KRS 161.605: Resumption of employment by retired member -- Continuation of

retirement allowance -- Individuals who retire and are reemployed -- Part-

time, substitute teaching, and nonteaching employment -- Health insurance

coverage.

Any member retired by reason of service may return to work in a position covered by the

Kentucky Teachers' Retirement System and continue to receive his or her retirement

allowance under the following conditions:

(1) Any member who is retired with thirty (30) or more ye ars of service may return to

work in a full -time or a part -time position, or in a position providing substitute

teaching service, covered by the Teachers' Retirement System and earn up to a

maximum of seventy-five percent (75%) of the member's last annual compensation

measured on a daily rate to be determined by the board of trustees. For purposes of

determining whether the salary of a member returning to work is seventy -five

percent (75%) or less of the member's last annual compensation, all remuneration

paid and benefits provided to the member, on an actual dollar or fair market value

basis as determined by the retirement system, excluding employer-provided medical

insurance required under subsection (4) of this section, shall be considered.

Members who were retired on or before June 30, 2002, shall be entitled to return to

work under the provisions of this section as if they had retired with thirty (30) years

of service. Nonqualified service credit purchased under the provisions of KRS

161.5465 or elsewher e with any state -administered retirement system shall not be

used to meet the thirty (30) year requirement set forth in this subsection. Out -of

state teaching service provided in public schools for kindergarten through grade

twelve (12) may count toward th e thirty (30) year requirement set forth in this

subsection even if it is not purchased as service credit, if the member obtains from

his or her out -of-state employer certification of this service on forms prescribed by

the retirement system;

(2) Any member who is retired with less than thirty (30) years of service after June 30,

2002, may return to work in a full -time or part -time position, or in a position

providing substitute teaching service, covered by the Teachers' Retirement System

and earn up to a m aximum of sixty-five percent (65%) of the member's last annual

compensation measured on a daily rate to be determined by the board of trustees.

For purposes of determining whether the salary of a member returning to work is

sixty-five percent (65%) or less of the member's last annual compensation, all

remuneration paid and benefits provided to the member, on an actual dollar or fair

market value basis as determined by the retirement system, excluding employer -

provided medical insurance required under subsec tion (4) of this section, shall be

considered;

(3) Under this section, an employer may employ full-time a number of retired members

not to exceed ten percent (10%) of the membership actively employed full -time by

that employer. The board of trustees may re duce this ten percent (10%) cap upon

recommendation of the retirement system's actuary if a reduction is necessary to

maintain the actuarial soundness of the retirement system. The board of trustees

may increase the ten percent (10%) cap upon a determinati on that an increase is

warranted to help address a shortage in the number of available teachers and upon

the determination of the retirement system's actuary that the proposed cap increase

allows the actuarial soundness of the retirement system to be maint ained. For

purposes of this subsection, "full -time" means the same as defined by KRS

161.220(21). A local school district may exceed the quota established by this

subsection by making an annual written request to the Kentucky Department of

Education which the department may approve on a year-by-year basis;

(4) (a) Except as provided by subsection (9) of this section, a retired member

returning to work in a full -time or part -time position, or in a position

providing substitute teaching service under subsecti on (1) or (2) of this

section, shall contribute to an account with the retirement system that shall be

administered independently from and with no reciprocal impact with the

member's original retirement account, or any other account from which the

member is eligible to draw a retirement allowance.

(b) Except as provided by subsection (9) of this section, a retired member

returning to work under subsection (1) or (2) of this section shall make

contributions to the retirement system at the rate provided under KRS

161.540. The new account shall independently meet all vesting requirements

as well as all other conditions set forth in KRS 161.600(1) or (2), as

applicable, before any retirement allowance is payable from this account. The

retirement allowance accrui ng under this new account shall be calculated

pursuant to KRS 161.620. This new account shall not entitle the member to a

duplication of the benefits offered under KRS 161.620(7) or 161.675, nor

shall this new account provide the benefits offered by KRS 16 1.520, 161.525,

161.620(3), 161.655, 161.661, or 161.663.

