KRS 6.505: Election to participate -- Amendment of benefits and rights -- Contribution --

Effect on membership in other retirement plans -- Repurchase of Kentucky

Employees Retirement System credit lost by refund.

(1) (a) Each legislator in office on July 1, 1980, may within thirty (30) days after that

date, and any legislator thereafter taking office may within thirty (30) days

after the date thereof, elect to make monthly contributions to the Legislators'

Retirement Plan, in an amount equal to five perce nt (5%) of his or her

monthly creditable compensation, as defined in KRS 61.510(13). The election

shall be effective to establish membership in the plan as of July 1, 1980, or as

of the date from which the thirty (30) day period is measured, as the case ma y

be. Provided, however, that any legislator who was in office on July 1, 1980,

and who is in office at the time he or she makes the election may, after the

expiration of the thirty (30) day period and until May 1, 1982, make the

election, in which event h e or she shall pay to the Legislators' Retirement

Plan, for the months between July 1, 1980, and the date of his or her election

such sum as, when added to any member's contribution by him or her that is

transferred from another retirement system under KRS 6.535, will equal the

member's contribution required by this section. If the member makes his or

her election after February 1, 1981, he or she shall in addition pay to the plan

interest on the foregoing sum, at six percent (6%) per annum, calculated as i f

the sum consisted of equal monthly payments, one (1) of which was due at the

end of each month between July 1, 1980, and the date the election was made.

The election shall be addressed to and filed with the secretary of the Finance

and Administration Cab inet and shall constitute an authorization to the

secretary to thereafter cause to be deducted from the member's monthly

creditable compensation an amount equal to five percent (5%) thereof, as a

voluntarily elected contribution by the member towards the f unding of the

Legislators' Retirement Plan.

(b) 1. For a member who begins participating in the Legislators' Retirement

Plan prior to January 1, 2014, the election shall operate to create an

inviolable contract between such member and the Commonwealth,

guaranteeing to and vesting in the member the rights and benefits

provided for under KRS 6.515 to 6.530.

2. a. For members who begin participating in the Legislators'

Retirement Plan on or after January 1, 2014, the General Assembly

reserves the right to amen d, suspend, or reduce the benefits and

rights provided under KRS 6.500 to 6.577 if, in its judgment, the

welfare of the Commonwealth so demands, except that the amount

of benefits the member has accrued at the time of amendment,

suspension, or reduction shall not be affected.

b. For purposes of this subparagraph, the amount of benefits the

member has accrued at the time of amendment, suspension, or

reduction shall be limited to the accumulated account balance the

member has accrued at the time of amendment, suspension, or

reduction.

c. The provisions of this subsection shall not be construed to limit the

General Assembly's authority to change any other benefit or right

specified by KRS 6.500 to 6.577, for members who begin

participating in the Legislators' Retirement Plan on or after January

1, 2014, except the benefits specified by subparagraph 2.b. of this

paragraph.

3. The provisions of this paragraph shall not be construed to limit the

General Assembly's authority to amend, reduce, or suspend the benefits

and rights of members of the Legislators' Retirement Plan as provided by

KRS 6.500 to 6.577 that the General Assembly had the authority to

amend, reduce, or suspend, prior to July 1, 2013.

(c) An election once made under this section either to participate or not to

participate in the Legislators' Retirement Plan, shall be considered to apply to

all future service as a legislator, whether in the same or a different office as a

legislator, and whether or not it is in successive terms.

(d) Notwithstanding the provisions of this subsection:

1. A legislator who becomes a member of the Legislators' Retirement Plan

on or after September 1, 2008, but prior to January 1, 2014, shall make

monthly contributions to the Legislators' Retirement Plan in an amount

equal to six percent (6%) of his or her monthly creditable compensation,

as defined in KRS 61.510(13);

2. A legislator who becomes a member of the Legislators' Retirem ent Plan

on or after January 1, 2014, shall make monthly contributions to the

Legislators' Retirement Plan in an amount equal to six percent (6%) of

his or her monthly creditable compensation, as defined in KRS

61.510(13), of which:

a. Five percent (5%) of his or her monthly creditable compensation,

as defined in KRS 61.510(13), shall be used to provide funding for

benefits provided under KRS 21.402; and

b. One percent (1%) of his or her monthly creditable compensation,

as defined in KRS 61.510(13), shall b e used exclusively to help

fund retiree health benefits as provided by KRS 6.577 and shall not

be refunded to the member if the member withdraws his or her

accumulated account balance as provided by KRS 21.460. The

amounts deducted under this subdivision s hall be credited to an

account established pursuant to 26 U.S.C. sec. 401(h), within the

fund established by KRS 6.530.

