KRS 78.530: Participation by political subdivisions -- Payment -- Closing of participation

in local government systems -- Hazardous duty coverage option.

(1) (a) Each county and school board, as defined in KRS 78.510, will participate in

the system by appropriate order authorizing such participation which has been

entered and duly recorded in the records of the governing body of the county

or school board. In cases where general purpose county government does not

participate, but the sheriff and hi s or her employees or the county clerk and

his or her employees do, the sheriff or the clerk shall retain the order in his or

her office. The authority to issue and properly record such order of

participation being hereby granted, permits such county to pa rticipate in the

system. The effective date of such participation shall be fixed in the order.

(b) Notwithstanding any statute to the contrary, after April 9, 2002, the systems

shall deny the request for participation of any agency which does not have an

irrevocable contract with the state Personnel Cabinet for health insurance

coverage under KRS 18A.225 to 18A.229 for its active employees, except

that:

1. County governments entering the system between April 9, 2002, and

July 1, 2003, under this section shall be excluded from this requirement;

2. Agencies entering the system on or after April 9, 2002, which were

established by a merger or an interlocal agreement to provide public

services shall be excluded from this requirement if any agencies entering

into the merger or interlocal agreement had an initial participation date

with the system prior to April 9, 2002; and

3. Any consolidated emergency services district.

(2) Once a county or school board participates, it shall thereafter continue to

participate, except as provided in KRS 78.535.

(3) (a) Concurrent with the adoption of the appropriate resolution to participate in the

system, a county may elect the alternate participation plan which will require

the county to purchase on behalf of each employee elect ing coverage, at the

time the county elected to participate in the system as provided under KRS

78.540(1)(b), current service credit for employment in regular full -time

positions between July 1, 1958, and the participation date of the county. Cities

which participate in the system pursuant to subsection (6) of this section, KRS

79.080, 90.400, 90.410, 95.520, 95.621, 95.761, 95.768, 95.852, or 96.180

shall be required to purchase on behalf of each employee electing coverage

only as much service credit as th e employee has accumulated in the city -

administered plan, up to the participation date of the city. Accumulated

service shall include service for which an employee received a refund

pursuant to KRS 95.620 or 95.866, if such refund has been repaid. If the

employee has not yet repaid the refund, he or she may make payment to the

system by any method acceptable to the system, and the requirement of five

(5) years of continuous reemployment prior to repayment of refunds shall not

apply. Upon the employee's repa yment, the city shall purchase the associated

service credit for the employee. Cost of such service credit over and above

that which would be funded within the existing employer contribution rate

shall be determined by the board's consulting actuary. The e xpense of such

actuarial service shall be paid by the county.

(b) The county shall establish a payment schedule subject to approval by the

board for payment of the cost of such service over and above that which

would be funded within the existing employer contribution rate. The

maximum period allowed in a payment schedul e shall be thirty (30) years,

with interest at the rate actuarially assumed by the board. A shorter period is

desirable and the board may approve any payment schedule provided it is not

longer than a thirty (30) year period, except that cities which partic ipate in the

system pursuant to subsection (6) of this section, KRS 79.080, 90.400,

90.410, 95.520, 95.621, 95.761, 95.768, 95.852, or 96.180 may, at their

option, extend the payment schedule to a maximum of thirty (30) years, may

choose to make level paym ents at the interest rate actuarially assumed by the

board over the life of the payment schedule chosen, and may retain employer

contributions and the earnings thereon attributable to employees electing

coverage.

(c) A city entering the system under the al ternate participation plan, may, by

ordinance, levy a special property tax to pay for current service credit

purchased for the period between July 1, 1958, and the participation date of

the city. The special tax shall be to pay, within a period of no more than

fifteen (15) years, for the cost of such service credit over that which would be

funded within the existing employer contribution rate, as determined by the

board's consulting actuary. The reason for levying the special tax and the

disposition of the proceeds shall be part of the ordinance levying the tax. The

special tax shall be rescinded when the unfunded prior service liability has

been amortized, and shall not be subject to the provisions of KRS 132.017 or

132.027. In addition, the city may mainta in any tax, the proceeds of which

had been devoted to funding pension obligations under the locally

administered plan prior to participation in the system, for the purpose of

funding current service costs incurred after the date of participation. The city

may increase the tax to pay current service costs which exceed the local

pension system costs to which the tax had been devoted, but the city shall not

collect from the tax more revenues than are necessary to pay current service

costs incurred after the da te of participation. The city may continue the tax so

long as it participates in the system, and the tax shall not be subject to the

provisions of KRS 132.017 or 132.027. The city shall not collect either tax

authorized by this paragraph if its participati on has been terminated pursuant

to KRS 78.535.

(d) The county may at a later date purchase current service credit from July 1,

1958, to the participation date of the county by alternate participation plan for

those employees who rejected membership in the system at the time the

county first participated. In addition, the employer shall pay the employer

contributions on the creditable compensation of the employees who later elect

membership from the participation date of the county to the date the member

elects participation. The employee shall pay the employee contributions on his

or her creditable compensation from the participation date of the county to the

date he or she elects membership plus interest at the current actuarial rate

compounded annually on the employee and employer contributions. Cost of

the service credit over and above that which would be funded within the

existing employer contribution rate shall be determined by the board's

consulting actuary. The expense of the actuarial service shall b e paid by the

county. The county shall pay the cost of the service by lump sum or by adding

it to the existing payment schedule established under paragraph (b) of this

subsection.