(c) A retired member returning to work for an employer that participates in a

state-administered retirement system shall waive his or her medical insurance

with the Teachers' Retirement System durin g the period of reemployment and

shall receive the medical insurance coverage that is offered by the member's

active employer. If medical insurance coverage is not available from the

employer, the Kentucky Teachers' Retirement System may provide coverage

for the member.

(d) A retired member returning to work under subsection (1) or (2) of this section

shall not be eligible to purchase service credit for any service provided after

the member's effective date of retirement but prior to the date that the membe r

returns to work. A member returning to work under subsection (1) or (2) of

this section shall not be eligible to purchase service credit that the member

would have otherwise been eligible to purchase prior to the member's initial

retirement.

(e) A retired member who returns to work under subsection (1) or (2) of this

section, or in the event of the death of the member, the member's estate or

applicably designated beneficiary, shall be entitled, within ninety (90) days of

the posting of the annual report submitted by the employer, to a refund of

contributions as permitted and limited by KRS 161.470;

(5) The board of trustees may annually, on July 1, adjust the current daily rate of a

member's last annual compensation, for each full twelve (12) month period that has

elapsed subsequent to the member earning his or her last annual compensation, by

the percentage increase in the annual average of the consumer price index for all

urban consumers for the calendar year preceding the adjustment as published by the

Federal Bureau of Labor Statistics, not to exceed five percent (5%) annually. Each

annual adjustment shall become part of the member's daily rate base. Failure to

comply with the salary limitations set forth in subsections (1) and (2) of this sectio n

as may be adjusted by this subsection shall result in a reduction of the member's

retirement allowance or any other benefit to which the member would otherwise be

entitled on a dollar -for-dollar basis for each dollar that the member exceeds these

salary limitations, and the member shall be refunded his or her retirement

contributions made on the compensation that exceeds these salary limitations.

Notwithstanding any other provision of law to the contrary, a member retiring from

a local school district who returns to work for a local school district under

subsection (1) or (2) of this section shall be entitled, without any reduction to his or

her retirement allowance or any other retirement benefit, to earn a minimum

amount equal to two hundred dollars ($200) per day;

(6) (a) A retired member returning to work under subsection (1) or (2) of this section

shall have separated from service for a period of at least one (1) year if

returning to work for the same employer on a full-time basis, and at least three

(3) months if returning to work for a different employer on a full -time basis.

A retired member returning to work under subsection (1) or (2) of this section

on a part -time basis shall have separated from service for a period of at least

three (3) months before returning to work for any employer.

(b) A retired member who is returning to work for an employer that has

employees who participate in the Teachers' Retirement System shall comply

with the separation -from-service requirements in this subsection befor e

performing any service for the employer, regardless of whether the retired

member is providing service in a position covered by the Teachers'

Retirement System.

(c) The starting date for any separation from service required under this

subsection shall be the effective date of the member's retirement.

(d) The separation -from-service requirements of this subsection are not met if

there is a prearranged agreement between the member and an employer that

has employees who participate in the Teachers' Retiremen t System prior to

retirement for the member to work for the employer after retirement.

(e) The Teachers' Retirement System may require the member and the employer

for which the member is returning to work to certify in writing on a form

prescribed by the Teachers' Retirement System that no prearranged agreement

was or will be entered into between the member and employer prior to

retirement for the member to work for the employer after retirement.

