KRS 61.505: Kentucky Public Pensions Authority -- Purpose -- Membership, vacancies,

compensation, and meetings -- Authority granted powers and privileges of

corporation -- Executive director, chief auditor, and employees -- Expenses --

Authorization of administrative expenses -- Duties of members.

(1) There is created an eight (8) member Kentucky Public Pensions Authority whose

purpose shall be to administer and operate:

(a) A single personnel system for the staffing needs of the Kentucky Retirement

Systems and the County Employees Retirement System;

(b) A system of accounting that is developed by the Authority for the Kentucky

Retirement Systems and the County Employees Retirement System;

(c) Day-to-day administrative needs of the Kentucky Retirement S ystems and the

County Employees Retirement System, including but not limited to:

1. Benefit counseling and administration;

2. Information technology and services, including a centralized website for

the Authority, the Kentucky Retirement Systems, and the C ounty

Employees Retirement System;

3. Legal services;

4. Employer reporting and compliance;

5. Processing and distribution of benefit payments, and other financial,

investment administration, and accounting duties as directed by the

Kentucky Retirement Systems board of trustees or the County

Employees Retirement System board of trustees;

6. All admi nistrative actions, orders, decisions, and determinations

necessary to carry out benefit functions required by the Kentucky

Retirement Systems and the County Employees Retirement System

statutes, including but not limited to administration of reduced and

unreduced retirement benefits, disability retirement, reemployment after

retirement, service purchases, computation of sick -leave credit costs,

correction of system records, qualified domestic relations orders, and

pension spiking determinations; and

7. Completing and compiling financial data and reports;

(d) Any jointly held assets used for the administration of the Kentucky

Retirement Systems and the County Employees Retirement System, including

but not limited to real estate, office space, equipment, and supplies;

(e) The hiring of a single actuarial consulting firm who shall serve both the

Kentucky Retirement Systems and the County Employees Retirement System;

(f) The hiring of a single external certified public accountant who shall perform

audits for bot h the Kentucky Retirement Systems and the County Employees

Retirement System;

(g) The promulgation of administrative regulations as an authority or on behalf of

the Kentucky Retirement Systems and the County Employees Retirement

System, individually or col lectively, provided such regulations are not

inconsistent with the provisions of this section and KRS 16.505 to 16.652,

61.505, 61.510 to 61.705, and 78.510 to 78.852, necessary or proper in order

to carry out the provisions of this section and duties auth orized by KRS

16.505 to 16.652 and 61.510 to 61.705;

(h) A system of contracting management for administrative services; and

(i) Other tasks or duties as directed solely or jointly by the boards of the

Kentucky Retirement Systems or the County Employees Retirement System.

(2) The eight (8) member Kentucky Public Pensions Authority shall be composed of

the following individuals:

(a) The chair of the Kentucky Retirement Systems board of trustees;

(b) The chair of the County Employees Retirement System board of trustees;

(c) The investment committee chair of the Kentucky Retirement Systems board

of trustees, unless the investment committee chair is also the chair of the

board of trustees in which case the chair of the Kentucky Retirement Systems

shall appoint an individual who serves on the investment committee;

(d) The investment committee chair of the County Employees Retirement System

board of trustees, unless the investment committee chair is also the chair of

the County Employees Retirement System board of trustees in which case the

chair of the County Employees Retirement System shall appoint an individual

who serves on the investment committee;

(e) Two additional (2) trustees of the Kentucky Retirement Systems board of

trustees selected by the chair of the Kentucky Retirement Systems board of

trustees of which one (1) shall be a trustee who was elected by the

membership of one (1) of the systems administered by Kentucky Retirement

Systems and one (1) shall be a trustee of Kentucky Retirement Systems who

was appointed by the Governor; and

(f) Two additional (2) trustees of the County Employees Retirement System

board of trustees selected by the chair of the County Employees Retirement

System board of trustees of which one (1) shall be a trustee who was electe d

by the membership of the County Employees Retirement System and one (1)

shall be a trustee of the County Employees Retirement System who was

appointed by the Governor.

