KRS 67A.580: Accounts and records -- Reserve accounts.

(1) An adequate system of accounts and records shall be established and maintained for

the fund that will reflect fully the requirements of the provisions of KRS 67A.360 to

67A.690. This system shall be integrated, to the extent possible with the accounts,

records, and procedures of the government to the end that the same shall operate

most effectively and at minimum expense, and that duplication of records and

accounts may be avoided.

(2) All assets of the fund shall be credited according to the purposes for w hich they are

held in the following designated reserve accounts:

(a) Members' Contribution Reserve. The amounts contributed by the members,

including those picked up pursuant to KRS 67A.510(2), shall be credited to

this reserve, together with regular inter est thereon as herein provided. An

individual account shall be maintained for each member, to which shall be

credited the amounts of his contributions or amounts picked up by the urban -

county government. Upon the granting of a service retirement annuity,

disability annuity, or survivor's annuity or benefit, the accumulated

contributions to the credit of the member concerned shall be transferred from

this reserve to the retirement reserve. Refunds and death payments

representing member's contributions shall be charged to this reserve.

(b) Employer's Contribution Reserve. The amounts contributed by the

government under the provisions hereof, for service retirement annuity,

disability retirement annuity, and benefits to survivors covering membership

service and prior service, shall be credited to this reserve. Upon the granting

of a service retirement annuity, disability retirement annuity, or survivor's

benefit, an amount representing the excess of the actuarial value of the

annuity, or benefit over the accumulated contributions of the member, shall be

transferred from this reserve to the retirement reserve.

(c) Retirement Reserve. Upon the granting of a service retirement annuity,

disability retirement annuity, or survivor's benefit, the accumulated

contributions of the member, including those picked up pursuant to KRS

67A.510(2), and an amount representing the excess of the actuarial value of

the annuity or benefit over such accumulated contributions, shall be

transferred to this reserve from the member's contr ibution reserve and

employer's contribution reserve, respectively. All income from investments,

including gains on investment transactions, shall be credited to this reserve.

All losses on investments shall be charged to this reserve. All payments on

account of any annuity made by the fund shall be charged to this reserve. Any

deficiency in this reserve shall be removed by an increase in the amount of

government's contributions for future membership service.