KRS 161.633: Foundational component for persons who became nonuniversity members

on or after January 1, 2022 -- Valuation assessment -- Adjustments to maintain

funding level and contain costs -- Construction.

(1) Individuals who become nonuniversity membe rs of the Teachers' Retirement

System on or after January 1, 2022, shall be provided a foundational plan, which

shall be known as the foundational benefit component, a supplemental benefit

component established by KRS 161.635, and retiree health benefits a s provided by

KRS 161.675. For purposes of this section, the foundational benefit component

includes all benefits provided by KRS 161.220 to 161.716 for individuals who

become nonuniversity members of the Teachers' Retirement System on or after

January 1, 2022, with the exception of the supplemental benefit component

established by KRS 161.635 and retiree health benefits established by KRS

161.675.

(2) Notwithstanding KRS 161.220 to 161.716, the actuary designated by the board of

trustees under KRS 161.400 shall, as part of the annual valuation of the pension

fund, assess the funding levels, unfunded liabilities, and the actuarially required

employer contribution rates payable solely on behalf of individuals who first

become nonuniversity members on or after January 1, 2022. Computation of the

employer contribution rate payable shall be based upon amortizing unfunded

liabilities using the level-dollar amortization method.

(3) If, on the basis of the valuation assessment required under subsection (2) of this

section, the funding level for the foundational benefit component payable on behalf

of individuals who first become nonuniversity members on or after January 1, 2022,

falls below ninety percent (90%), the board shall, notwithstanding any other

provision of KRS 161.220 to 161.716 to the contrary, make one (1) or more of the

following changes to maintain the funding level and to contain pension and life

insurance benefit costs within the maximum statutory employer contribution rate for

the foundational benefit component of eight percent (8%) of annual compensation

as provided by KRS 161.550(1)(d)1.:

(a) Utilize moneys from the stabilization reserve account for nonuniversity

membership and employers established by KRS 161.420(10)(a);

(b) Utilize prospective mand atory employee and employer contributions to the

supplemental benefit component as provided by KRS 161.635 to provide

funding for the foundational benefit component; or

(c) Prospectively adjust for individuals who become nonuniversity members on or

after J anuary 1, 2022, one (1) or more of the following parts of the

foundational benefit component:

1. Regular interest rate established by KRS 161.220(13)(c);

2. The retirement factors established by KRS 161.620(1)(f);

3. The age and service requirements to re tire as established by KRS

161.600(2);

4. The cost-of-living adjustment established by KRS 161.620(2); or

5. The age and service requirements and the retirement allowance provided

during the entitlement period under KRS 161.661.

Notwithstanding any other provision of KRS 161.220 to 161.716 to the

contrary, the board of trustees may utilize any and all of the above adjustments

at any time on all individuals who become nonuniversity members on or after

January 1, 2022, in order to maintain the funding level of the foundational

benefit component and employer costs as provided by this subsection.

(4) For purposes of this section, "funding level" means the actuarial value of assets

divided by the actuarially accrued liability expressed as a percentage that is

determined and reported by the system's actuary in the system's actuarial valuation.

(5) This section shall only apply to individuals who became nonuniversity members of

the Teachers' Retirement System on or after January 1, 2022.

(6) The provisions of this section shall not be construed to authorize the board to

retroactively restore benefits or el igibility for benefits in the foundational benefit

component or supplemental benefit that were previously reduced by the board

pursuant to subsection (3)(b) and (c) of this section.