(3) The Kentucky Public Pensions Authority is hereby granted the powers and

privileges of a corporation, including but not limited to the following powers:

(a) To sue and be sued in its corporate name;

(b) To make bylaws not inconsistent with the law and in accordance with its

duties as provided by this section;

(c) To conduct the business and promote the purposes for which it was formed;

(d) To carry out the obligations of the Authority subject to KRS Chapters 45,

45A, 56, and 57;

(e) To purchase fiduciary liability insurance; and

(f) The Kentucky Public Pensions Authority shall reimburse a ny Authority

member, officer, or employee for any legal expense resulting from a civil

action arising out of the performance of his or her official duties. The hourly

rate of reimbursement for any contract for legal services under this paragraph

shall not exceed the maximum hourly rate provided in the Legal Services

Duties and Maximum Rate Schedule promulgated by the Government

Contract Review Committee established pursuant to KRS 45A.705, unless a

higher rate is specifically approved by the secretary of th e Finance and

Administration Cabinet or his or her designee.

(4) Any vacancy which may occur in an appointed position on the Kentucky Public

Pensions Authority shall be filled in the same manner which provides for the

selection of the particular member of the Authority. No person shall serve in more

than one (1) position as a member of the Authority and if a person holds more than

one (1) position as a member of the Authority, he or she shall resign a position.

(5) (a) Membership on the Authority shall not be incompatible with any other office

unless a constitutional incompatibility exists. No Authority member shall

serve in more than one (1) position as a member of the Authority.

(b) An Authority member shall be removed from office upon conviction of a

felony or for a finding of a violation of any provision of KRS 11A.020 or

11A.040 by a court of competent jurisdiction.

(c) A current or former employee of the County Employees Retiremen t System,

Kentucky Retirement Systems, or the Kentucky Public Pensions Authority

shall not be eligible to serve as a member of the Authority.

(6) Kentucky Public Pensions Authority members who do not otherwise receive a

salary from the State Treasury shall receive a per diem of eighty dollars ($80) for

each day they are in session or on official duty, and they shall be reimbursed for

their actual and necessary expenses in accordance with state administrative

regulations and standards, except that the member s shall not receive a per diem or

receive reimbursements on the same day they receive a per diem or reimbursements

for service to the Kentucky Retirement Systems board of trustees or County

Employees Retirement Systems board of trustees.

(7) (a) The Authority shall meet at least once in each quarter of the year and may

meet in special session upon the call of the chair or the executive director of

the Authority.

(b) The Authority shall elect a chair and a vice chair. The chair shall not serve

more than four (4) consecutive years as chair or vice chair of the Authority.

The vice chair shall not serve more than four (4) consecutive years as chair or

vice chair of the Authority. A member who has served four (4) consecutive

years as chair or vice chair of the Au thority may be elected chair or vice chair

of the Authority after an absence of two (2) years from the positions.

(c) A majority of the Authority members shall constitute a quorum and all actions

taken by the Authority shall be by affirmative vote of a maj ority of the

Authority members present.

(d) The Authority shall post on the Authority's website and shall make available

to the public:

1. All meeting notices and agendas of the Authority. Notices and agendas

shall be posted to the Authority's website at least seventy-two (72) hours

in advance of the Authority's meetings, except in the case of special or

emergency meetings as provided by KRS 61.823;

2. All Authority minutes or other materials that require adoption or

ratification by the Authority. The items listed in this subparagraph shall

be posted within three (3) business days of adoption or ratification of the

Authority;

3. All bylaws, policies, or procedures adopted or ratified by the Authority;

and

4. A listing of the members of the Authority and memb ership on each

committee established by the Authority.

(8) (a) The Kentucky Public Pensions Authority shall appoint or contract for the

services of an executive director and a chief auditor and fix the compensation

and other terms of employment for these p ositions without limitation of the

provisions of KRS Chapter 18A, 45A, and KRS 64.640. The executive

director shall be the chief administrative officer of the Authority, the

Kentucky Retirement Systems board of trustees, and the County Employees

Retirement System board of trustees. The chief auditor shall report directly to

the Kentucky Public Pensions Authority members to perform internal audit

functions as directed by the Authority. The executive director and chief

auditor shall work cooperatively with th e chief executive officers of the

Kentucky Retirement Systems and the County Employees Retirement System.