(e) A county which did not participate by alternate participation may, until July 1,

1991, purchase current service credit for those employees who rejected

membership in the system at the time the county first participated. The

employer shall pay the employer contributions on the creditable compensation

of the employees who later elect membership from the participation date of

the county to the date the member elects participation. The employee shall

pay the employee contributions on his or her creditable compensation from

the participation date of the county to the date he or she elects membership

plus interest at the current actuarial rate compounded annually on the

employee and employer contributions. The county shall pay the cost of the

service credit by lump sum or by establishing a payment schedule under

paragraph (b) of this subsection.

(f) A county which participated in the system but did not elect the alternate

participation plan may at a later date elect the alternate participation plan. In

this case, the county shall purchase on behalf of each employee participating

in the system current service credit for employment in regular full -time

positions between July 1, 1958, or a later date selected by the county

government, and the participation date of the county. The county shall also

purchase, for employees who decide to part icipate when the county elects the

alternate participation plan, current service credit for employment in regular

full-time positions between July 1, 1958, or the later date selected by the

county government, and the participation date of the county. In ad dition, the

county shall pay the employer contributions on the creditable compensation of

the employees who later elect membership from the participation date of the

county to the date the member elects participation. The employee shall pay

the employee co ntributions on his or her creditable compensation from the

participation date of the county to the date he or she elects membership plus

interest at the current actuarial rate compounded annually on the employee

and employer contributions. Cost of the serv ice credit over that which would

be funded within the existing employer contribution rate shall be determined

by the board's consulting actuary. The expense of the actuarial service shall be

paid by the county. The county shall pay the cost of the service by lump sum

or by a payment schedule established under paragraph (b) of this subsection.

(g) Notwithstanding any other provision of the Kentucky Revised Statutes to the

contrary, this subsection shall not apply to members who begin participating

in the sys tem on or after January 1, 2014, and no county that elects to

participate in the system on or after January 1, 2014, shall be eligible to

participate under the alternate participation plan.

(4) Every school board not participating on June 21, 1974, shall e nact a resolution of

participation no later than July 1, 1976.

(5) The order of the governing body of a county, as provided for in subsection (1) of

this section, may exclude from participation in the system hospitals and any other

semi-independent agency. Each such excluded agency shall be identified in the

order authorizing participation and such excluded agency may participate in the

system as a separate agency.

(6) (a) After August 1, 1988, except as permitted by KRS 65.156, no local

government retireme nt system shall be created pursuant to KRS 70.580 to

70.598 and any local government retirement systems created pursuant to KRS

79.080, 90.400, 90.410, 95.768, and KRS Chapter 96 shall be closed to new

members. New employees who would have been granted mem bership in such

retirement systems shall instead be granted membership in the County

Employees Retirement System. Employees who would have been granted

membership in retirement systems created pursuant to KRS 95.768, or any

other policemen or firefighters who would have been granted membership in

retirement systems created pursuant to KRS 79.080, 90.400, or 90.410, or any

such policemen or firefighter members employed on or prior to August 1,

1988, who transfer to the County Employees Retirement System, sha ll be

certified by their employers as working in hazardous positions. Each city

participating in the County Employees Retirement System pursuant to this

subsection shall execute the appropriate order authorizing such participation,

shall select the alterna te participation plan as described in subsection (3) of

this section, and shall pay for the actuarial services necessary to determine the

additional costs of alternate participation. Cities which closed their local

pension systems to new members and partic ipated in the system prior to July

15, 1988, whose employees at the time of transition were given the option to

join the system shall not be required to offer said employees a second option

to join the system.

(b) Notwithstanding any statute to the contrar y, after April 9, 2002, the system

shall deny the request for participation of any agency which does not have an

irrevocable contract with the state Personnel Cabinet for health insurance

coverage under KRS 18A.225 to 18A.229 for its active employees, except that

agencies entering the system on or after April 9, 2002, which were established

by a merger or an interlocal agreement to provide public services shall be

excluded from this requirement if all agencies entering into the merger or

interlocal agreement had an initial participation date with the system prior to

April 9, 2002.

(7) Any city which closed a police and firefighter pension plan to new members

between January 1, 1988, and July 15, 1988, and participated in the system under

the alternate partic ipation plan shall, if its police and firefighters were not covered

by Social Security, or any city which operates a pension under KRS 90.400 or

90.410, shall be required to certify that its police and firefighters are working in

hazardous positions, and s hall offer its police and firefighters in service at the time

of entry a second option to participate under hazardous duty coverage if they were

not offered hazardous duty coverage at the time of their first option. The provisions

of subsection (3)(b) of t his section notwithstanding, a city affected by this

subsection may, at its option, extend its payment schedule to the County Employees

Retirement System for alternate participation to thirty (30) years at the rate

actuarially assumed by the board.