable for a period of sixty (60) months that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection;
(d) A monthly benefit payable for a period of one hundred twenty (120) months that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection;
(e) If the member began participating prior to January 1, 2014, a monthly benefit payable for a period of one hundred twenty (120) months that is equivalent to the benefit the member would have been entitled to receive based on his or her years of service and final compensation at the date of his or her death reduced by the survivorship fifty percent (50) factor as provided for in KRS § 61.635(4), then reduced by fifty percent (50), and that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection; or
(f) The higher of a refund of the member’s accumulated account balance as
described in KRS § 61.625(1) or one (1) time lump-sum payment which shall be the actuarial equivalent of the amount payable under paragraph (a) of this subsection for a period of sixty (60) months.
(3) If the beneficiary eligible for benefits as provided by subsection (1) of this section is multiple beneficiaries or a trust, then the multiple beneficiaries by consensus or the trustee may elect to receive the actuarial equivalent amounts payable under subsection (2)(c), (d), (e), or (f) of this section using the assumption that the beneficiary’s age is the same as the member’s age.
(4) If the beneficiary eligible for benefits as provided in subsection (1) of this section is the member’s estate, then the beneficiary shall receive the higher of a refund of the member’s accumulated account balance as described in KRS
61.625(1) or the one (1) time lump-sum payment payable under subsection (2)(f) of this section, using the assumption that the beneficiary’s age is the same as the member’s age.
(5) Payments of taxable distributions made pursuant to this section shall be subject to state and federal income tax as appropriate.
(6) (a) The beneficiary of a member with service in a nonhazardous position who dies as a result of a duty-related injury may be eligible for benefits based upon the definitions, criteria, and benefits specified by KRS § 61.621.
(b) The beneficiary of a member with service in a hazardous position who dies as a direct result of an act in line of duty may be eligible for benefits from the system based upon the definitions, criteria, and benefits specified by KRS § 78.5534.
Effective:April 1, 2021
History: Created 2021 Ky. Acts ch. 102, sec. 12, effective April 1, 2021.
(a) 1. The member had service in a nonhazardous position and was eligible to retire under KRS § 78.5510(2) or (3) or 78.5512(6); or
Terms Used In Kentucky Statutes 78.5532
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Month: means calendar month. See Kentucky Statutes 446.010
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Trustee: A person or institution holding and administering property in trust.
2. The member had service in a hazardous position and was eligible to retire under KRS § 78.5514(2) or (3) or 78.5516(6);
(b) The member was in active employment or on authorized leave of absence with five (5) or more years of service credit and died prior to his or her normal retirement date or in the case of a nonhazardous member, was normal retirement age or older and had at least four (4) years of service credit; or
(c) The member was not in active employment or on authorized leave of absence with twelve (12) or more years of service credit and died prior to his or her normal retirement date.
(2) If the beneficiary eligible for benefits as provided in subsection (1) of this section is a single person, then the beneficiary may elect to receive:
(a) A monthly benefit payable for the life of the beneficiary that is equal to the benefit that would have been paid had the member retired immediately prior to his or her date of death and elected to receive benefits payable under the survivorship one hundred percent (100) option as provided in KRS § 61.635(2);
(b) A monthly benefit payable for the life of the beneficiary under the beneficiary Social Security adjustment option as provided in KRS
61.635(9) that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection;
(c) A monthly benefit payable for a period of sixty (60) months that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection;
(d) A monthly benefit payable for a period of one hundred twenty (120) months that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection;
(e) If the member began participating prior to January 1, 2014, a monthly benefit payable for a period of one hundred twenty (120) months that is equivalent to the benefit the member would have been entitled to receive based on his or her years of service and final compensation at the date of his or her death reduced by the survivorship fifty percent (50) factor as provided for in KRS § 61.635(4), then reduced by fifty percent (50), and that is the actuarial equivalent to the amount computed under paragraph (a) of this subsection; or
(f) The higher of a refund of the member’s accumulated account balance as
described in KRS § 61.625(1) or one (1) time lump-sum payment which shall be the actuarial equivalent of the amount payable under paragraph (a) of this subsection for a period of sixty (60) months.
(3) If the beneficiary eligible for benefits as provided by subsection (1) of this section is multiple beneficiaries or a trust, then the multiple beneficiaries by consensus or the trustee may elect to receive the actuarial equivalent amounts payable under subsection (2)(c), (d), (e), or (f) of this section using the assumption that the beneficiary’s age is the same as the member’s age.
(4) If the beneficiary eligible for benefits as provided in subsection (1) of this section is the member’s estate, then the beneficiary shall receive the higher of a refund of the member’s accumulated account balance as described in KRS
61.625(1) or the one (1) time lump-sum payment payable under subsection (2)(f) of this section, using the assumption that the beneficiary’s age is the same as the member’s age.
(5) Payments of taxable distributions made pursuant to this section shall be subject to state and federal income tax as appropriate.
(6) (a) The beneficiary of a member with service in a nonhazardous position who dies as a result of a duty-related injury may be eligible for benefits based upon the definitions, criteria, and benefits specified by KRS § 61.621.
(b) The beneficiary of a member with service in a hazardous position who dies as a direct result of an act in line of duty may be eligible for benefits from the system based upon the definitions, criteria, and benefits specified by KRS § 78.5534.
Effective:April 1, 2021
History: Created 2021 Ky. Acts ch. 102, sec. 12, effective April 1, 2021.