The Authority shall annually conduct a performance evaluation of the

executive director and chief auditor.

(b) The Kentucky Public Pensions Authority shall authorize the executive

director, or the chief auditor in the case of employees under the direct

supervision of the chief auditor, to appoint the employees deemed necessary

to transact the duties of the Authority for the purposes outlined in subsecti on

(1) of this section. After April 14, 2022, approval by the Authority shall be

required for a petition to the secretary of the Personnel Cabinet for the

creation of any new unclassified position pursuant to KRS 18A.115(1)(e), (g),

(h), and (i).

(c) Effective April 1, 2021, the Kentucky Public Pensions Authority shall assume

responsibility of administering the staff of the Kentucky Retirement Systems

in order to provide the services established by this section.

(d) 1. All employees of the Kentucky Public P ensions Authority, except for

the executive director, the chief auditor, and no more than six (6)

unclassified employees of the Office of Investments employed pursuant

to KRS 18A.115(1)(e), (g), (h), and (i), shall be subject to the state

personnel system established pursuant to KRS 18A.005 to 18A.204 and

shall have their salaries determined by the secretary of the Personnel

Cabinet.

2. The employees exempted from the classified service under this

paragraph shall not be subject to the salary limitations spe cified in KRS

64.640(2) and (3).

3. The Kentucky Public Pensions Authority shall adopt a written salary and

classification plan fixing a range of compensation and written terms of

employment for any of the unclassified employees of the Office of

Investments it authorizes under this paragraph. The Authority shall

authorize the executive director to appoint up to six (6) unclassified

employees of the Office of Investments subject to the compensation

ranges and terms of employment the Authority has established . The

Authority may amend the written salary and classification plan adopted

under this paragraph at any time.

(e) The Authority shall annually review, approve, and submit a report to the

Public Pension Oversight Board detailing the number of employees of the

Authority, the salary paid to each employee, and the change in the salaries of

each individual employed by the Authority over the prior year.

(f) The Authority shall require the executive director and the employees as it

thinks proper to execute bonds for the faithful performance of their duties

notwithstanding the limitations of KRS Chapter 62.

(g) Notwithstanding any other provision of statute to the contrary, including but

not limited to any provision of KRS Chapter 12, the Governor shall have no

authority to change any provision of this section by executive order or action,

including but not limited to reorganizing, replacing, amending, or abolishing

the membership of the Kentucky Public Pensions Authority.

(9) All employees of the Authority shall se rve during its will and pleasure.

Notwithstanding any statute to the contrary, employees shall not be considered

legislative agents under KRS 6.611.

(10) The Attorney General, or an assistant designated by him or her, may attend each

meeting of the Authori ty and may receive the agenda, board minutes, and other

information distributed to Authority members upon request. The Attorney General

may act as legal adviser and attorney for the Authority, and the Authority may

contract for legal services, notwithstand ing the limitations of KRS Chapter 12 or

13B.

(11) (a) 1. All expenses incurred by or on behalf of the Kentucky Public Pensions

Authority shall be paid by the systems administered by the Kentucky

Retirement Systems or the County Employees Retirement System and

shall be prorated, assigned, or allocated to each system as determined by

Kentucky Public Pensions Authority.

2. Until June 30, 2024, any additional initial costs determined by the

Authority to be attributable solely to establishing a separate County

Employees Retirement System board and the Kentucky Public Pensions

Authority as provided by this section and KRS 78.78 2 shall be paid by

the County Employees Retirement System. Until June 30, 2024, any

additional ongoing annual administrative and investment expenses that

occur after the establishment of a separate County Employees

Retirement System board and the Kentucky Public Pensions Authority

that are determined by the Authority to be a direct result of establishing

a separate County Employees Retirement System board and the

Kentucky Public Pensions Authority shall be paid by the County

Employees Retirement System. Beginning on and after July 1, 2024, any

annual administrative and investment expenses shall be prorated,

assigned, or allocated to each system as determined by the Kentucky

Public Pensions Authority as provided by subparagraph 1. of this

paragraph but withou t attribution to the establishment of a separate

County Employees Retirement System board and the Kentucky Public

Pensions Authority.