(2) A legislator entitled to elect membership in the retirement system who failed to

elect membership within thirty (30) days after taki ng office may elect membership

not later than August 31, 2005. An election, upon being made pursuant to this

section, shall operate to create an inviolable contract between the member entitled

to elect membership under this subsection and the Commonwealth, guaranteeing to

and vesting in the member the rights and benefits provided for under the terms and

conditions of KRS 6.500 to 6.577.

(3) When any legislator makes a delayed election of membership in the Legislators'

Retirement Plan under subsection (2) of this section, his or her active membership

in the Kentucky Employees Retirement System shall terminate, as of the date his or

her membership in the Legislators' Retirement Plan becomes effective, and any

credit in the Kentucky Employees Retirement System, earned for service as a

legislator, which he or she then has or which he or she subsequently regains while

being an active member of the Legislators' Retirement Plan, shall be transferred to

and counted as service credit in the Legislators' Retirement Plan, and shall no longer

constitute credit in the Kentucky Employees Retirement System, except for the

purpose of validating any other credit in that system if the member pays the

difference, if any, between the amount transferred from the Kentucky Employees

Retirement System and the actuarial value of the transferred service. However, any

credit he or she then has in the Kentucky Employees Retirement System, earned for

service in any capacity other than a legislator, shall not be affected. No person may

attain credit in more than one (1) of the retirement plans or systems mentioned in

this section for the same period of service. When credit is transferred from the

Kentucky Employees Retirement System to the Legislators' Retirement Plan, the

Kentucky Employees Retirement System shall transfer to the Legislators'

Retirement Fund an amount equal to the employee's and employer's contributions

attributable to that credit, together with interest on the contributions from the date

made to the date of transfer at the actuarially assumed interest rate of the Kentucky

Employees Retirement System in effect at the time the contributions were made,

compounded annually at that same interest rate.

(4) The state shall, solely for the purpose of compliance with Section 414(h) o f the

United States Internal Revenue Code, pick up the employee contributions required

by this section for all compensation earned after August 1, 1982, and the

contributions so picked up shall be treated as employer contributions in determining

tax treatment under the United States Internal Revenue Code and KRS 141.010. The

picked-up employee contribution shall satisfy all obligations to the retirement

system satisfied prior to August 1, 1982, by the employee contribution, and the

picked-up employee contribution shall be in lieu of an employee contribution. The

state shall pay these picked -up employee contributions from the same source of

funds which is used to pay earnings to the employee. The employee shall have no

option to receive the contributed amount s directly instead of having them paid by

the employer to the system. Employee contributions picked up after August 1, 1982,

shall be treated for all purposes of KRS 6.500 to 6.535 in the same manner and to

the same extent as employee contributions made prior to August 1, 1982.

(5) When any legislator elects membership in the Legislators' Retirement Plan in

accordance with this section, his or her active membership in the Kentucky

Employees Retirement System, State Police Retirement System, County Employees

Retirement System, or Teachers' Retirement System shall terminate, as of the date

his or her membership in the Legislators' Retirement Plan becomes effective, and

any credit in such other system or systems, earned for service as a legislator, which

he or she then has or which he or she subsequently regains while being an active

member of the Legislators' Retirement Plan, shall be transferred to and counted as

service credit in the Legislators' Retirement Plan, and shall no longer constitute

credit in such other retirement system except for the purpose of validating any other

credit in that system. However, any credit he or she then has in such other

retirement system, earned for service in any capacity other than a legislator, shall

not be affected. No pers on may attain credit in more than one (1) of the retirement

plans or systems mentioned in this section, for the same period of service.

(6) A member of the Legislators' Retirement Plan who would be entitled, under KRS

61.552, to repurchase credit in the Ke ntucky Employees Retirement System, for

previous service as a legislator, which credit had been lost by refund of

contributions, may pay the amount required by KRS 61.552 directly to the

Legislators' Retirement Plan and thereby obtain credit in that plan f or such service,

rather than making payment to the Kentucky Employees Retirement System for

credit which would be transferred to the Legislators' Retirement Plan. In such event,

the Kentucky Employees Retirement System shall transfer to the Legislators'

Retirement Plan an amount equal to the employer's contributions that originally

were made to the Kentucky Employees Retirement System for the regained service

credit, with interest as provided in KRS 6.535. Six (6) months' current service shall

be required in the Legislators' Retirement Plan in order for the repurchased credit to

remain in force, the same as provided in KRS 61.552. Service purchased under this

subsection on or after January 1, 2014, shall not be used to determine the member's

participation date in the Legislators' Retirement Plan.