KRS 21.372: Limitations and exclusions on increases in final compensation for

members retiring on or after January 1, 2018 -- Exception for bona fide

promotion or career development -- Exclusion -- Determination by board

-- Administrative regulations -- Inapplicability to hybrid cash balance plan

participants.

(1) For purposes of this section:

(a) "Bona fide promotion or career advancement":

1. Means a professional advancement in substantially the same line of

work held by the member in the four (4) years immediately prior to

the final sixty (60) months preceding retirement or a change in

employment position based on the training, skills, education, or

expertise of the member that imposes a significant change in job

duties and responsibilities to clearly justify the increased

compensation to the member, including any circumstance when a

member is elected or appointed to another court within the Court of

Justice; and

2. Does not include any circumstance where a judge or justice

participating in the Judicial Retirement Plan takes a position of

employment with an employer participating in any of the other

state-administered retirement systems; and

(b) "Year" has the same meaning as in KRS 21.345(3).

(2) (a) For members retiring on or after January 1, 2018, the plan shall identify

any consecutive year utilized in determining the member's final

compensation in which the member's compensation increased at a rate of

ten percent (10%) or more over the member's compensation in the

immediately preceding year.

(b) Except as limited or excluded by subsections (3) and (4) of this section,

any amount of increase in compensation for a year identified under

paragraph (a) of this subsection that exceeds ten percent (10%) more

than the member's compensation from the immediately preceding year

shall not be used in the calculation of the member's final compensation

for the purposes of determining the member's monthly pension benefit

under KRS 21.400.

(c) If the member's final compensation is reduced for the purposes of

determining the member's pension benefit under KRS 21.400 as provided

by paragraph (b) of this subsection, the retirement system shall,

notwithstanding KRS 21.460 and as applicable, refund the member

contributions attributable to the reduction in creditable compensation.

(3) In order to ensure the prospective application of the potential reduction in

pension benefits as provided in subsection (2) of this section, only the

compensation earned by the retiring member on or after July 1, 2017, shall be

subject to reduction under subsection (2) of this section. Compensation earned

by the retiring member prior to July 1, 2017, shall not be subject to reduction

under subsection (2) of this section.

(4) Subsections (2) and (3) of this section shall not apply to increases that are the

direct result of a bona fide promotion or career advancement or to

compensation used in accordance with KRS 61.680(7) in which the member

does not have sixty (60) months of service in the Judicial Retirement Plan.

(5) The board of trustees shall determine whether increases in compensation

during the final sixty (60) months preceding retirement constitute a bona fide

promotion or career advancement and may promulgate administrative

regulations in accordance with KRS Chapter 13A to administer this section. All

state-administered retirement systems shall cooperate to implement this

section.

(6) This section shall not apply to employees participating in the hybrid cash

balance plan as provided by KRS 21.402.