(f) Failure to comply with the separation -from-service requir ements in this

subsection voids a member's retirement and the member shall be required to

return all the retirement benefits he or she received, with interest, for the

period of time that the member returned to work without a sufficient

separation from service;

(7) (a) Effective July 1, 2004, local school districts may employ retired members in

full-time or part -time teaching or administrative positions in critical shortage

areas without limitation on the compensation of the retired members that is

otherwise required by subsections (1) and (2) of this section. The number of

retired members that a local school district may employ under this subsection

shall be no more than four (4) members per local school district or ten percent

(10%) of the total active mem bers employed by the local school district on a

full-time basis as defined under KRS 161.220(21), whichever number is

greater. Retired members returning to work under this subsection shall be

subject to the separation-from-service requirements set forth in subsection (6)

of this section. Retired members returning to work under this subsection shall

waive their medical insurance coverage with the retirement system during

their period of reemployment and receive medical insurance coverage that is

offered by the member's active employer. Retired members returning to work

under this subsection shall contribute to an account subject to the conditions

set forth in subsection (4) of this section. Retired members returning to work

under this subsection shall make co ntributions to the retirement system at the

rate provided under KRS 161.540. The employer shall make contributions at

the rate provided under KRS 161.550. Local school districts shall make

annual payments to the retirement system on the compensation paid t o the

reemployed retirees at the rates determined by the retirement system's actuary

that reflect any accrued liability resulting from the reemployment of these

members.

(b) The Department of Education may employ retired members in full -time or

part-time t eaching or nonteaching positions without the limitations on

compensation otherwise required by subsections (1) and (2) of this section to

fill critical shortage areas in the schools it operates, including the Kentucky

School for the Blind and the Kentucky School for the Deaf, and to serve on

audit teams. The department shall be subject to the same requirements as local

school districts as provided in paragraph (a) of this subsection, except the

Teachers' Retirement System shall determine the maximum number of

employees that may be employed under this paragraph;

(8) The return -to-work limitations set forth in this section shall apply to retired

members who are returning to work in the same position from which they retired, or

a position substantially similar to the one from which they retired, or a position

described in KRS 161.046 or any position listed in KRS 161.220(4) which requires

membership in the retirement system. Positions which generally require

certification or graduation from a four (4) year colle ge or university as a condition

of employment which are created, or changed to remove the position from coverage

under KRS 161.220(4) are also subject to the return to work limitations set forth in

this section. The board of trustees shall determine whethe r employment in a

nonteaching position is subject to this subsection;

(9) (a) Notwithstanding the provisions of this section, individuals who become

members on or after January 1, 2022, who subsequently retire and begin

drawing a monthly lifetime retiremen t allowance from the Teachers'

Retirement System, who following retirement are reemployed with an

employer participating in the Teachers' Retirement System, shall not be

eligible to contribute to or earn benefits in a second retirement account in the

Teachers' Retirement System during the period of reemployment.

(b) The provisions of subsections (1) to (7) of this section are not subject to KRS

161.714;

(10) Retired members may be employed in a part -time teaching capacity by an agency

described in KRS 161.2 20(4)(b) or (n), not to exceed the equivalent of twelve (12)

teaching hours in any one (1) fiscal year. Retired members may be employed for a

period not to exceed the equivalent of one hundred (100) days in any one (1) fiscal

year in a part -time administrative or nonteaching capacity by an agency described

in KRS 161.220(4)(b) or (n) in a position that would otherwise be covered by the

retirement system. Except as otherwise provided by this subsection, the return to

work provisions set forth in subsections (1) to (7) of this section shall not apply to

retired members who return to work solely for an agency described in KRS

161.220(4)(b) or (n). Calculation of the number of days and teaching hours for part -

time teaching, substitute teaching, or part -time empl oyment in a nonteaching

capacity under this section shall not exceed the ratio between a school year and the

actual months of retirement for the member during that school year. The board of

trustees by administrative regulation may establish fractional equ ivalents of a day

of teaching service. Any member who exceeds the twelve (12) hour or one hundred

(100) day limitations of this subsection shall be subject to having his or her

retirement voided and be required to return all retirement allowances and other

benefits paid to the member or on the member's behalf since the effective date of

retirement. In lieu of voiding a member's retirement, the system may reduce the

member's retirement allowance or any other benefit to which the member would

otherwise be ent itled on a dollar -for-dollar basis for each dollar of compensation

that the member earns in employment exceeding twelve (12) hours, one hundred

(100) days, or any apportionment of the two (2) combined. Retired members

returning to work for an employer desc ribed in KRS 161.220(4)(b) or (n) shall

comply with the separation -from-service requirements of subsection (6) of this

section;