3. In order to evaluate the results of establishing a separate County

Employees Retirement System board and the Kentucky P ublic Pensions

Authority, on or before November 15, 2022, and on or before November

15 following the close of each successive fiscal year, the Kentucky

Public Pensions Authority shall report to the Public Pension Oversight

Board the annual administrative a nd investment expenses of the

Kentucky Retirement Systems and the County Employees Retirement

System. The report shall include but not be limited to the process or

manner the Authority used to prorate, assign, or allocate to each system

its share of the ex penses, the amount of expenses prorated, assigned, or

allocated to each system itemized by category, and any efforts by the

systems or the Authority to reduce administrative costs and staffing

needs.

(b) Any other statute to the contrary notwithstanding, a uthorization for all

expenditures relating to the administrative operations of the Kentucky Public

Pensions Authority, the Kentucky Retirement Systems, and the County

Employees Retirement System shall be contained in the biennial budget unit

request, branch budget recommendation, and the financial plan adopted by the

General Assembly pursuant to KRS Chapter 48. The Kentucky Public

Pensions Authority shall approve the biennial budget unit request prior to its

submission by the Authority. The request from the Kentucky Public Pensions

Authority shall include any specific administrative expenses requested by the

Kentucky Retirement Systems board of trustees or the County Employees

Retirement System board of trustees pursuant to KRS 61.645(13) or

78.782(13), as a pplicable, that are not otherwise expenses specified by

paragraph (a) of this subsection.

(12) (a) An Authority member shall discharge his or her duties as a member of the

Authority, including his or her duties as a member of a committee of the

Authority:

1. In good faith;

2. On an informed basis; and

3. In a manner he or she honestly believes to be in the best interest of the

County Employees Retirement System and the Kentucky Retirement

Systems, as applicable.

(b) An Authority member discharges his or her duties on an informed basis if,

when he or she makes an inquiry into the business and affairs of the

Authority, system, or systems or into a particular action to be taken or

decision to be made, he or she exercises the care an ordinary prudent person

in a like position would exercise under similar circumstances.

(c) In discharging his or her duties, an Authority member may rely on

information, opinions, reports, or statements, including financial statements

and other financial data, if prepared or presented by:

1. One (1) or more officers or employees of the Authority whom the

Authority member honestly believes to be reliable and competent in the

matters presented;

2. Legal counsel, public accountants, actuaries, or other persons as to

matters the Authority member honestly believes are within the person's

professional or expert competence; or

3. A committee of the Authority of which he or she is not a member if the

Authority member honestly believes the committee merits confidence.

(d) An Authority member sh all not be considered as acting in good faith if he or

she has knowledge concerning the matter in question that makes reliance

otherwise permitted by paragraph (c) of this subsection unwarranted.

(e) Any action taken as a member of the Authority, or any fa ilure to take any

action as an Authority member, shall not be the basis for monetary damages

or injunctive relief unless:

1. The Authority member has breached or failed to perform the duties of

the member's office in compliance with this section; and

2. In the case of an action for monetary damages, the breach or failure to

perform constitutes willful misconduct or wanton or reckless disregard

for human rights, safety, or property.

(f) A person bringing an action for monetary damages under this section shal l

have the burden of proving by clear and convincing evidence the provisions of

paragraph (e)1. and 2. of this subsection, and the burden of proving that the

breach or failure to perform was the legal cause of damages suffered by the

Kentucky Retirement Sy stems or County Employees Retirement System, as

applicable.

(g) In discharging his or her administrative duties under this section, an Authority

member shall strive to administer the systems in an efficient and cost -

effective manner for the taxpayers of th e Commonwealth of Kentucky and

shall take all actions available under the law to contain costs for the trusts,

including costs for participating employers, members, and retirees.