(11) When a retired member returns to employment in a part -time teaching capacity or

in a nonteaching capacity as provided in su bsection (10) of this section, the

employer shall contribute annually to the retirement system on the compensation

paid to the retired member at rates determined by the retirement system actuary that

reflect accrued liability for retired members who return to work under subsection

(10) of this section; and

(12) For retired members who return to work during any one (1) fiscal year in both a

position described in KRS 161.220(4)(b) or (n) and in a position described under

another provision under KRS 161.220(4) , and for retired members who return to

work in a position described under KRS 161.220(4)(b) or (n) in both a teaching and

an administrative or nonteaching capacity, the board of trustees shall adopt a

methodology for a pro rata apportionment of days and h ours that the retired

member may work in each position.

(13) Notwithstanding any other provision of KRS 161.220 to 161.716 to the contrary, an

annuitant who has returned to work following retirement with an employer that

does not participate in the state -administered retirement systems shall not be

required to take health insurance coverage through the employer and the system

shall continue to provide health insurance coverage and benefits to the annuitant

during the period of employment, except as may be r equired by the Medicare

Secondary Payer Act under 42 U.S.C. sec. 1395y(b).

(14) Any member retired by reason of service may waive his or her annuity and return to

full-time employment in a Teachers' Retirement System -covered position that is on

the certified salary schedule under the following conditions:

(a) The member shall:

1. Receive no annuity payments while employed in a full -time position

described in this subsection;

2. Make contributions on the salaries received for the service in a full -time

position;

3. If employed for at least one (1) consecutive contract year in a full -time

position, have his or her retirement annuity recalculated as provided in

the regular retirement formula in KRS 161.620(1), except that,

regardless of salaries earned during w aiver, a monthly retirement

allowance recalculated under this paragraph shall not be increased by

more than ten percent (10%) per full contract year of waiver worked or a

prorated percentage for a year during waiver when less than a full

contract year was worked. The recalculated retirement allowance shall

be less any applicable actuarial discount applied to the original

retirement allowance due to the election of a joint and last survivor

option; and

4. Waive his or her medical insurance coverage with the Teachers'

Retirement System during the period of reemployment and instead shall

receive the medical insurance coverage that is generally offered by the

member's active employer;

(b) 1. The member's estate or, if there is a beneficiary applicably designated

by the member, then the beneficiary, shall continue to be eligible for life

insurance benefits as provided in KRS 161.655.

2. Retirement option, plan account type, and beneficiary designation on

original retirement shall not be altered by postretirement employment

under this subsection, and dependents and spouses of the members shall

not become eligible for benefits under KRS 161 .520, 161.525, or

161.661 due to postretirement employment;

(c) 1. When a member returns to a full -time position described in this

subsection and as provided in paragraph (a) of this subsection, the

employer is required to withhold and remit regular retire ment

contributions.

2. The member shall be returned to the annuity rolls on July 1 following

completion of the contract year or on the first day of the month

following the month of termination of service. A member shall not be

returned to the annuity rolls until after he or she has filed a retirement

application in compliance with KRS 161.600(6). Any discounts applied

at the time of the original retirement due to service or age may be

reduced or eliminated in the recalculation subject to the ten percent

(10%) cap in paragraph (a) of this subsection; and

(d) A member retired by reason of service who has been employed the equivalent

of twenty -five (25) days or more during a school year under KRS 161.605

may waive the member's retirement annuity and return to a position described

in this subsection during that school year a maximum of one (1) time during

any five (5) year period, beginning with that school year.